As a follow-up to last week’s post on risk and return, today we present a brief, but informative video on investing fundamentals. This lesson reminds us where to focus our efforts for maximum impact on long-term portfolio performance.
The temptation when starting out as an investor is to find that “One Hot Stock”, “The Next Big IPO”, or to convince ourselves that we can “Predict The Future” better than the other billion (or so) market participants competing for the same return. The truth is; Investing is one of those activities which as humans we inevitably overcomplicate. However, when we keep it simple and focus on the things we can control like discipline, diversification and watching our costs, that’s when we separate ourselves from the under-performance of an average investor.
It makes sense that we should only take on those risks which compensate us for taking them, like the risk of investing in smaller companies or buying Value (out of favor) stocks. These concepts are critical to a solid investing foundation. However, “noise” from Wall Street, the financial press and other sources constantly compete for our attention. It takes incredible discipline to fight emotions, tune out that noise and invest for the long-term with success. To better your understanding of how to capitalize on what the markets offer, please see the following video:
Feel free to contact Us at (610-695-8070) any time if you’re unsure about your asset allocation or long-term financial objectives. We have plenty of information about these and other topics in the Free Resources section of our website. Also check out our new free white paper The Anesthesiologists Guide to Investment Risk and Reward. You don’t have to be a medical specialist to take advantage of the recommendations and insights we share.