Advance with confidence

There is no shortage of analysts – professional and arm-chair alike – with seemingly cogent opinions about every market move, minor and major. They claim to know what lies ahead, and how you should react. They tempt you to dash in and out of markets, pick this investment or that, and Act Now – or else!

Cut through these distractions and the solid evidence remains: Nobody knows what lies ahead. More than a half-century of academic inquiry has found no reliable strategy for beating the markets by reacting to near-term news. Over the long-run, such activities cause you to detour or abandon your own, carefully laid plans, while incurring unnecessary costs along the way. If you ask us, that’s not much of a plan.

Clear the path for making sound investment decisions during volatile markets. At Granite Hill, we help you ignore distractions and consistently apply three simple, principles for intentional investing.

1. Manage costs

From trades to taxes, from obvious to obscure, costs matter. Study after study has shown:

  • Lower-cost funds tend to deliver better net returns than higher-cost funds.
  • Individual investors who trade less often tend to incur fewer costs, enjoying better net returns than those who trade more.
  • Even the SEC acknowledges that taxes are among the biggest drags on net returns. You can’t spend what you don’t get to keep.

Points to Take Home:

Choose funds that are lower-cost relative to comparable options.

For your taxable accounts, select tax-efficient funds and consider tax-loss harvesting when appropriate.

Place tax inefficient investments in tax sheltered accounts.

Trade according to plan rather than reactionary emotions.

2. Understand market risk and expected return

In global capital markets, risk and expected reward go hand in hand. Nobody is fond of market risk. But bottom line, evidence has indicated that putting a portion of your wealth in harm’s way is the only way you can expect to build additional, real wealth over time. BUT, future returns are never guaranteed, and you may find you’re unable to withstand the risk long enough to receive the expected reward – or for that matter, you may not need to!

Balance safer and riskier market investments within your total portfolio, to meet your particular risk/reward needs.

Invest according to the academic evidence on how to efficiently and cost-effectively capture your desired risk/reward balance.

Apply global diversification across your total portfolio, to further dampen the risk.

Deploy reasonable, scientifically derived methodology.

3. Stick to the plan

The evidence is strong: YOU and your resolve may well matter more to your end returns than the investments you select. In aggregate investors consistently underperform the very mutual funds in which they’ve invested. How can this be? Instead of patiently awaiting the funds’ delivered returns, they lose patience and begin trading around – usually to their detriment.

Earmark safe assets to meet your spending commitments when markets fall.

Don’t change things in reaction to daily market news.

Periodically return your portfolio to its original, planned mix when it drifts off course.