Markets are efficient and “beating” the market is highly unlikely and costly to attempt. The only acceptable risk is that which is adequately compensated by an expected return.
EQUITIES / FIXED INCOME
Allocate to equities for growth and fixed income to reduce volatility and conserve assets.
BUCKET APPROACH
Allocation is based on a “bucket” approach to account for individual’s goals, time horizon and risk tolerance for each account.
DIVERSIFICATION
Diversify broadly across asset classes. Rebalance systematically and avoid market timing.
REDUCE COSTS
Use passive/index funds to reduce costs, diversify and capture the full market returns.
TAX SENSITIVITY
Use tax-advantaged accounts, and harvest losses to avoid unfavorable tax consequences.
FOCUS
Ignore the noise.