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The Five Key Elements of Investing

For long-term investors who are focused on achieving their financial goals, the five key elements of investing are patience, discipline, asset allocation, diversification, and rebalancing. When markets get volatile, and they certainly have been lately, it's a natural feeling to either want to get out by selling and going to cash, or to question the importance of discipline, asset allocation, and diversification when it seems that correlations are high. I've included some recent charts from a great resource- JP Morgan's Guide to the Markets which is available here: https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/guide-to-the-markets/?gclid=EAIaIQobChMImbap-Kb29AIV78iUCR2XeAcfEAAYASAAEgKyEfD_BwE&gclsrc=aw.ds .


A reminder that sitting in cash hasn't been as "expensive" as it is today at any time in the last 25 years:




A reminder to stay disciplined to achieve balanced portfolio returns. Note, you'd rather be the blue or aqua on this chart (or virtually any color!) than the orange "average investor". Chasing returns, trying to beat the market to the next "hot" investing idea, or selling during market declines are all examples of what differentiates a disciplined investor from an "average investor":



And finally, a reminder of the importance of asset allocation and diversification in creating an attractive risk-reward profile for long term investors:


Please, if you are nervous about the markets or would like to have a conversation, do not hesitate to reach out! We are always here for you.