Key Investing Guidelines :
Based on our ongoing research on individual stocks as well as the SP500 Index (as representative of the broad stock market), we have developed some key guidelines for managing investment portfolios. These general principles are listed below. This is not an exhaustive list and you are encouraged to further discuss with us these ideas to help you understand our approach better.
- SP500 Index is an efficient vehicle for stock investing.
- It is difficult to match or exceed performance of the SP500 Index with a diversified set of mutual funds and ETFs (Exchange Traded Funds), a strategy most commonly used by investors.
- A high quality, diversified stock portfolio offers an alternative for matching or exceeding the S&P 500 Index returns over time.
- High quality, consistently growing companies as a group have been known to outperform the broad market over the long term.
- For a group of stocks, a direct relationship between long term earnings growth and price appreciation can be demonstrated.
- The inherent risk associated with all equity portfolios can be reasonably managed by employing disciplined strategies during both the "accumulation phase" of pre-retirement as well as the "withdrawal phase" of retirement.
- An investor could potentially benefit more in the long run by focusing on the "total return" aspect of the investment portfolio, rather than segmenting investments into "income" versus "growth" categories.