oaktree & associates
staying the course
Keep your emotions out.
Stay disciplined
There can be a lot of "Noise", the discipline and emotional aspects can sometimes influence our investment behavior. This can be managed and we will discuss these aspects in more depth through our meetings. There can be a lot of “Turbulence” out there whether its on tv, on the radio, or online. For the most part, their message is very short-term and can compromise one’s long-term focus. There is no crystal ball and accurate predictions are rare. The financial press in general is in the entertainment business - not the knowledge or wisdom business.
Short Term vs Long Term
Truthfully, markets are fairly simple. By owning good quality companies, you have the opportunity to share in that growth. Your available financial means & your investment time horizon should come before determining your performance horizon.
There's always a "Perfect storm" out there.
Your plan will have "Safety nets" built in.
Investment Returns vs Investor Returns
Boston based research firm Dalbar found that for the 20 years ending 2011, the average investor investing in U.S. equity mutual funds had an average annual return of only 3.49% (the investor return). Over the same period the S & P 500 returned 7.81% per year on average (the investment return). This difference can be attributed to a number of factors.
Why such a disparity in the results? According to the study the majority of investors either try to “time the market”, or they simply panic and abandon their long term plan. With market timing they are trying to capture the profits of the stock market on the upswing and miss the losses that occur when the markets go down by attempting to jump in and out at exactly the right time. The plan is perfect in theory but in reality cannot be accomplished with any degree of consistency.