Investment Insights 2018: Reby Advisors Moderately Conservative PortfolioSubmitted by Reby Advisors on May 31st, 2018
Our new Investing Insights report reveals the Reby Advisors Moderately Conservative Portfolio, the asset allocation strategy that goes into it, and evidence supporting the strategy. If you'd like to learn more about what we're investing in and why, simply click the button below to download the 3-page PDF (no opt-in required).
The Keys to Avoiding Behavioral Investing Mistakes
The video above discusses how behavioral mistakes prevent investors from getting the returns they deserve. Oftentimes, these buy-sell mistakes may be avoided by aligning your investments with your goals, minimizing fluctuation through diversification, and investing within your risk profile.
A little knowledge and historical perspective helps as well. With the volatility we've experienced in 2018 so far, this is as good of a time as any to revisit why it's so important to stick with a sound long term plan.
Accordingly, we've decided to share an excerpt from Bob Reby's Wealth Redefined: Charting the Way to Personal and Financial Freedom on this topic.
Excerpt from 'Wealth Redefined' Chapter 6
The Most Critical Financial Risk Facing Investors Today: Behavioral Risk
Since 2009, I’ve met with hundreds of families and individuals who missed out—at least partially—on one of the greatest and longest bull markets in history. The chart below shows the damage even a short hiatus from the market did to portfolio performance in the following years.
Note: The bars represent the portfolio value at the beginning of the year. The market lost value in 2008, so both portfolios took a hit to start 2009.
The chart represents the tale of two people who each had $500,000 in the stock market in the beginning of 2008. (I’m using the returns from the S&P 500 as a proxy for the purpose of simplicity.)
The darker bar is the portfolio value of the investor who stayed in the market despite the crash, the media frenzy, and the herding pressures of seeing everyone else bail. The lighter bar is the portfolio of someone who generally trusts financial markets, but decided to get out in 2009 until the dust settled, then got back in to start 2010.
As the chart clearly shows, getting out for just one year—which seems like a reasonable idea given all of the fear at the time about the impending collapse of the entire economy—damaged the investor’s portfolio forever. You can never turn back the clock and get those returns back.
To buy a copy of 'Wealth Redefined' or download a complimentary chapter, go to www.wealthredefined.com.
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