Tom James' 20 Keys to Better Investing
By: Cameron Diehl, CFP®
Friends – Many years ago Raymond James then CEO and now Chairman Emeritus Tom James wrote his “20 Keys to Better Investing” which has been shared with clients for decades. Tom served as the firm’s CEO for more than 40 years after his father Bob James founded the company in 1962. Tom is considered one of the true greats in our industry and is one of the most thoughtful leaders I’ve had the good fortune to work with during my career. I recently came across a copy of his tips and found them to be as timeless today as they were when he originally wrote them.
After re-reading the list, I wanted to share a copy list and highlight a few of my favorite excerpts. If you have a few minutes, I highly suggest reading the full list here. Bolding below is my own.
#1 – “Communicate frequently and frankly with your financial advisor… An honest, sincere relationship is fundamental to the success of the client’s efforts.”
#2 – “Work with a trained financial advisor to develop an agreed-to financial plan that will guide investment decisions. Review it at least annually and revise as needed.”
#3 – “Don’t reach for unrealistically high returns. Keep expectations realistic…”
#5 – “Always strive for diversity among investments, styles and portfolio managers, even when investments appear to offer limited risk…”
#7 – “An asset allocation model should be designed for a client, and a client and his or her financial advisor should meet regularly to determine if the client’s changing economic circumstances require revisions to his or her portfolio…”
#13 – “Treat IRAs and other qualified plan investments as very serious money and let the magic of compounding work…”
#14 – “Don’t try to ‘time the market.’ Be a long-term investor, and practice patience and adherence to an asset allocation model…Dollar-cost-average where possible…”
#18 – “Do not panic out of the market when investments have declined in value because of a general market decline. That is often the most opportune time to increase investment positions, as long as the fundamentals of the selections remain positive.”
#19 – “It is better to err on the side of conservatism than to be too aggressive.”
Conclusion – “If you follow these common sense rules of investing, your results should have a higher probability of success. Although none of these “rules” work all of the time and there are no “guarantees” in the world of investments, these disciplines have produced excellent results over the long term. A disciplined approach to investing, assisted by a financial advisor with whom you have established a good relationship, will better enable you to attain your financial objectives.”
If you have any questions about this list or how it applies to your personal circumstances, please don’t hesitate to reach out. I’m always happy to help.
