Six Investment Principles for Wealth Builders

Morgan Ranstrom |

Investment Principles Trump Investment Outlook 

Over the last few years, investing seemed much easier than it actually is due to consistent positive stock market performance. The last month has reminded us that successful long-term investing demands a principled approach to financial markets consistent with your financial plan and long-term goals. This ensures that when the inevitable bear markets and recessions arrive, you have a plan in place and are ready to execute, rather than scrambling to keep up with current events. 

Our firm, Trailhead Planners, has a shared investment philosophy we coach our clients on and help them implement across their investment accounts.

We do this because Investment Principles trump Investment Outlook. Sticking to a core set of principles, or a philosophy, helps us think clearly and act appropriately during times of heightened uncertainty, like the Coronavirus pandemic, rather than making decisions based on daily swings of emotion. 

Six Investment Principles for Wealth Builders

  1. First plan, then invest. 
  2. Focus on the long-run. 
  3. Diversify
  4. Reduce Taxes
  5. Minimize Costs
  6. Stick with it (especially true during bear markets!) 

Morgan Ranstrom, CFA, CFP® and Bill Mulvahill, CFP®, CPA, fee-only financial planners and fiduciaries at Trailhead Planners, discuss our Six Investment Principles for Wealth Builders and much more in the latest episode of Coffee, Sweaters, and Finance!