MAKE SURE YOU ARE TRULY DIVERSIFIED Not truly diversified until you own something that makes you uncomfortable Uncomfortable usually means: unpopular, underperforming and cheap “Uncomfortable” assets today include: Value stocks Emerging markets stocks and bonds
EXTEND YOUR INVESTMENT TIME HORIZON PROBABILITY OF A LOSS FOR THE S&P 500 (Rolling Price Returns, Jan 1930 – Jan 2021) 1 day investment = 46% chance of loss 1 year investment = 31% chance of loss 5 year investment = 19% chance of loss 10 year investment = 10% chance of loss Source: Richard […]
MAKE SURE YOU ARE INVESTED IN SOME BENEFICIARIES OF AN ACCELERATING ECONOMY Laggards of last decade coming to life Value stocks should outperform growth Small-caps should outpace large companies International stocks, particularly in emerging markets should lead domestic Watch the related WEALTHTRACK episode.
READ AGAINST THE GODS: THE REMARKABLE STORY OF RISK Against the Gods: The Remarkable Story of Risk Watch the related WEALTHTRACK episode.
AVOID MARKET TIMING Historical evidence shows market timing leads to significantly lower returns than buy and hold strategy Market timing also leads to increased volatility “…the volatility of investor returns is higher than the corresponding volatility in nearly all specifications.” “Specifications’’ considered: individual stocks, stock mutual funds and stock indexes in U.S. and major international […]
TAKE SOME RISK OFF THE TABLE Market Conditions Flashing Caution Winning By Losing Less: A Tried And True Approach Trim Some Of Your Most Elevated Holdings Watch the related WEALTHTRACK episode.