Guess What? There is NO FREE LUNCH.
I saw an advertisement today saying guaranteed 12% return. Really? I thought who doesn’t want 12% guaranteed? Obviously it’s not as good as it seemed…It does reminded me how good investment companies are at marketing new products, new ideas and peddling them to investors.
Unfortunately for consumers, now is the time that these investment companies ramp up their marketing engines and create new products that promise to offer only upside and eliminate the down. The same thing happened in 2008-2009 when I (as I’m sure you were to) was flooded with new investment strategies and products that promised to ease the pain and anxiety were were feeling at the time. After all pain is the greatest motivator to action. Bad news for us is we’re going to start seeing those same ads again in the wake of what we’re going through now. I wanted to bring up this topic so that you’re aware of this and take it all in through the same lens that I do
The problem is, when it comes to investing, it’s probably the most competitive environment there is, after all it deals with money. There is no crystal ball, it doesn’t matter where you went to school or how hard you try, markets work. They do a great job at pricing securities in such a way that matches risk and return and sets prices fairly and instantaneously.
While we will continue to evaluate all investment opportunities out there for you, we will never pitch a product or try and sell you something just because it sounds good. Our investment offering matches squarely with our investment philosophy which will NEVER attempt to predict the future or outguess others. Instead we draw information about expected returns from the market itself. We rely on information that is sensible, persistent over time and pervasive across markets. You can see below our core beliefs when it comes to developing investment portfolios that will last overtime.
Markets Work
Capital markets do a good job of fairly pricing all available information and investors expectations about publicly traded securities
Diversification is Key
Comprehensive, global asset allocation can neutralize the risks specific to individual securities
Risk and Return are Related
The compensation for taking increased levels of risk is the potential to earn greater returns
Portfolio Structure Explains Performance
The asset classes that compromise a portfolio and the risk levels of those asset classes are responsible for most of the variability of portfolio returns
Having core beliefs and an investment philosophy that’s rooted in science helps us stay disciplined through good times and bad. You can always read more about our investment philosophy by clicking here but know that the one of the first things that goes through our mind when I see new ideas is that THERE IS NO FREE LUNCH.
If you have any questions or need to schedule a call to talk with either Mike or myself click one of these links below..
Have a great weekend!
