Everyone Can Have a Successful Investment Experience

1. Financial Advisors work for who pays them… Make sure that is you.
2. Capital Markets work, therefore no security is "mispriced" and "timing" doesn't work.
3. Capital markets have produced good returns, there for the taking.
4. The investor's expected return is the company's (user's) cost of capital:
   • Corollary 1; the riskier the company, the higher its cost of capital, thus the riskier the company, the higher expected return to an investor.
   • Corollary 2; the only way to increase expected returns is to assume more risk.
5. Three Dimensions of risk drive portfolio expected returns:
• Market (Equity vs Fixed Income)
• Size (Small vs. Large companies)
• Style (distressed ("value") companies vs. healthy ("growth ) companies
6. Same 3 dimensions affect International companies, which also add positive diversification.
7. Fixed Income should be short term, high quality, and include foreign sources.
8. Use funds that statistically mimic expected returns and risk of each asset class.
9. Balanced "Market" Portfolios consistently beat active managers because the COSTS of active management make consistent out performance impossible.
10. Build a portfolio by starting with equivalent of the capital markets ("60/40"), then add or subtract each risk dimension to add expected returns (e.g. more Small Cap), or to lessen risk (e.g. more Large Cap).
11. Set up an initial complimentary consultation with us by calling (908) 322-9200.

Relax:
Shut off CNBC. Cancel all those magazines and newsletters, and fire the brokers/salesmen who pretend to see the future … They don't and they can't.