The investment process at IFS is centered on developing an investment plan that supports the life you want. We believe that the purpose of developing an investment plan is to ensure that there is a smart place for you to get money whenever you need it. We recognize that life's bills do not always come at the peak of a market cycle, so it is critical to plan ahead. Diversification, discipline and flexibility are fundamental cornerstones of our philosophy.
“Individuals who cannot master their emotions are ill-suited to profit from the investment process.” - Benjamin Graham
We believe that the greatest factor in successful investing is having the ability to control your behavior and emotions. Numerous studies have proven that over time, investments work better than investors. Per the image above, this phenomenon is referred to as the “behavior gap”. The behavioral use of financial products is more of a problem than the financial products themselves.
“Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in the corrections themselves.” - Peter Lynch
We recognize that a disciplined, diversified investment strategy does not exactly provide for great cocktail party conversation. We all know someone that completely knocked an investment out of the park at some point in their life, so it is tempting for investors to try to get in on the action. However, chasing the hot performing investment category or succumbing to your emotions in a down market can sabatoge your ability to build wealth.
"History teaches us that investors behave wisely...once they have exhausted all other alternatives." - Steve Leuthold
We do not believe in making decisions based on variables that are impossible to predict or control over the short term. That being said, we do not believe the markets are completely efficient either. Every asset has an inherent value that is independent of its price. Over time, however, we believe that the price will ultimately revert to the mean and reflect true value.
Continue to Investment Philosophy - Part 2
