February 16, 2024

We understand that the journey to financial independence is akin to sailing through ever-changing seas. Most of our clients have one crucial thing in common: a need for reliable, sensible strategies to help them save for retirement and live comfortably through their golden years. Yet, the financial markets we venture into are anything but sensible lately. We looked at five common-sense rules of investing through the navigational scope of what took place over the last few years. We explain why those rules appeared to be broken and why same rules will get us back on course and guide us to our destination.

As a quick reminder, our core mission is to provide you with as much financial predictability as possible in an inherently unpredictable world. Think of your investment team as a ship captain who is assembling a crew that will take you and your financial ship over the waves and into the open seas. Our strategy revolves around thoughtful asset allocation.  This includes the selecting of fund companies and managers who exhibit astute management of economic risks and market volatility with grizzled seafaring discipline. In simpler terms, we look for seasoned captains and a supportive crew to take the helm who will not get you lost (or seasick).

Staying the Course Amid Uncertainty

We’ve always been drawn to placing tried-and-tested “rules” of successful investing into practice. However, it’s worth noting that they have tried your patience once in a while. When the seas get choppy, does that mean we abandon ship? Do we seek a new vessel and new crew or do we simply wait for the storm to pass?

It’s natural to question the effectiveness of conventional wisdom, and healthy skepticism can be useful, but it needs to be paired with a nuanced understanding of market behavior over the long term. Even though it feels like we are bouncing around in our boat, and by many accounts, heading into “unchartered waters,” we’re neither impulsively jumping overboard in fear nor dogmatically clinging to the mast out of stubbornness. We’re continually scrutinizing our strategies and adjusting our sails, ensuring that we remain on course for the long haul, even as mainstream investment philosophies come under scrutiny.

Let’s now take a look at five common rules of investing, why they were challenged and why they are not broken.