The Three Most Important Investment Decisions
Many investors believe active stock picking, choosing the hottest fund, or timing the market is the best path to achieve wealth. Yet many well documented studies indicate this path produces poor results that are caused by behavioral errors. Fear or greed induced decisions often cause wealth destructive “buy-high, sell-low” activity. The historical evidence is very clear: a strategic, long-term approach to asset selection using index funds has provided sustained outperformance versus active and tactical approaches. The cost advantage of index investing greatly increases your odds of better compound investment returns. Time in the market determines long-term success.
How else can you strengthen results, reduce investment risks, and build even greater security?
Prudent investment management is designed to address both investment returns and risks. Noble prize winning research shows that asset allocation is the most important decision you can make to control risk. An intelligent, diversified asset mix balances the growth you need, with adequate income and stability appropriate for your time horizon, your stage in life, and your goals. Periodic portfolio rebalancing maintains risk control and instills a “buy-low, sell-high” discipline. This proven method is more effective than trying to time market highs and lows when emotions intensify, and helps avoid behavioral mistakes that can destroy long-term value.
The Three Most Important Investment Decisions:
Asset Selection
Asset Allocation
Disciplined Rebalancing
What’s Your Whole Plan?
Investing right is important, but its only part of the solution. What’s a safe path between investment, saving, spending, and achieving your retirement goals? What you don’t know can expose you to unnecessary risk, loss of capital, and less security. As you near retirement, it’s vital to combine sound investment discipline with thorough and thoughtful financial planning. It’s not just what you make, but what you can take that matters. Peace of mind comes from knowing you are prepared to protect your hard earned wealth.
Jerry Matecun – Founder, President
Expert guidance to plan your future, preserve your lifestyle, and retire with confidence. For a confidential consult, contact me at jerry@compoundvalue.com.
PLEASE NOTE: Nothing herein constitutes investment, legal, or tax advice. For details please see Disclosure.
