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The Seven Key Principles Powerful Investment Strategies - The 7 Key Principles Will Increase Your Likelihood for Success!
"The overall theme found in behavioral finance is that the circuitry in our brains is 'wired' in such a way as to cause us to make costly investment mistakes...it's normal for us to get caught up in emotions, second-guess our allocation to various asset classes, and make inappropriate changes to our portfolios that boost risk and reduce returns." 2. 2. Deliver great capabilities to all investment management decisions. Good intentions - your own or those of an investment professional are not enough to maximize your chances of success. Look what happened when people loaded up on seemingly unstoppable technology stocks - they came crashing down in the early 2000s leaving many in financial disaster. Investors do not knowingly follow advice that will put their portfolios in jeopardy. Unfortunately, this is often the result. To prevent this, good intentions must be supplemented with different types of world-class capabilities and resources found only among the best investment institutions. 3. Align your investment strategy with your long-term objectives and tolerances for risk. Rational investors must accurately assess where they are today and where they want to go in order to determine the best path to achieve those goals. That means identifying crucial but often overlooked issues such as:
4. Emphasize the importance of asset allocation. The decision about which specific stocks, bonds, or other investments you select for your portfolio has little bearing on your returns. A much more important factor is how the dollars you invest are divided up among various types of broad asset categories. Investor Resources understands and carefully implements this often-missed piece of the investment puzzle. 5. Implement a plan using the appropriate investment vehicles. Investors face a wide variety of choices when it comes to selecting the specific investment vehicles for their portfolios. However we understand that investing is not one-size-fits-all. To the contrary, our process carefully builds individual portfolios specific to your needs and situation. By creating a plan with flexibility, your portfolio will address and better meet your specific circumstances. 6. Monitor and adjust your portfolio on an ongoing basis. Investors often make the mistake of constructing their portfolios once but failing to revisit them regularly to make necessary adjustments. Yet those who get the most out their investments use a comprehensive approach to monitoring and adjusting that delivers tremendous value and helps to ensure success. This rebalancing can be done strategically or tactically based on the investors' goals. It's also important for a firm to monitor investment managers in order to hold them accountable. Questions should include:
7. Assess your progress regularly. It all comes down to this; you need to be able to follow your progress. When your monthly investment account statement arrives each month, do you read it? More important, do you understand what you read? Unfortunately, many people get frustrated trying to interpret account statements. As a result, most don't understand what investments they're holding and certainly can't gauge their performance. Remember, frustration and confusion are strong emotions that can lead to the wrong move at the wrong time. But it doesn't have to be that way. Investor Resources' process will reveal the techniques that top institutional investors use to assess how they're progressing toward their goals, and answer the question that's on every investor's mind: "How am I doing?" Sign-up: Free Newsletter Register for our workshop to learn more about the differences between strategic and tactical investing and how you can take advantage of the market. 2. The Art of Investing and Portfolio Management; 2nd edition; Cordes/O'Toole/Steiny; McGraw Hill, 2008; pg. 16. |
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