episode: 3

Investment Pitfall #1: Not Having an Investment Philosophy

May 28, 2020

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About This Episode

One of the biggest challenges of investing is being able to stop mistakes from occurring. It’s one of those areas where the winner can be the person that makes the least mistakes.

An investment philosophy that aligns with your goals and personal financial affairs is crucial for achieving financial security. It steers the decision-making process and stipulates how your money will be managed across both good and challenging times.

Especially in challenging times like the current pandemic, high levels of noise make it difficult not to be swayed to make adjustments to your portfolio based on market fluctuations and you’re particularly vulnerable when you don’t have an investment philosophy to guide you.

On this episode, Keith and Marcelo discuss why you need a strategy to avoid making investment mistakes, the components of an investment philosophy, the criteria you need to consider when developing your investment philosophy, the consequences of investing without a philosophy, and more!

Be sure to join us for our next episode where we’ll be continuing the series on the Deadly Sins of Investing by looking at why you shouldn’t build your portfolio based on investment predictions. Thank you for listening!

Key Topics:

  • Common investment mistakes (1:27)
  • The winner can be the person who makes the least mistakes (2:11)
  • The reasons investment mistakes occur (3:05)
  • Everyday sources of noise (3:50)
  • How mistakes affect your long-term investment goals (5:19)
  • Why you need an investment philosophy (5:48)
  • How to develop your investment philosophy (6:57)
  • Human nature and the need for guiding rules and principles (9:10)
  • Linking an investment philosophy to an individual investor (12:07)
  • Benefits of having an aligned investment philosophy (13:03)
  • Consequences of investing without a philosophy (14:23)
  • The impact of not having an investment philosophy in challenging times like these (16:42)
  • Examples of erratic investor behavior during the 2007-2008 market decline (18:44)
  • How to identify the right investment philosophy (21:10)
  • Questions you should ask yourself about your investment philosophy (22:04)
  • And much more!

Meet your hosts

Keith Matthews

Keith Matthews

Partner & Portfolio Manager

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Ruben Antoine

Ruben Antoine

Portfolio Manager

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Marcelo Taboada

Marcelo Taboada

Associate Portfolio Manager

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Thanks for Listening!

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