Investment Principles
Coordinating and managing a portfolio is an integral part of achieving your long-term goals. Moller Financial follows three investment principles that are critical to your success:
Diversify
Over 70% of the global economy and 50% of the global stock market is outside of the U.S. Owning a globally diversified portfolio reflects this reality and may help smooth the ride for long-term investors. Moller Financial’s approach to diversification has three levels.
- Invest globally - U.S. and international markets.
- Add “real”assets - real estate (using investment vehicles known as REITs), natural resources, commodities, or gold.
- Spread risk among hundreds of companies - mutual funds and ETFs (exchange traded funds) help investors own hundreds of companies at once.
Minimize Costs
It has been well documented that high costs erode long-term returns. Most "active" mutual funds have annual expenses of 0.8% or more. We invest our client’s money in "passive" funds that are 50-90% lower in cost than active funds. Instead of hand-picking individual stocks, passive funds buy all the stocks that make up an asset class (also known as an index). Using "passive" index funds allows you to keep more of the return that you earn.
Maintain Discipline
Whether you call it grit, determination, perseverance, resilience, or discipline, staying with your plan through good times and bad is the golden rule of investing. The biggest threat to a well-prepared, long-term plan is allowing your own emotions to get in the way. For this reason, we use time-tested, systematic rules and strategies for managing a portfolio rather than relying on gut decisions.
