header shape
header illustration arc

Confidence in Your Portfolio, Confidence in Your Plan

Open any webpage related to financial markets and you will see “It”. It is the latest and greatest, should have bought it two months ago, trade of the century! At least that is what the headlines want you to think. This is typically accompanied by a rags-to-riches story detailing the rise of the lucky few who “knew before anyone else”. Last year it was work from home technology stocks, along with crypto assets. If you were lucky, your portfolio took flight on airlines’ stocks or set sail on a stationary cruise line at the right time. Rinse and repeat for 2021, AMC anyone?

For most of us, the odds of a stock market home run were about as good as winning the Powerball. Did missing out on that one stock sink our retirement hopes? Do we need to gather our resources and prepare to go all in on the next hot stock pick? What is a prudent investor to do when the 24-hour financial news cycle bombards us with the noise? Today’s positive headline will no doubt be spun into tomorrow’s negative theme, and on and on it goes. Missing out on one stock does not sink your financial plan. Risking it all for the next big thing rarely works, and more often ruins everything. Prudent and long-term investors are better served by staying the course.

“Know what you own and know why you own it.” | Peter Lynch

Our chosen course is owning well-run, hallmark businesses that generate growing revenues and earnings. They often return capital to shareholders in the form of dividends. Peter Lynch, legendary manager of the Fidelity Magellan Fund, is widely quoted saying “Know what you own and know why you own it.” Understanding how these companies operate and continually evaluating them affords us a high level of confidence in our portfolio. Couple that with a plan tailored to your needs and you can confidently navigate the noisy path to financial independence. Not to mention, net a significant return along the way.

Staying the course is a great deal easier when the course is clear. This is where your trusted fiduciary advisor comes in handy. Take the time to discuss your financial needs. Share what is important to you, and what is not. Find out if you have a winning game plan, or if you are relying on swinging for the fences. Often enough, you will find those home runs are not necessary. It is the simple things in your plan that win the long game. Get a few hits on a consistent basis, avoid striking out too often, and you will win more than you will lose.

Patrick Gauthier | CFP®️, MSAPM
Portfolio Analyst