“That’s all, folks – The Brexit crisis is over”, is the heading from Yahoo Finance as I write this article. The volatility associated with the potential unraveling of the European union is what the article is referring to. Is it really over? I guess it doesn’t matter because even if it is, there will be the next event which will cause market volatility. It almost seems to us like the growing number of “bears” have become fully consumed with trying to find something to make an event out of. The media and hype to the “Brexit” was phenomenal. I don’t personally remember when in my last 19 years in this business did I see such a flurry of articles and opinions on a market moving event. Yet, here we sit, two days after the drama and the “market” is nearly back where we we’re prior to the surprise.
It’s no wonder the average investor returns are so paltry as compared to the major broad indexes. With the massive emotional influence of the media it can become very difficult to stay the course and maintain your discipline.
This is one of the primary reasons we are here doing what we do. Helping you avoid making the great behavioral blunders that most investors make. Our belief is that we need to apply the proper asset allocation and diversification based on your goals and objectives with a focus on reducing expenses, minimizing taxes and turnover, utilize tax-loss harvesting, optimize the portfolio with alternative investments, and apply tolerance-band rebalancing.
In that vein of thinking we would like to share additional commentary from Dimensional Fund Advisors who we also believe is a beacon in intelligent thinking regarding proper portfolio construction. Click here to read Dimensional Fund Advisors Special Posting.