Matching contributions from your employer may be subject to a vesting schedule. You should discuss any tax or legal matters with the appropriate professional. Raymond James and its advisors do not offer tax or legal advice. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Expressions of opinion are as of this date and are subject to change without notice. I’m always happy to help.ĭisclosures: Any opinions are those of Cameron Diehl and not necessarily those of Raymond James. “Tax-loss harvesting is the crown jewel of tax management.”Īs always, if you have any questions about these concepts or how they may apply to your own planning, please don’t hesitate to reach out.“Successful financial planning is more of an art than a science.”.
“Rebalancing can reduce investment risk and, in some circumstances, even increase investment returns.”.“If possible, keep a small reserve (in a money fund) to take advantage of market declines and buy in a few extra shares if the market is down sharply.”.“Dollar-cost averaging can reduce the risks of investing in stocks and bonds.”.“The trick is to tilt (or flavor) the portfolio in some direction such as “value” versus “growth,” small versus large companies, and relatively strong stocks versus weak ones.”.“The core of every portfolio should consist of low-cost, tax-efficient, broad-based index funds.”.
“In the game of amateur tennis, most points are won not by adroit plays on your part but rather by mistakes on the part of your opponent.“Basically there are four factors that create irrational market behavior: overconfidence, biased judgments, herd mentality, and loss aversion.” And “One of the most important lessons of behavioral finance is that individual investors must avoid being carried away by herd behavior.”.It is also the case that the risk involved in many investments decreases with the length of time the investment can be held.” And “It appears that the only way to obtain higher long-run investment returns is to accept greater risks.” “As I have counseled individuals and families about financial strategy, it has become increasingly clear to me that one’s capacity for risk-bearing depends importantly upon one’s age and ability to earn income from noninvestment sources.If you have any interest in learning more about markets, investing or financial planning, I highly recommend you pick up a copy. There is far too much wisdom packed into this book to do justice in a single post, but below are a few excerpts I highlighted throughout my reading. Along the way he covers the theory and history of markets, the latest trends in finance (including his thoughts on bitcoin) and even provides a guide for investors to pull his lessons together for their own financial planning. Rather he argues in favor of time-tested strategies such as index investing, dollar-cost averaging, disciplined rebalancing, tax-loss harvesting and more. At its core the book’s message is that “short-run changes in stock prices are unpredictable” (a random walk) and that it is extremely difficult for investors to consistently outperform market averages. Originally published in 1973 and now in its twelfth edition, A Random Walk has sold more than 1.5 million copies and is one of the bestselling investment books ever written. Throughout the year I typically read a handful of books on markets, financial planning and investing – and I thought it would be interesting to share highlights from a few of my favorites.įor this first attempt I chose a classic - Burton Malkiel’s A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing. Friends – I wanted to try something new this month.
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