This is the first article of the Investment Blog, where we will be highlighting key investment topics each quarter that we feel are important to understand and remember. Smart, disciplined and research-backed investing focuses on the things we can control using data and information about the market. Equally important is understanding the behavioral and emotional responses that many investors are negatively impacted by – and how to avoid the common pitfalls.
In future months, we’ll dive into topics such as the importance of proper diversification, market timing and behavioral economics. To kick off the series today, we want to talk about focusing on actions that add value.
In life, there are things we can control, and things that are outside of our control. The same goes for investing. Generally speaking, there are five things we can control:
When we focus our energy on these five things, we increase our odds of success. We let the markets work to our advantage and add value by integrating research, portfolio management and trading in a way that reduces the total cost of pursuing expected returns.
It’s easy to get caught up in the things we can’t control. We hear news, see changes in the market, or have thoughts and opinions about what's going to happen in the future. We may feel the need to act – or react – to information, and may see it as an impetus for action. These types of reactions, however, are exactly what detracts from good investing and strong returns in the long run.
Taurus Capital brings focus to the five things we can control. We know that research shows that sticking to a well-diversified portfolio structure yields greater returns, and also minimizes the costs and taxes associated with turnover. Our portfolios are designed knowing that the markets will do what the markets will do, and that the best thing we can do is be smart and disciplined in our approach. Having a disciplined approach allows for the implementation of portfolios that take advantage of academic research in building portfolios that improve the odds of long-term investment success.