TAMPA, Fla. – At a recent networking event sponsored by Saltmarsh Financial Advisors LLC, a division of Saltmarsh Cleaveland & Gund, Dimensional Fund Advisors Vice President Dr. Apollo Lupescu acknowledged that people have no shortage of sources of investment advice. Therefore, investors should focus on four key elements for success: purpose, balance, efficiency and discipline.
In his presentation, entitled “The Evolution of Investing,” Dr. Lupescu observed: “How you react to changes in the market can have an impact on the success of your investment experience.”
Lupescu urged investors to “shift their thinking to systematic-driven perspective” and let the following four points be your guide:
1. Purpose: This is the most important element in any portfolio. “What is it you are trying to accomplish with your money? What are your financial goals? Are they specific and are they realistic? Do you have a plan? Clarifying your purpose and having a financial plan is extremely important.”
2. Balance: “In investing, as in life, there are tradeoffs. You have to understand how to balance the tradeoffs. If you don’t balance them properly you can create a situation where you fail to achieve the returns needed to meet your goals or create so much uncertainty that you can’t stick with the plan. The most fundamental tradeoff in investing is safety versus growth.”
3. Efficiency: Information about stocks is quickly incorporated into the price, and it is virtually impossible to make gains through stock picking or market timing. “The old school approach of stock picking is like fishing with a rod versus a net. Instead, we believe you can be more efficient and capture the school of fish through diversification,” Lupescu advised.
4. Discipline: Investors should be cautious reacting to media reports and predictions on market fluctuations or world events. “The news media is entertainment, not advice, and one of their goals is to sell advertising. All of us are being influenced by the media, and they are either tapping into our fear or greed,” he said. “When daily media reports focus almost exclusively on the negative, it’s hard to maintain perspective. As an investor, your best resource is the academic evidence that supports the power of markets and value of long term investing.”
ABOUT SALTMARSH FINANCIAL ADVISORS, LLC
Saltmarsh Financial Advisors, LLC is an independent investment advisory firm focused on providing tax efficient, low-cost wealth management solutions based on our clients’ best interest. Our experienced team of fiduciaries has decades of industry experience in providing cash-flow based financial planning and industry leading state-of-the-art portfolio design with an investment philosophy based on Nobel Prize recognized research. Our mission statement, “Achieving Success by Contributing to the Success of Others,” is core to our client approach. Saltmarsh Financial Advisors is an affiliate of Saltmarsh, Cleaveland & Gund, one of the largest CPA-led business advisory firms in the Southeastern U.S..
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ABOUT DIMENSIONAL FUND ADVISORS
Dimensional is a leading global investment firm that has been translating academic research into practical investment solutions since 1981. Guided by a strong belief in markets, the firm helps investors pursue higher expected returns through advanced implementation. With clients around the world, Dimensional has 13 offices in nine countries and global assets under management of $517 billion as of December 31, 2018. Learn more at us.dimensional.com. Dimensional Fund Advisors LP, an investment advisor registered with the Securities and Exchange Commission, is not affiliated with Saltmarsh Financial Advisors LLC.