In times like these, how do we keep informed with the intel needed to stay disciplined? No one is immune to stress when it comes to the market behaving like it has the past year. In markets like these, it’s important to remain aware of behavioral finance and its effects. Behavioral finance is an area of psychology that looks at investors and financial markets – explaining why many investors appear to lack self-control and make irrational decisions based on personal biases instead of facts. The Reddit, Gamestop, Robinhood, and Melvin Capital news stories in 2021 are examples of behavioral finance in action. How do we remain disciplined when others around us are not? One of the most important factors is where we get our information.

We believe that this information can also benefit you – our clients, connections, and friends. We want our clients to stay informed with balanced and factual information, not driven by inflammatory headlines.

Even though the last 4-5 years have seen historical gains, we knew that couldn’t last forever. The stock market’s historical average is 7% gains – not the ~20% we’ve seen over the last few years.

As a firm, we believe that asset allocation and portfolio construction provide the most value followed by investment vehicles and individual stocks. Stock picking is the least effective and produces the least value over the long haul.

We are very systematic. Our process for gaining information is a part of a disciplined process on a daily, weekly, and monthly basis that we have put in place to protect our client’s assets and make good investment decisions based on risk tolerance and time horizon.

Daily, we read market reports and information from trusted sources (see below). We read multiple sources and look for themes. We don’t read any one source exclusively. Each week, we review individual positions and look at how they’re performing and how they are living up to what we’ve selected them to do. On a rolling annual basis, we review each client’s portfolio in its entirety. Monthly, we hold our investment policy meeting. Our four partners get together and dig deep into how our portfolios are doing, particularly in relation to what’s going on. We look at what’s undervalued, what’s overvalued, etc. Each partner brings their perspective to the table and we make sure that no one is an outlier. These systems help us keep disciplined, which benefits our clients.

Where do we look for our information?

Wall Street Journal – Paid service. Online and Print. This is our top recommendation for our clients. Balanced and entertaining.
The Kiplinger Letter – Paid service. Weekly report, sent electronically or via mail. A very good resource for clients. More “how to” and practical in nature.
Barrons.com – Paid service. General overview information. We caution against the stock-specific information on this site.
Morningstar.com – Paid service. Not recommended for our clients – too detailed for the average client.
Charles Schwab– Charles Schwab is our Custodian and as such, we have access to a plethora of reports and information. Similar to Morningstar, but with a different “flavor”
JP Morgan – They manage primarily institutional assets. They rarely make predictions, but provide well-balanced information in their Guide to the Markets.
Podcasts – Barron’s Streetwise and WSJ – What’s News?

Where do we NOT Look for information?

Television – just say no. TV is in the business of selling advertising, not in delivering unbiased news.

We want educated clients – we want you to know the market so you can ask better questions. We want to hear from you. So, we encourage you to check out the Wall Street Journal, Barrons, or The Kiplinger Letter to get your information. Then, come to us so we can discuss it together! When you work with us, you can count on our disciplined process and proactive communication to help put your life at the center of a thoughtful, purposeful plan.

If you have any questions about the market, our trusted news sources, or anything else, please feel free to call us at (706) 364-4281. We’d be happy to speak with you.