04/05/2025
Comments on recent market volatility
Our investment and wealth management philosophy hasn't changed. We continue to be guided by the Science of Investing which suggests to focus on the things that you can control. Those guidelines are:
1. Making sure you have the appropriate Investment Policy Statement (IPS) for your portfolio (i.e., how much in equities, how much in fixed income; how much in cash) where you're taking on the appropriate amount of risk that lets you sleep comfortably at night.
2. If you need cash from your portfolio in the next 1-2 years, setting aside those funds in cash (or CDs) now. So that your short-term cash flow needs aren't subject to the market's fluctuations.
3. Having a broadly diversified portfolio among equities and fixed income; US markets and non-US international / emerging markets; small and large capitalization equities, and more.
4. Using low cost investments for your portfolio that are easily and readily able to be sold and converted to cash for when you need cash.
5. Having your fixed income holdings be in high quality investments.
6. Focusing on possibly making changes to the things that are actually within your control (such as your discretionary spending) rather than the things that are outside your control.
Recent market volatility and current events isn't going to change our philosophy. As Warren Buffett counseled in his annual Berkshire Hathaway letter to shareholders from 2017 about market downturns (quoting Rudyard Kipling's 19th Century poem "If-"):
"If you can keep your head when all about you are losing theirs ... If you can wait and not be tired by waiting ... If you can think - and not make thoughts your aim ... If you can trust yourself when all men doubt you ... Yours is the Earth and everything that's in it."
As always, if you have any questions about your wealth management planning, please let us know. Thank you again for having us be your CPA and financial advisor.
