Financial advisors and wealth managers tend to guide their clients with a set of tried-and-true principles: simple, yet effective wisdom that has created wealth despite market crashes, international crises, and dramatic political shifts.
For sophisticated investors, these principles sound like Investing 101. If you’ve ever sat down with an financial advisor, here’s what they probably told you:
Get in the Game
A 2023 study by Charles Schwab found that investors with bad timing beat those investors who stayed in cash through every single rolling 20-year period since 1926. The study found that a hypothetical investor with even the worst market timing crushed the returns of one who stayed in cash between 2003 and 2022.
Sitting on the sidelines waiting for those ideal conditions to fall into place is the riskiest strategy of all.
Clarify Your Goals
When a financial advisor takes on a new client, they don’t immediately start discussing allocation strategies and expected returns. They start by asking about the client’s long-term goals. Maybe the person wants to retire early. Or maybe they have three kids to put through college. Depending on those goals, the investment strategy would be completely different.
And even beyond strategic objectives, there’s the question of purpose. The best firms aren’t just out there to make money; they stand for something bigger—whether that’s providing great customer service, bringing more joy into people’s lives, or caring for the environment.
Invest for the Long Term
Fidelity Investments found a few years ago when it studied its best-performing client accounts ; many of its best performers had been dead for years. As a result, they weren’t tinkering with their holdings every time the market got scary.
The best investors are able to tune out panicky emotions and keep their focus on long-term value.
Take a Portfolio Approach
Good investors diversify their portfolios across sectors and geographical areas in order to insulate themselves from individual company risks and ensure stability.
Don’t Time the Market
Even expert investors can’t consistently time market highs and lows. That’s why dollar-cost averaging—investing steadily over time through market ups and downs—wins.
As with dollar-cost averaging, you should invest consistently into projects that will drive future growth both during good times and bad.
Positioning
Success doesn’t come from reacting to the present—it’s founded on positioning for the future.
MRA Advisory Group offers complimentary 1st meetings with our advisors. Schedule a meeting today and we’ll help craft a financial plan that fits your goals and lifestyle.
Advisory Services are offered through MRA Advisory Group, a Registered Investment Adviser. It is general in nature that the statements herein are not a complete statement of all information necessary for making an investment decision and is not a recommendation or a solicitation to buy or sell any security. The investments and strategies mentioned may not be suitable for all investors. Past performance is no guarantee of future results. Nothing herein, nor any attachment, shall be considered to constitute (i) an offer to sell, nor a solicitation of an offer to purchase, any security, or (ii) tax or legal advice.