Investing Principles
PAY ATTENTION TO POLICY, NOT POLITICS
PAY ATTENTION TO POLICY, NOT POLITICS
Political drama doesn’t determine:
-
- financial plan
- portfolio direction
- business climate
Policy can determine:
- Interest rates
- Taxes
- Rules and regulations
PAY ATTENTION TO A MUTUAL FUND’S CULTURE AND INVESTMENT TEAM
- Continuity is important in a firm’s:
- Leadership
- Investment philosophy
- Goals
- Discipline
PUT A PORTION OF YOUR PORTFOLIO WITH INDEPENDENT THINKERS WHO CAN ACT ON THEIR ANALYSIS
LOOK FOR FIRMS WHERE MANAGERS INVEST CONSIDERABLE SUMS ALONGSIDE SHAREHOLDERS
- How much money portfolio managers have invested in their own funds is a key criteria used to judge funds
- Significant “skin in the game” is seen as important indicator of management commitment & responsibility
- SEC requires disclosure of managers’ investments in funds they manage
Information available:
- – Mutual fund’s Statement of Additional Information in prospectus
- – SEC’s electronic data gathering, analysis, and retrieval database (EDGAR)
PAY ATTENTION TO THE CULTURE OF THE PEOPLE AND FIRMS YOU INVEST WITH
FIRMS YOU INVEST WITH
- Certified Financial Planner (CFP)
- Chartered Financial Analyst (CFA)
- Certified Investment Management Associate (CIMA)
Does the advisor:
- Understand & agree with your objectives?
- Pay attention to your comfort levels?
- Have a realistic & workable plan to achieve your goals?
- Have the same values & priorities?
- Emphasize long-term outcomes & investments?
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