Jim Parker is a Vice President of Dimensional Fund Advisors in Sydney, Australia. Formerly, a senior editor and financial markets writer with the Australian Financial Review with twenty-five years experience in journalism, Jim holds an economic history degree from Deakin University and a journalism degree from Auckland Technical Institute. Parker presents lessons for individual investors in his most recent column, Outside the Flags. For your convenience, I’ve summarized Five Lessons For Individual Investors along with a copy of Jim Parker’s column.
Lesson #1 - While news headlines worry many people, it’s important to remember that if you hear about or read current events from the media, then capital markets have already absorbed the information and moved on.
Lesson #2 - The economy and capital markets are different. Economic news is important to prices of investments only if it’s different from information already priced into securities by the capital markets.
Lesson #3 - If you’re going to invest by market forecasting, then you need to realize it’s not only correctly predicting what will happen in the future around the globe, but it’s also correctly predicting how the capital markets respond to events.
Lesson #4 - Performance variations of countries are the result of different sector compositions, economic influences, and market dynamics. Variation provides rationale for diversification—spread your risk to smooth the performance of your portfolio.
Lesson #5 - Take an interest in what’s happening in the world. But take care not to extrapolate headlines into investment decisions. It’s better to let the capital markets do the work for you and diversify around risks you’re willing to take.
Chris Bryant, MBA, RFC® is the founder and chief executive officer (CEO) of Bryant Wealth Management, Inc., an independent, fee-only, registered investment adviser. Bryant provides financial planning services for individuals, families, trusts, estates, 401(k) plans, IRAs, and pension plans. Chris has a Masters Degree of Business Administration in Financial Planning from Glendale University and the advanced designation Registered Financial Consultant from the International Association of Registered Financial Consultants. Since 1999, Chris has devoted himself to the practice of financial services – helping people make money, save money, protect money, have convenience and peace of mind. Connect with Chris by E-mail or call toll-free 1-800-980-3048.
Chris Bryant is an American financial advisor.