A 5-Step Recipe for Investment Success in This (and Any) Market

By Peter C. Thoms, CFA


  • Own High Quality Assets
  • Employ a Resilient, Time-Tested Investment Strategy
  • Be Tax-Efficient
  • Have a Rebalancing Plan (and stick to it)
  • Play the Long Game


  1. Own High Quality Assets. Start with broadly diversified no-load funds with low costs, minimal trading, and a strategy proven to work across time and markets.  Do not substitute average mutual funds! Most funds charge too much, trade too much, and some even cost you a large commission.  As a result, they often have poor performance and adverse tax consequences.
  2. Employ a Resilient, Time-Tested Investment Strategy.  Mix in a globally diversified portfolio emphasizing value and small company stocks. There is compelling historical data to suggest this type of portfolio delivers the best results.  (For more on this topic see: www.orionportfolios.com)
  3. Be Tax-Efficient. Add a full helping of tax-deductible contributions to IRAs and retirement plans. Put tax-inefficient assets (e.g. high-yield bonds) in retirement accounts where they will suffer no current-year taxation.  Place tax-efficient investments (e.g. stocks, municipal bonds) in taxable accounts.
  4. Rebalance Periodically.  Consistently stir in a rebalancing plan to systematically “buy low and sell high.”  Emotionally, it’s easier to add to asset classes that have recently done well; in the long run, however, it is better to add to assets that have become cheap and reduce those that have become expensive.  Rebalancing will also help prevent over-exposure to any particular asset class.
  5. Focus on the Long Term. Patiently watch your investments simmer. Don’t worry over market ups or downs this week or month. If you are investing today to build a retirement nest egg for years—or decades—to come, look at market downturns as chances to add to investments when they are temporarily cheaper. Would you like to try this recipe? Visit www.orionportfolios.com or give us a call! 619-435-1701