Are We Ruled by Emotion

To benefit from the potential for market growth, investors must stay the course.


The Power of the Markets

We all hear the din. The market is up, the market is down, the market is overvalued, the market is undervalued. The truth is that no one knows what the market will do tomorrow. But over the long term, the markets – stocks, bonds and other securities – have consistently delivered better results than leaving money in risk-free investments such as savings accounts or Treasury Bills*.

 

Critical Role of an Advisor

Financial advisors help their clients plan for specific goals and understand their personal tolerance for investment risk. Another important role of advisors is helping their clients “stay the course” during major market movements. This is not to say that an advisor can prevent the value of a portfolio from declining. However, advisors can help investors remain committed to their long-term investment strategy even during market corrections.

 

A Disciplined Approach

Individual investors often make financial decisions that are driven by emotion. They tend to buy near the high, sell near the low, holding onto losers too long and selling winners too quickly. Our passion is to build portfolios designed to capture the potential for broad market growth using an efficient, highly disciplined process. Professional financial advisors help investors determine which of our portfolios best suits their needs, and they help them stay focused on their long-term investment strategy – whatever tomorrow’s market brings.

 

*Source: Dimensional Fund Advisors. Return of the U.S Market minus the return of U.S. Treasury Bills, 1927-2013.8