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Pursuing a Better Investment Experience

With the internet providing investors with a wealth of information regarding investment and retirement strategies, it’s hard to sift through the clutter and identify what truly is important and what will work for you and your family or business. Smith Bruer Advisors uses evidence based investment theory to help individuals pursue a better investment experience, summarized with these ten facts.

1: Embrace market pricing

World Equity Trading in 2018The market is an effective information-processing machine. Each day, the world equity markets process billions of dollars in trades between buyers and sellers—and the real-time information they bring helps set prices.


 

2: Don’t try to outguess the market

US-Based Mutual Fund PerformanceThe market’s pricing power works against mutual fund managers who try to outperform through stock picking or market timing. As evidence, only 23% of US equity mutual funds and 8% of fixed income funds have survived and outperformed their benchmarks over the past 20 years.


 

3: Resist chasing past performance

Do Outperforming US Equity Mutual Funds Persist?Some investors select mutual funds based on their past returns. Yet, past performance offers little insight into a fund’s future returns. For example, most funds in the top quartile (25%) of previous five-year returns did not maintain a top‐quartile ranking in the following five years.


 

4: Let markets work for you

Growth of a DollarThe financial markets have rewarded long-term investors. People expect a positive return on the capital they supply, and historically, the equity and bond markets have provided growth of wealth that has more than offset inflation.


 

5: Consider the drivers of returns

There is a wealth of academic research into what drives returns. Expected returns depend on current market prices and expected future cash flows. Investors can use this information to pursue higher expected returns in their portfolios.

Dimensions of Expected Returns


 

6: Practice smart diversification

diagram6Holding securities across many market segments can help manage overall risk. But diversifying within your home market may not be enough. Global diversification can broaden your investment universe.


 

7: Avoid market timing

Annual Returns by Market IndexYou never know which market segments will outperform from year to year. By holding a globally diversified portfolio, investors are well positioned to seek returns wherever they occur.


 

8: Manage your emotions

diagram8Many people struggle to separate their emotions from investing. Markets go up and down. Reacting to current market conditions may lead to making poor investment decisions.


 

9: Look beyond the headlines

diagram9Daily market news and commentary can challenge your investment discipline. Some messages stir anxiety about the future, while others tempt you to chase the latest investment fad. When headlines unsettle you, consider the source and maintain a long-term perspective.


 

10: Focus on what you can control

diagram10A financial advisor can offer expertise and guidance to help you focus on actions that add value. This can lead to a better investment experience.


 

Ready to empower yourself with a strong financial plan?

Have a question? We're here to help.

Simply complete our contact form or contact us via phone or email.

(850) 877-0803
info@smithbrueradvisors.com

Please note that we have an account minimum requirement of $500,000.

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1700 Summit Lake Drive, Suite 102
Tallahassee FL 32317


Ph: (850) 877-0803 F: (850) 298-8662


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