Financial Planning Fridays #144: Keep It Simple
A simple, disciplined process underlies this investment strategy. This video walks through four components: broad-market, low-cost ETFs, global diversification across thousands of holdings, high-yield cash management for uninvested funds, and rebalancing whenever the market moves 5%. It's a process that has been refined over 24 years of practice.
A simple, disciplined process underlies this investment strategy. This video walks through four components: broad-market, low-cost ETFs, global diversification across thousands of holdings, high-yield cash management for uninvested funds, and rebalancing whenever the market moves 5%. It's a process that has been refined over 24 years of practice.
Key takeaways
- Low-cost, tax-efficient ETFs that track broad market indexes are used to build client portfolios.
- Global diversification across thousands of stocks and bonds is intended to help reduce risk and increase opportunity.
- Uninvested cash is placed in a high-yield money market rather than left in lower-yielding accounts.
- Rebalancing whenever the market moves 5% is designed to remove emotion from investment decisions and keep portfolios aligned with long-term goals.
Hi friends, at Presilium, we believe that a simple, disciplined investment strategy is the most effective way to help you achieve your long-term financial goals. Here's what that looks like for us in practice.
First, we use broad market exchange-traded funds. Your portfolio is built using low-cost, tax-efficient ETFs that track broad market indexes. These ETFs are highly liquid; millions of shares trade daily, so we can buy or sell quickly as part of our rebalancing process. Second, we believe in global diversification. Inside of your ETFs, you own thousands of stocks and bonds from across the globe. This global exposure helps reduce risk and increase opportunity over time.
Third, high-yield cash management. Any funds that are not currently invested are placed in a high-yield money market at Fidelity. These rates are often significantly higher than what you'd earn in a traditional savings or checking account. And fourth, and finally, disciplined rebalancing. We automatically rebalance your portfolio whenever the market moves up or down by 5%. This removes emotion from the process and keeps your investments aligned with your long-term plan, especially during volatile times.
All of this adds up to a simple, transparent strategy that's tailored to your goals. It's a process that we've refined over the past 24 years, and we're incredibly proud of the results we've delivered for our clients. Thank you, and I look forward to talking with you again next Friday morning.
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