The first part of 2014 was relatively quiet in the markets, as marked by low volatility. However, in the latter part of 2014, volatility has increased. As we close out 2014 with holiday wishes and set our goals for 2015, make one of your goals to be committed to long-term investing.
Setting goals and establishing why you invested your portfolio in a certain way is the key to maintaining a long-term focus, even when the news is bad. If you have different accounts set aside for different purposes, each account should have a distinct asset allocation to reflect that specific purpose and the time committed to maintaining that investment strategy. Money set aside for short-term goals and reserves might be invested in a money market or fixed income investments to reduce volatility and maintain the principle value. Money set aside for retirement or other longer-term goals typically includes an allocation to equities/stocks, since equities have been proven in the past to provide higher returns above inflation over time. While past performance is no guarantee of future results, investing in stocks, in combination with bonds, over the long-term has been proven to work time and again regardless of the short-term uncertainty that attempts to disrupt your plan.
Here at APCM, we are committed to a disciplined asset allocation strategy. We strongly believe that a diversified portfolio, coupled with low portfolio expenses, will be the winning strategy over time. The key is to stay focused on the long-term goals and make your money work for you.
Enjoy your Holidays, set long-term goals, and we will see you in the New Year!
Director, APCM Wealth Management for Individuals