Keys to a Successful Investment Experience: Focus on What You CAN Control

Keys to a Successful Investment Experience: Focus on What You CAN Control

By: Vanessa McElwrath, CFP®, CPA, Wealth Management Advisor

For investors, it can be easy to feel overwhelmed by the relentless stream of news about markets. Being bombarded with data and headlines presented as impactful to your financial well-being can evoke strong emotional responses from even the most experienced investors.

For a successful investment experience, investors should tune out the noise and focus on the things they actually can control about their investments.

  1. Create an Investment Plan: The key is creating a plan that fits your needs and risk tolerance. You need a plan that you can stick with in good and bad markets because you’re likely to encounter both.
  2. Structure a Portfolio Around the Dimensions of Returns: In a dimension-based approach, capturing returns does not involve predicting which stocks, bonds, or market areas are going to outperform in the future. Rather, the goal is to hold well-diversified portfolios that emphasize dimensions of higher expected returns, control costs, and have low turnover.
  3. Practice Smart Diversification: Many people control investments by concentrating them in their home stock market. They choose only US stocks and mutual funds and consider their portfolio diversified. Global diversification can broaden your investment experience and help reduce risks that have no expected return.
  4. Manage Expenses, Turnover, and Taxes: At the end of the day, it doesn’t matter how much you make, but how much you get to keep. Remember that high expenses aren’t correlated with high returns. Focus on low-cost, tax-efficient investment vehicles such as passive index funds.
  5. Stay Disciplined Through Market Dips and Swings: Many people struggle to separate their emotions from their investment experience. Markets go up and down. Reacting to current market conditions may lead to making poor investment decisions, and daily market news and commentary can also challenge your investment discipline. You have to look beyond the headlines. When headlines unsettle you, consider the source and maintain a long‑term perspective.

To provide an excellent investment experience, your wealth management advisor should:

  • bring key discipline and focus on these elements of a successful investment experience
  • help you create an investment plan tailored to your specific needs and goals
  • bring focus to actions that add investment value, such as managing expenses and tax efficiency while maintaining broad diversification
  • provide knowledge and encouragement to help your stay disciplined through various market conditions

If you would like to learn more about how we can help you control your investments and focus your mindset, please call our experienced advisors at 512.275.2700 to set up a consultation.

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About Author

Vanessa McElwrath, CFP®, CPA

Develop your comprehensive wealth management plan and achieve your financial goals with ML&R Wealth Management. Vanessa McElwrath brings your dreams to the forefront and guides you on the path to independence. Vanessa’s personal attention to the details and high level of customized advice helps you achieve your long-term goals with peace of mind along the way.

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