The last two years have been a whirlwind for capital markets. 2022 saw one of the worst performances on record for the traditional 60/40 portfolio as stocks and bonds grappled with significant setbacks. Heading into 2023, the consensus view foresaw a continuation of the challenges, predicting a probable recession. Contrary to these expectations, a recession did not materialize, and markets staged a recovery. These tumultuous years underscore the enduring importance of strategic financial planning and patience in the dynamic landscape of investments.
Stepping into 2024, the global scenario holds promises of both surprises and setbacks. Nevertheless, our confidence remains steadfast that unwavering commitment to your investment plan can yield long-term rewards. Once again, we urge our readers to re-commit to these timeless principles:
Guiding Principles for Financial Resilience:
- I will remind myself that investing is not a form of entertainment.
- I will stick to my established financial plan.
- I will resist the allure of picking winning stocks.
- I will ignore market prognosticators.
- I will ensure a well-balanced diversification within each asset class I own.
- I will proactively manage and minimize my investment-related costs.
- I will stay abreast of changes in investment-related tax laws.
- I will only invest in financial instruments that I thoroughly understand.
- I will ignore money managers or those prioritizing product sales over sound advice.
- I will maximize contributions to my qualified retirement plans within my budget.
- I will strategically place my least tax-efficient assets in tax-deferred accounts.
- I will rebalance my portfolio at regular intervals, unaffected by short-term market fluctuations.
- I will not allow the purchase price of a security to influence my future investment decisions, except for tax considerations regarding capital gains and losses.
- At year-end, I will strategically harvest tax losses without deviating from my target portfolio allocations, by selling and buying index-type funds within the same asset class.
- I will appreciate the simplicity of the AIS approach. Instead of worrying about uncontrollable factors, I will concentrate on what I can control – and relish life!
Also In This Issue
Quarterly Market Review: A Sentiment Shift
Missing The Best Days: A Reader Inquires
98 Years Of U.S. Stock Market Returns
The High-Yield Dow Investment Strategy
Recent Market Statistics
The Dow Jones Industrials Ranked By Yield
Asset Class Investment Vehicles
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