We have found that the most successful clients are committed to and trust the decisions we make with them, together, in partnership
As humans, we have a unique ability to trade short-term satisfaction for long-term rewards, and you can’t become a better investor without this mindset.
When it comes to investing, there is also one component that I want to focus on: the right strategy.
Any well thought out strategy starts with creating knowledge, and the strategy around investing is no different.
Build knowledge by investing in yourself
In our organization, we have a saying: “Investing starts with investing in yourself”.
There is no “silver bullet” and good investing requires discipline and ultimately insight to achieve the right long-term results.
Many financial advisors seek clients who are delegators who fully hand over the reins of their investment decisions to them.
However, we have found that the most successful clients are committed to and trust the decisions we make with them, together, in partnership.
This confidence is built over time through the development of your investment knowledge.
To clarify, we do not believe that clients should become experts in the details of every investment in their portfolio. That is the job of the financial adviser.
But it’s critical that clients understand the “why” or logic behind these investment recommendations.
The best investors aren’t afraid to look different
University endowments are a great example of a good investor, one who adopts a long-term mindset rather than succumbing to short-term emotions.
Not surprisingly, many endowment funds are also looking for the right strategy when it comes to investing.
These endowments are brilliant organizations that, through their knowledge, build sophisticated and resilient portfolios.
Many of the top endowments are significantly diversified across asset classes beyond stocks and bonds.
For example, with the Yale endowment, stocks and bonds represent only a portion of its assets.
Many other investment alternatives make up the remaining mix.
To say that endowments invest differently than the typical stock and bond investor would be an understatement. It’s almost like they’re playing by a different set of rules or playing a different game entirely.
The same applies to you as an individual investor.
All clients have unique goals, risk tolerances, and financial planning complexities. So, of course, your bag shouldn’t look like anyone else’s.
But it is only through the knowledge and the confidence that comes from that knowledge that you will be willing to look different and play your own game.