Investing in the stock market and fixed income securities through broad based index funds should be a long-term process. Investors need to have the temperament, and discipline to withstand considerable short-term market fluctuations. As such, the market swings opposite to an investor’s portfolio causing losses for several weeks, while friends and other market experts advocate changes this is not the time to panic. The prudent reaction to all of this is that the investor ought to stay put with his/her portfolio without making any changes to the holdings, and to stay the course with the same investment plan.
“Everything should be made as simple as possible, but not simpler.”
Albert Einstein
The portfolio holdings are simply the investor’s collection of investment assets. We try to reduce the suspicion of many investors about the complexity of investing in the financial market. As such, investor behavior, and equally weighted asset allocation are two major factors we take into account in our analysis.
There are many investment approaches carrying with them their own risks. While there are several ways to evaluate risk to help you consider on the appropriate investment approach that suits your goals.
Indexing is the simple selection of securities for an investment strategy. Broad-based indices have outperformed most of the equity and bond funds that are sold to public investors by far. We use index funds, or Exchange Trading Funds (ETF) for portfolio construction. The majority of individual investors seeking long-term successful returns would be better off to adopt such an investment plan. Most investors do not believe that the stock market is actually better informed than they are; likewise, financial professionals still do not accept such premise, perhaps, for they earn fees and believe they can beat the market by picking stocks.
There is a risk in investing, as the prices of securities fluctuate and the returns may be such that the value of an investment may fall below its initial value. You should speak with an authorized investment advisor if you are not sure about the suitability of this type of investment style. We give neither financial, nor tax advice. Therefore, seek independent advice if you are uncertain.