Six key investing principles in current investing climate

By Megan Horneman. © Verdence Capital Advisors

The current investing world is unconventional and volatile for reasons including market manipulation, distortion by record-high liquidity, and speculation in many areas of the investment world. Therefore, we believe it is important to encourage investors to follow these six key investing principles.

  1. Know your risk tolerance: Understand the level of risk that you are comfortable taking in order to help your advisor create a diversified portfolio of investments that will withstand periods of market volatility.
  2. Stick with long-term objectives: Hold onto long-term objectives. Keep in mind: when is retirement? What do you want to leave behind? Are you saving for any major purchases in the future?
  3. Practice discipline and patience: Do not let emotions trump discipline. It is important to let discipline lead you to your long-term objectives and portfolio allocation.
  4. Well-diversified allocation: To minimize losses over the long run have a portfolio with a variety of different asset classes because they can have low correlation or no correlation to each other.
  5. Scheduled additions to portfolios: Spread out allocating your money to help reduce volatility and reduce the average cost of your portfolio.
  6. ‘Get rich quick’ is unrealistic: Do not get too drawn to an investment because it currently has the most hype. Getting rich off a quick return is rare.

The Bottom Line:

For long-term investing success, it is important to follow these six sound key investing principles. Instead of letting emotions or current hype control your investment decisions, remain disciplined and listen to reason.


This material was prepared by Verdence Capital Advisors, LLC (“VCA”). VCA believes the information and data in this document were obtained from sources considered reliable and correct and cannot guarantee either their accuracy or completeness. VCA has not independently verified third-party sourced information and data. Any projections, outlooks or assumptions should not be construed to be indicative of the actual events which will occur. These projections, market outlooks or estimates are subject to change without notice. This material is being provided for informational purposes only and is not intended to provide, and should not be relied upon for, investment, accounting, legal, or tax advice. 

Past performance is not a guarantee of future results.

Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product or any non-investment related content, made reference to directly or indirectly in these materials will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. You should not assume that any discussion or information contained in this report serves as the receipt of, or as a substitute for, personalized investment advice from VCA. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. All indexes are unmanaged, and you cannot invest directly in an index. Index returns do not include fees or expenses.




By Megan Horneman