Successful Investment Principles and Strategies

Being a financial advisor is a big responsibility. It entails creating the best financial strategies to ensure my clients’ and their families’ financial well-being. And, of course, it’s a responsibility that I take very seriously. Before becoming the independent financial advisor I am today, I acquired the knowledge and experience I knew I would need to ensure my clients’ financial success. I received a degree in finance, worked as a financial advisor at Merrill Lynch, worked at a private equity firm, and at a Fortune 100 financial services company. During my 15 years in the industry, I have come to believe that successful investors have one thing in common: they adhere to the following principles and strategies.
Maintain optimism: Although it’s important to develop strategies that mitigate risk, it’s equally important to be optimistic about the future. Of course, we will encounter times of economic instability, but a successful investor has faith in the future of the global economy. And this isn’t a blind faith; it’s a faith that comes from understanding that globalization is enhancing economic growth and that even short-term challenges pave the way for future success.
Demonstrate patience: When faced with difficult economic times, it’s tempting for an investor to react rashly and make changes to his or her core investment approach. However, instead of making a rash decision, such as selling at the bottom, a successful investor demonstrates patience and stays the course.
Stay committed: Once you’ve worked carefully to adopt a core investment approach, it’s important to stay committed to it. This is important because, as we all know, the market can be volatile. Investors who react rashly to it are not as successful as those who maintain the optimism and patience to stay committed to their original plan.
Diversify by asset type: Diversification reduces risk and maximizes return by dividing investments among several assets that would react differently to the same event. Different asset classes include fixed income (e.g., bonds and cash equivalents), equities (e.g., domestic and international stocks), and alternatives (e.g., real estate and natural resources).
Diversify by security:  Once an investor has diversified by asset type, it’s important that he or she diversifies within that asset type. For example, successful investors will not only invest in growth stocks or value stocks; they will invest in both. With fixed income, it’s important to buy bonds with different interest rates and maturity dates.
Rebalance: Because investments in a portfolio perform according to the market, over time, a portfolio’s asset allocation may deviate from the original plan. It might veer into territory that is either riskier or more conservative than the original plan. Rebalancing brings it back to the originally planned asset allocation.
Developing principles and strategies to ensure my clients’ financial success is my highest priority. If you are interested in discussing your financial future, please don’t hesitate to give me a call.