world is ever changing and complex, but the principles of investing
do not change. A long-term approach, asset allocation and diversification
remain the cornerstones of building financial independence.
cost of letting investor emotions impulsively drive investment
decisions in bull or bear markets is higher than one may realize.
There is a significant gap in returns between disciplined
and emotionally driven portfolios. Historically speaking,
investors tend to sell rather than buy stocks at the point
of maximum financial opportunity. Conversely, investors are
also inclined to buy instead of sell investments at the point
of maximum financial risk. This explains the significant gap
in returns between disciplined and emotionally driven portfolios.
believe in the power of strategic investment planning because
it gives the investor the edge against all other forces. Investment
planning brings perspective, and thus becomes a potent weapon
in removing investor emotion from the equation.
you know where you are going, a few bumps along the way should
not deter you from your destination. In investing, the real power
lies in the strength of strategic planning and taking a long
investor is different with different financial objectives
and needs. For all the differences though, every investor
Ė experienced, or novice should approach investing with the
following guidelines in mind.
►††† Develop a plan that will map the way to your goals.
►††† Understand market cycles. Realize that markets go up and down. As such, investors should
not be surprised, become overconfident or panic in light of
good or bad news.
►††† Use reason not emotion when investing. Investors should not buy investments on
a whim or sell upon a sudden downturn.
►††† Keep in mind the downs are temporary, and the ups are permanent.
When the markets go south, donít bail out. Consider making
new investments, but do your homework first.
► Make market fluctuations work for you. Dollar cost averaging removes the emotional
factor from investment decisions, enabling investors to buy
more of an investment when prices are low and less when prices
information contained in this commentary is designed to provide
you with general information only, and is not intended to
be comprehensive advice applicable to the circumstances of
any individual. We strongly urge you to seek professional
assistance before acting upon information included herein.