Limit the Suds


There’s a great saying in this business: Your portfolio is like a bar of soap: the more you touch it, the smaller it gets.

Making constant adjustments to your portfolio is counter-productive. Markets are erratic and unpredictable in the short term, and can be driven largely by sentiment (greed and fear) rather than fundamentals. Shifting your investments based on headlines or the latest fads often does a lot more harm than good.

Sticking to your asset mix and keeping your hands off your portfolio is short-term boring. But the results are more long-term exciting.

A client’s daughter put it best when he suggested she limit the suds in her portfolio: “That must be how you get filthy rich.”