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What are the Contributors to Client Performance?

Performance is important isn’t it?  When you invest your hard earned dollars, it’s reasonable to expect that your money is working hard for you, and that in the long run, you should be able to get back your money plus a nice return on that investment.

But just how much should you expect your investments to return?  That depends.

There are a number of factors that contribute to an investor’s overall performance.  They are as follows:

  1. Your asset allocation.  If you were to look at your portfolio today, how much do you own in equities, bonds or GICS, or cash?
  2. The length of time that you remain invested.  The longer you invest, the more likely that you will reap the benefits of your investment strategy.
  3. Which investments you select.  As an investor, you can take big risks to try to outwit the market, or you can take no risk and hold GICs, but we would argue that you should look for investments that are (borrowing from the old Ford commercial), “Built to Last”.  
  4. Regular and consistent contributions.  In industry jargon, we call this Dollar Cost Averaging, and it may be the simplest and most important element to achieving investment success.
  5. The quality of advice you receive.  It is well documented that investors that have an advisor are more successful than ones who don’t.  There are important reasons why and they’re not purely based investment selection.
  6. Avoiding large market drops.  This is especially important in the years when you are in retirement and are withdrawing money from your portfolio to live on.

Over the next six weeks, we’ll elaborate on each of these factors, so that you have an intimate understanding of how investment performance is achieved.

Should you have questions about any of the topics or posts, we would welcome the discussion.

Call 1-780-426-2400