“There’s one robust new idea in finance that has investment implications maybe every 10 or 15 years, but there’s a marketing idea every week.” – Nobel Prize recipient Eugene Fama
Before adding assets or changing strategies in your portfolio, ask yourself the following three questions.
- What is this strategy claiming to provide that is not already in my portfolio?
- If it is not in my portfolio, can I reasonably expect that including it or focusing on it will increase expected returns, reduce expected volatility, or help me achieve my investment goal?
- Am I comfortable with the range of potential outcomes?
If your answers create any doubts, consider delaying the portfolio changes you had in mind. Remember that sticking to a long-term, disciplined investment approach, based upon research and implementation, may be your best approach to navigating the markets. The performance review of first quarter reminds us of that.