The Least Boring Investing Principles You’ve Ever Heard…
Principle 1: Invest Without Emotion.
Invest based on an objective plan NOT a subjective questionnaire. Most questionnaires boil down to how you would feel if the markets were down. This is emotion-based investing which is like grocery shopping when you’re hungry—you’ll probably end up with a cart full of bad decisions.
Principle 2: Purpose → Plan → Portfolio.
I see many people leave out the first two parts of this formula. The problem is, failing to plan before you invest is like driving without a GPS in a new city. You will drive in circles, burning gas, and hope you end up somewhere nice.
Principle 3: Stay the Course.
Investing success is more about time in the market than timing the market. So, we do not chase performance or fads. We do not react to the latest market catastrophe since these things invariably introduce new unnecessary risks to your financial plan. Long-term investing is like planting a tree. The best time to start was 20 years ago, but the second-best time is today. However, many people keep uprooting the tree to see if it’s growing (e.g. chasing an investing fad).
Principle 4: We Expect Volatility.
This means the markets will go up some days and go down other days. Expecting the market to never be volatile is like expecting your toddler to never throw a tantrum—wishful thinking at best. Being prepared for it can help keep your sanity intact.
Principle 5: We Do Not Time the Market.
This means we do not try to predict whether the markets will go up in a given time-frame or down. Timing the market is like trying to catch a fly with chopsticks—you might get lucky once, but good luck making it a habit.
Principle 6: We Prepare, We Don’t Predict.
We don’t predict the market direction (up or down) any more than we predict who’s going to win the next season of The Bachelor—but we do know it’ll be dramatic. That’s why we’re prepared with a solid financial plan to stay focused on what we can control.
Principle 7: We Follow Our Advice.
We believe in our advice, and we stand behind our recommendations to our clients, to the point of following our advice and recommendations ourselves! We do not give advice that we would not feel comfortable following or providing to our loved ones. Not following our own advice would be like a chef who refused to eat their own cooking.
We hope that through our collaborative planning and principles-based investing philosophy, you can feel encouraged to tune out the media and enjoy life a little more. Let us focus on the details, volatility, and planning!