What Can You Control?
As we face ongoing economic uncertainty, global political strife, and the upcoming U.S. presidential election, it is easy to feel overwhelmed, distracting us from the long-term financial goals we've worked so hard to achieve. Now that I am in my mid-sixties, I make an extra effort to remind myself why it's so crucial to stay committed to the three core principles of Coffeehouse Investors —principles that we can control, no matter what's going on in the world.
Don’t Put All Your Eggs in One Basket – Diversify.
Diversification should be the bedrock of your portfolio, ensuring that you don’t rely too heavily on one investment or sector to help reach your financial goals. Diversification in common stocks allows us to participate in various stocks and sectors, whatever that may be. Diversification in bonds may help temper the inherent volatility of common stocks, especially for investors who will be drawing from portfolios in the months and years ahead.
Save for a Rainy Day – Develop a Long-Term Plan.
Saving during our working years and transitioning to a smart spending plan in retirement is vital to our financial well-being. With this discipline in hand, owning an intelligent, long-term financial strategy can help give us the confidence to weather both rainy days and periods of prosperity.
There Is No Such Thing as a Free Lunch – Focus on Low-Cost, Tax-Efficient Investing.
The markets are relatively efficient, meaning trying to outguess them can be a gamble at best. This is why investing in low-cost, passively managed funds and index funds that give broad market exposure may be your best approach. There are no shortcuts - investing requires patience and discipline. The best part of this principle? It allows us to focus, not on the markets, but on the first two principles that matter most of all.
Focus on What You Can Control
It can be difficult to stay grounded in sound investment principles when the markets may tell you otherwise. Revisit these principles and your investment approach in a complimentary strategy call with me. Learn how a successful formula can help move your financial life forward.