Why a Great Investment Strategy is Boring For You and A Lot of Work For a Great Investment Advisor

After being in the investment management business for 25+ years I can truthfully tell you that a successful, long term investment strategy is a pretty boring thing, at least from a client’s perspective.

And boring is good.

Why? Because a lot of buying and selling in your portfolio costs you money. And while no one can control what the stock and bond markets are doing, we can do our best to control two things — the costs incurred to invest your money, and reducing your tax liability (as it pertains to investing) as much as possible.

But in order to get to the place where things are boring, and in order to keep things boring, a lot of work has to take place.

A truly great investment advisor will do a lot of work on the front end with a new client; i.e. meeting with a client, spending hours in conversation about a client’s goals, dreams, feelings about risk, plans for their money and, most importantly, the plans for their life.

Only when these hours of conversations are concluded will a great advisor then begin to implement an investment strategy for the long haul.

And once that investment strategy is in place, from a client’s viewpoint, things may begin to look a little boring.


Why? Because all the work that is being done to keep things boring (and successful) is all being done in the background.

A great investment advisor does not call routinely to recommend you buy this or sell that. No, a great advisor reads a LOT, keeping abreast of what’s going on in the economy and analyzes the effect any economic changes may have on you and your investments.

They keep up on the latest tax law changes, because it’s not important what you earn on your money, it’s important what you keep!

They pay attention to the political scene, as unsavory as that is sometimes, evaluating proposed law changes that may affect your investments.

And they monitor your portfolio on a regular basis to see if any tweaking needs to be done to keep your investments aligned with the amount of risk you are comfortable taking.

One of the things I have always loved about the financial planning and investment management business is that it requires ongoing learning, and I am a life-long learner.

For me there is never a dull moment. There is always something happening in our world that may have either a positive or negative effect on your investment strategy, but short of a life-changing event or a world calamity, staying the course with your strategy is usually the outcome of all the evaluation and analysis being done on your behalf.

I have always felt that it was part of my job to be your delegated worrier — let me worry about the things that may cause a negative investment outcome, while you go about the business of enjoying your life.

I enjoy keeping up on things. I enjoy learning. I love attending conferences to enhance my knowledge and skills. And, by nature, I’m not really much of a worrier. My entire life I have planned for the worst while expecting the best which has given me a pretty good outlook on life.

And at this stage of my career I’ve been through some horrific as well as euphoric times in the stock market and have seen that if you just be patient things tend to always get back to normal.

One of the benefits of aging is that you have the luxury of being able to see the cycles in life. And there are cycles in the stock market as well. The experts call this getting back to normal thing “regressing to the mean”.

So I don’t worry much. I tend to stay focused on the things that are the most important:  Does your investment strategy allow you to sleep at night? Are you using your money to enjoy life to the fullest while at the same time being prepared for life’s surprises? For whatever time you have left in this life are you living life the way you want to?

So let your investment strategy be boring — as long as your life isn’t.

The picture with this post is a place we visited Sunday. This is Cochiti Lake which is a reservoir on the Rio Grande River that is a fabulous recreational area about 45 minutes from our home. We plan on camping there as they have a beautiful RV park, swimming, boating, kayaking, and fishing. And the mountains in the background are just gorgeous. This is one of the prettiest places I have seen in New Mexico and we have been all over the state.

So what exciting things are you doing in your life lately? Feel free to leave a comment, I’d love to hear!