Investment Myths

You don’t have to have all the answers.

You just have to have the right answers.

You just have to have the right answers.

Don’t try to time the market, just buy and hold

Market timing is difficult, but there are periods where astute investors can shift the allocation of various asset classes and industry sectors to minimize losses and capture greater returns.

Mutual funds are an efficient way to invest

Mutual funds are expensive and the fees are in addition to the fees paid to your broker or financial planner. Performance also tends to lag, with little to no opportunity adjust strategy for the current economic environment.

I own big-cap, small-cap and foreign stocks, I am diversified

Diversification is important to smooth returns in a portfolio and to reduce risk from declines in any one asset class. However, to be diversified, asset classes should be negatively correlated. There are times when investors should reduce one asset class in favor of another or even exit altogether and raise cash.

Bond funds are relatively safe

Only by buying individual bonds is your principal protected by the issuer. There is no such protection to your investment in a bond fund.

At my age I should have a 60% / 40% mix of stocks and bonds

A portfolio needs to be protected against losses and positioned to capture gains for taking some level of risk. There is no perfect ratio of asset class mix for a particular age bracket. We look to create the ideal portfolio that balances the risk and reward for the current market environment.

Passive index funds are better than active management

The combination of multiple asset classes such as stocks, bonds, real-estate and cash, can dramatically lower volatility, thereby reducing the likelihood of losses over the short term while still enabling the portfolio to realize investment objectives.