Pursuing A Better Investment Experience
On the program this week, I continue and conclude my sneak peek on our new E-book, Pursuing A Better Investment Experience. The E-Book is currently going through graphic design and should be available soon. I will certainly let you know when it is ready for distribution. The great news is the price is right… FREE!
In the first segment I talk about what investors should focus on, that is, what they can control. It is not worth the anxiety, the frustration and the futility of trying to tame the uncontrollable. Instead spend your precious energy, time and resources on things you can control:
1) Have a plan that is customized to you;
2) Manage expenses;
3) Controll portfolio turnover; and
4) Maintain your focus and discipline through good markets and bad.
In segment two of the program, I discuss the problem with building a portfolio based on the hot sector or trend. While diversification is not the sexiest thing in the world, it does have its place in a prudent portfolio. Chasing hot stocks, hot sectors or hot trends is truly a speculative endeavor at best.
Segment three of the program is a high level overview of the factors identified by academic research that drive financial market returns. In a nutshell, the factors are:
1) How much in stocks vs. bonds; (Asset Mixture)
2) Your exposure to small vs. large companies; (Small to Large)
3) Your mixture of low relative price stocks vs. high relative price; (Value vs. Growth) and
4) Your ratio of high vs. low profitability firms. (Profitability)
Of course, this does not mean a portfolio will be completely immunized against security-specific risk. But it is a way of diluting those influences and finding a balance between seeking to improve expected returns and striving for appropriate diversification. I hope you enjoy this week’s program.
Good luck and as always, thank you for listening to my program.
All the best,