Patience is Key

Even if you lose money in the stock market, there is still the opportunity to benefit. There have been numerous examples of investors who put money into the stock market during periods when the market was flat, and they still came out ahead.

A good course of action is to put money into your long-term investments on a regular basis. Let’s look at one family that had setup their Roth IRAs before the 2007-8 market losses. When they lost money in their accounts, he decided to stop putting money in because he wasn’t sure it was still a good idea. She, on the other hand, kept contributing. The difference in their accounts 5 years later was shocking. You see, even though she didn’t like losing money in 2007-8, she kept investing each month and she bought more shares when the market was low. He, on the other hand, waited for the share prices to go back up before contributing again and, thus, bought his shares at a higher price than she did. Buy low and sell high is still the best idea. So, yes, even though we feel the losses twice as much as we feel gains, consistent long-term investing is a good approach for establishing the kind of retirement you would like.
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The Portfolio Managment Approach Matters

When investment experts Peter Lynch and Bill Gross left the funds they managed, the funds seemed to change course.

Unfortunately, at any company or investment, when the bulk of the return is depending primarily on just one person, a lot can go wrong when that person is no longer associated with the entity.

A multiple-manager system can overcome this hurdle when it’s done right. This approach helps combine independence and teamwork, and works better to pursue investment opportunities. A team of managers that share research and resources, but are empowered to act on their own investment decisions, is a method we like to see! It’s like comparing a solid baseball team of 9 players with diverse skills to a team of one superstar player. No matter how great the one superstar is, he can’t cover the whole field as well as a solid team.

Here are some of the advantages of a well-functioning multiple-manager system:

·         Broad Diversification - Each of the fund managers invests in his or her highest conviction ideas. Because of this, the portfolios within the fund are able to contain a highly diverse group of securities.

·         Rigorous Risk Management - Superior long-term performance with less market fluctuations is the result that we’re looking for from the portfolio manager team. This is partially related to the higher level of diversity typically seen with this approach.  

·         Consistency of Objectives - The fund's principal investment group review investments to ensure consistency with fund objectives and overall guidelines.

When all of this is combined, it makes for a fund that is diverse, yet works together like a well-oiled machine.
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Proven Advice to be a Successful Investor

When you are preparing to invest, one of the very first - and the most important - decisions that must be made is determining who to trust with your money. Once you have done so, you will be able to move forward much more easily with all of the other essential investment-related decisions.

That sounds simple enough but getting it done right is a different story. One important step that is easy to miss is evaluating the fundamentals.
When you evaluate investment ideas, strategies, and approaches for inclusion in your investment plan be purposeful.
Trust but verify that the fundamentals are actually put into practice for any investment you are considering. Some of the core values we look for include:

• A defined, high-quality research process that is actually used, and favors long-term investors like you.
• An even-handed or reasonable balance between cost and return. Be willing to pay a fair price for the type and level of returns that you expect or desire. Don’t be fooled by low cost investments with low returns or high return investments with high fees.
• Adjustments to ensure your cost and return expectations match the right amount of risk for you, your family, and your goals.
• A total commitment to honesty and integrity.

While these core values may not include in-depth mathematical formulas for choosing the proper investments based on numerical factors, they are actually more important in many ways. Trust and integrity are something that cannot be bought – it has to be earned.

So, before investing your hard-earned money, be sure to check out the
core values, management team, long-term history, results, fees and overall track record of where you plan to place your investment funds. Chances are that you will be much better able to sleep at night, knowing that your money is with a company that you trust.
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Dare to Diversify So You Can Prosper

Throughout the years, successful investing has actually had less to do with the picking of individual stocks and more to do with the choosing of a well-diversified portfolio that consists of a nice mix of different types of assets. We've all likely heard the famous phrase, "Don't put all of your eggs in one basket." This is very good advice when it comes to investing.

There are numerous ways you can diversify your investment mix, depending on your tolerance to risk, your investment time horizon, and your overall financial goals.While the idea of putting together a well diversified portfolio of investments may seem to be a bit daunting, the good news is that it does not have to be difficult.In fact, by starting out with a plan, you will be able to get a good idea of the types of assets to include in your portfolio initially - as well as how and when you may need to adjust your diversification strategy over time.An actively managed portfolio can help to alleviate much of the work that must be done by an individual investor.
By allowing specialists to take over the task of replacing various investments at the appropriate times, you can see a difference in their overall portfolio return while still having time to play with your children or take those important vacations.
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Not Too Big For The Small Table

It is often said a small business is like a family. Likewise the break-room table is much akin to the family dining room. The typical family, stretching their collective imagination to its limit, could never imagine their favorite rock star, movie star, athlete or politician stopping by for dinner and a few laughs. Much the same, the typical small financial services company would not expect a portfolio manager from the largest mutual fund in the world to spend an hour and a half at the break-room table discussing investments with an audience of nine people.  Yet today we had the pleasure of having a portfolio manager, accompanied by an investment analyst, and a wholesaler, do just that. It’s probably reasonable to assume a large and lavish conference room filled with plush chairs, power suits and power ties is a more typical environment for such an impressive trio. Nevertheless, the enthusiasm for the discussion in our everyday break room was top shelf and they seemed right at home in our familial digs. A visit like this is solid evidence in the confirmation of two things: we are doing things the right way and so are they.
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A Pie For All Seasons

I’ve never met an American who doesn’t like at least one kind of pie. So many delicious crusts, cream fillings and meringues to choose from; but for me a pie is all about the fruit filling. Apples, peaches, cherries, blueberries, blackberries and any other delicious fruit that can be stuffed into a pie all have their seasons and climates in which they thrive and produce the best results for pie. Unfortunately, I have not discovered a year round, all season, and all climate fruit that makes a delicious pie. I’ve often thought about creating a “Frankenpie” with a different fruit in each slice but I imagine the results wouldn’t match the dream. I’m sure they don’t call it “Frankenpie” but the primary mutual fund company we work with applies this approach to portfolio management. During a recent meeting with the portfolio manager, he described how the company slices up management of their funds between 3 to 12 different managers per fund. These managers are responsible for their own slices and manage them based on their own style, experiences, convictions, strengths and weaknesses. The result is portfolios that are as naturally diversified as any group of individuals would be and structured to be complementary so that one manager’s weakness in a given investment climate is countered to some extent by another manager’s strength in that same climate. Over time, this approach provides a fund the ability to generate more stable returns in an ever-changing market place. This portfolio management theory is in essence management for all seasons.
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Plan Your Attack!

Plan your attack then attack your plan! The key word in this age-old saying is plan. Today is a great day to set some goals, get a plan going and then get going on the plan. The average investor has underperformed the S&P 500 by almost 4% for the last 20 years due to getting in and out of the market at the wrong times*. We feel that this is largely because of a lack of measurable goals. There are many ways to estimate what your required spending will be in retirement planning. Please ask us if you need help with this. These numbers will help you set a savings goal for today. Just remember, if you know where you are going it’s a lot easier to get there. We can help you set your goals, plan your attack and decide if you have financial independence for today and tomorrow. * DALBAR study Quantitative Analysis of Investor Behavior (QAIB) 3/2013
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