Our investment portfolios are carefully designed to help retirement investors reduce risk, improve returns, and create a reliable income stream
3 Investment Principles to Protect Your Nest Egg
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1. Keep Investment Costs Low
According to Morningstar, the cost of your underlying investments is one of the best predictors of future returns. In other words, low-cost investments have historically outperformed high-cost investments. For that reason, we build our retirement portfolios using low-cost ETFs and mutual funds. 2. Own Tax-Efficient Investments Warren Buffett says his favorite holding period is forever. We agree. While buying and holding forever isn’t practical for most retirement investors, we create portfolios with “low turnover.” Every time an investment is bought or sold (i.e., “turned over”), costs are incurred. Not just obvious costs like transaction fees and taxes, but hidden costs like bid-ask spreads. These costs eat away at your investment returns. To optimize investment returns and reduce taxes, we intentionally hold low-turnover investments. 3. Own the Right Asset Classes Not all investments are created equal. Just because you can invest your money in something (e.g., gold) doesn’t mean you should! We only invest in asset classes that:
For example, corporate bonds can behave like stocks during catastrophic events. That does not provide adequate diversification for a retiree. As fiduciaries, our job is to make investment decisions in your best interest. This means ignoring the daily headlines and sticking with evidence-based solutions. |