Investing Principles

Recently I received a call from someone who has an inactive 401(k) and she had questions about what she should do with it. She admitted that she called another “advisor” before engaging me because she felt the balance was below my minimum asset level. I was not apart of this conversation; however, I put the word advisor in quotations above because, in my opinion, I do not believe this person truly embodied what I believe an advisor is. She said the “advisor” immediately started telling her she should fund an IUL or an annuity before completely understanding her purpose for investing. I am not a financial planner on social media fighting misinformation about IUL or annuities, as I am licensed and have sold tons of annuities at another firm. It bothers me when I see clients provided with solutions that do not match their needs. I felt it necessary to share my principles on investing.

When deciding to find a financial advisor to work with, sharing a mutual set of values and beliefs is critical to a successful relationship. As such, below are our investing principles for your review.

Purpose → Plan → Portfolio: Before building a portfolio, the focus of our conversations will be to understand your purpose (and goals) for investing. Next, we will develop a financial plan that will then guide the development of a portfolio that will complement your purpose with each of the following principles in mind.

Investing Principles

Align Your Investments with Your Time Horizon: I believe that owning a diversified portfolio of long-term investments (equities) for your long-term objectives and short-term investments (cash, bonds) for short-term objectives will offer a good probability of achieving your goals. This mix of investments may seem simple, but it is important to investing throughout various market/economic environments.

Expect Volatility: We can likely anticipate bear markets as they have historically occurred about once every 3-4 years. Despite these events, over the last 65 years, the market (as represented by the S&P 500) has grown by almost 100X, excluding dividends. The only thing that was required of investors to earn that return was simply to stay invested.

Stay the Course: Given the performance noted above, it is my opinion that investing success is much more about time in the market than timing the market (i.e., the best portfolio in the world will not work if you can’t stick with it.) As such, we do not chase performance or fads, nor do we react to the latest market disaster as those actions will always introduce new, unnecessary risks to your financial plan. If your portfolio is aligned with your goals and time horizon, there should be few causes for change regardless of the news or trends of the moment.

Prepare, Don’t Predict: Since we expect bear markets (we just don’t know the timing of them), we purposefully prepare both mentally and financially for whatever may come next through relevant ongoing communication and easy-to-understand financial strategies so you can feel comfortable standing by your plan during stressful times.

Manage and Minimize Expenses: I believe that a diversified portfolio of low-cost investments may serve a variety of clients in the long run. Additionally, taxes and transaction costs can cause a significant drag on performance, so I seek to minimize these expenses wherever prudent and possible.

I Follow My Own Advice - As the steward of many of my clients’ complete financial lives, I believe that the entirety of my own investable net worth should be invested in accordance with these same investing principles. So, that’s exactly what I do.

I sincerely hope that through combined planning and principles-based investing philosophy, you will feel encouraged to tune out the media and enjoy life a little more.

Any opinions are those of Justin Williams and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. Past performance does not guarantee future results. Forward looking data is subject to change at any time and there is no assurance that projections will be realized. All investments are subject to risk. Every investor's situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary.

Holding stocks for the long-term does not insure a profitable outcome. Investing in stocks always involves risk, including the possibility of losing one's entire investment. Dividends are not guaranteed and must be authorized by the company's board of directors.