(2 minutes to read) In investing, one lesson matters more than almost any other: you can’t buy past returns—you can only earn future returns. Yet many people do exactly the opposite. They chase what did well recently, believing strong performance will continue. History shows this mistake can be extremely expensive.
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{4 minutes to read} Investing takes time, patience, and an understanding of how markets move. Diversifying your investments helps lower financial stress, a common concern that makes investing a steady process rather than a gamble. Investing isn’t about gambling — it’s about steadily growing your money over time so you can have a better life. Diversification — spreading investments across multiple asset classes — is key to managing risk. However, when some investments perform exceptionally well, focusing only on those and ignoring diversification can be tempting. Ignoring diversification is a mistake. Staying diversified is crucial because asset class returns are cyclical, and today’s underperformers may become tomorrow’s leaders. Diversification is key to maintaining balance, since no one can predict which asset classes will perform best.
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It’s summer. There’s always a piece of headline news trying to get you out of the market. As we keep reminding our clients, what keeps us in the market are two things:
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To be a successful investor, you have to have a plan you can adhere to in all market cycles. No matter how good your investment ideas are, they’re worthless if you can’t stick with them. So, think back a few years and imagine this:
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Many pundits tell people that timing markets is an effective way to manage market cycles. Empirical and theoretical data show otherwise. What we’ve been sending to clients and people, which seems to resonate well and is supported by financial science, are three things that we think are important when investing:
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