Our fees are not for attempting to predict the short-term movements of the markets or what the economy will do. No one can accurately or consistently do that. Our fees are for comprehensive financial planning and preparation.
Financial markets are complex, but they don't necessarily require complex solutions. Good investing should be boring. If you want action, go to a casino.
We agree with Leonardo Da Vinci that "simplicity is the ultimate sophistication."
Although more complicated or exotic strategies could possibly prove correct, the simplest solution usually makes the most sense in markets characterized as much by uncertainty (which can't be modeled) as risk (which is the basis for most standard finance models).
The greatest enemy of a good plan is the dream of a perfect plan.
The is no such thing as a perfect portfolio. Looking in the rear-view mirror, we know what the best portfolios were over any period, but the investment or portfolio that delivers the highest return in the future is unknowable.
If there is a perfect portfolio, it's the one you can stick with through thick and thin.
Time is more important than timing. Investment decisions should be made within the context of a multi-decade time horizon and not based on current market conditions or events.
The long term feels like an eternity to live through in real time. The key is to build a portfolio that accepts (not predicts) that downturns will occur with a similar magnitude and frequency as they have in the past.
Investment behavior plays a key role in outcomes. Good investing isn't necessarily about earning the highest possible returns. It's about minimizing mistakes and doing the same thing for decades on end.
The problem for most investors is that they get in their own way. Human nature makes us misinterpret (or ignore entirely) probabilities; we look for patterns where none exist and elicit emotional responses that were useful from an evolutionary perspective but detrimental to good investing (reacting before thinking).
Focus on what you can control.
How much you spend, save, investment costs, asset allocation, emotional responses/behavior, tax efficiency, etc... These are areas in which you can actively improve outcomes. They deserve substantially more attention than attempting to predict the future or outsmart the market.
Copyright © 2023 Gibson Wealth Advisors - All Rights Reserved. Gibson Wealth Advisors, LLC is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Gibson Wealth Advisors, LLC and its representatives are properly licensed or exempt from licensure. This website is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gibson Wealth Advisors, LLC unless a client service agreement is in place.