If there was ever a year to test investors resolve, 2008 was it. A new year is upon us and with it comes a good deal of change. Many are fearful regarding the global economy and the future of capital markets. We hope that a restatement of our most fundamental convictions will provide an anchor amidst the tempest.
• I will understand my own circumstances and formulate an investment plan based on my needs, not in anticipation of market trends.
• I will remind myself that investing is not a form of entertainment — if I have an urge to gamble, I will go to Las Vegas.
• I will stick to my plan.
• I will not attempt to pick winning stocks.
• I will ensure that my holdings are adequately diversified within each asset class I own.
• I will focus on minimizing my investment-related costs.
• I will stay abreast of changes in investment-related tax laws.
• I will not purchase any financial instrument I do not understand.
• I will ignore money managers or others selling products rather than advice.
• I will ignore market prognosticators.
• I will take full advantage of my qualified retirement plans by making the maximum allowable contributions I can live with.
• I will hold my least tax-efficient assets in my tax-deferred accounts.
• I will rebalance my portfolio infrequently, but at regular intervals regardless of the current state of the markets.
• I will not allow the price I have paid for a security to influence my future investment decisions—except for tax considerations regarding capital gains and losses.
• At year end I will harvest tax losses simply and without ever deviating from my portfolio’s target 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 factors that are not within my control, I will establish my plan and turn my attention to enjoying life.
Also In This Issue
Quarterly Review Of Investment Policy
Tax Breaks From The Feds
The High-Yield Dow Investment Strategy
Recent Market Statistics
The Dow Jones Industrials Ranked By Yield
Recommended Investment Vehicles
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