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Investment Success by Avoiding Pitfalls

In his groundbreaking book, 'Investment Policy: How to Win the Loser's Game', Charles D. Ellis summed up his portfolio strategy advice in three words...

"Don't Make Mistakes". 

Ellis likened investment success to winning a friendly game of amateur tennis. The player who makes the least amount of errors wins the match. Like in tennis, long-term investment success is achieved by avoiding mistakes, not necessarily making a handful of 'genius' decisions. This is an important point underscored in more recent years by the growing field of investor psychology. Simply put, avoiding mistakes is boring while 'hitting a home run', or making the 'genius' stock pick gets all the attention. 

The pitfalls to avoid are many, but few are as tempting as trying to time the market. While it does not make for scintillating cocktail party conversation, having a balanced portfolio designed specifically for your objectives has more to do with achieving your investment goals than any other factor. Other common pitfalls would be ignoring the impact of taxes and allowing emotions and headlines to drive investment decisions. As is the case with most important decisions in life, emotions tend to cloud the picture. 

We don’t know when the next market meltdown will occur, or what hot stock will skyrocket, but we do endeavor to help you avoid the common pitfalls. 

Winning the game depends on having a plan, sticking to it, and not 'making mistakes'.