top of page

Avoid Missed Opportunities With a Great Game Plan and Diversification Focused on Market Returns


Warren Buffett says “Investing is simple, but not easy.” What’s simple is that staying the course and continuing to invest into market downturns, which has generated superior returns.

What is very hard to do is for investors to keep fear and emotion in check, to not let bear markets destroy your game plan and transfer your potential winnings to another investor who stays the course.

Every client of our firm has an investment policy statement, derived from quantitative analysis of their risk profile, and set to help them financially achieve goals and objectives with a better mix of risk and reward that is unique to all of them.

It’s key to not have more risk than you can handle or need to take, but to take enough risk that your plan is going to have the higher chance to be successful for you if you stick to it. When we speak of diversification to help smooth out returns and protect us against unnecessary risks to one or a few assets losing value, by being diversified, we improve our chances of owning more winners.

If we look at the global stock market, in twenty years, from 1994-2014, by owning the market we earned 7.5% a year. If we excluded just the top 10% of performers each year in the market, returns drop 4.5% annually to 3.2%, and if we miss the top 25% of stocks each year we lose 6% each year. Owning more stocks improves our probability of owning winning stocks. It also smooths out returns and takes much of the guesswork out of the markets and stock selection.

Comments


TruNorth Capital Management L.L.C. (TruNorth Capital) is a fee-only Registered Investment Adviser (RIA) registered with, and regulated by, the United States Securities and Exchange Commission (SEC). TruNorth Capital is limited to providing advisory services to residents of Michigan, Missouri, Washington, and other states where TruNorth Capital is notice filed or is exempt from notice filing. Most but not all states permit a RIA to have a minimum number of clients before notice filing is required, providing the RIA has no physical presence in the non-resident state.  All clients and potential clients have access to important information about our business methods, fees, professional qualifications and all other pertinent business information. By using this website, you accept our Terms of Use and Privacy Policy. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in loss.

Regarding the interaction TruNorth Capital or its representatives may have with clients and/or potential clients in ERISA-covered plans, including SEPs, SIMPLEs and non-ERISA retirement plans that are subject to Section 4975 of the IRS Code, including IRAs, Keogh plans and Solo 401(k)s (collectively "retirement plans"), TruNorth Capital may provide non-discretionary investment advice to a specific investor, recommending or suggesting the acquisition or disposing of securities or other investment property in a retirement plan and/or recommending a rollover from a retirement plan to another. During the course of this interaction, TruNorth Capital meets their requirements of a "level-fee fiduciary" and adheres to the Impartial Conduct Standards that require TruNorth Capital to a) provide advice that is in the client's best interest, b) receive only reasonable compensation for its advice and; c) not make materially misleading statements. 

© 2024TruNorth Capital Management, LLC

bottom of page