Re-thinking Your Financial Plan As We Approach Year End?

Dec 17, 2014 | Blog, Investing, Wealth Management

The end of the year can serve as a natural check-in point at which to evaluate your financial plan. The new year suggests reflection and renewal as we look to the season and the year ahead. It is a good idea to assess whether any of your major goals or areas of focus have shifted, and whether your financial plan might need to adjust accordingly.

That said, do not fall into the trap of simply changing your plan to change your plan. The point of creating a customized investment plan and a personalized portfolio is that your portfolio is not based on what the market does today, tomorrow, next week, or next quarter. It is based on you. It is based on what you need this money for and when you expect to need it (for instance, money that you’ll need a year from now doesn’t belong in the stock market). It is based on a wealth of mathematical data about the financial markets. It is based on timeless principles of investing. In short, it is based on two essential considerations: assumptions that are personal to you as an investor, and qualities of market behavior that are evidenced by decades of data. The right time to consider changing your investment strategy is when the basic factors underlying your strategy change. That is, has something occurred in your life that has altered your goals, your time horizon, your financial needs, or your feelings about taking risk?

What the market does moment to moment is not what guides a successful strategy to create long-term growth by investing. Effective long-term investing strategies are not flashy or exciting – those are the hallmarks of fad “strategies,” of chasing short-term returns rather than looking to create long-term growth. Successful long-term investors know that effective investing strategy is timeless, grounded in a scientific approach that is logical, rational, and data-driven. LexION Capital’s global portfolios are based on robust academic research and careful, mathematical analysis of market data.


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