“Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, reach for a bucket.”

Warren Buffett

The sentiment expressed by Warren Buffett is an important reminder that when the economy and markets swing to extremes, long-term investors should be ready to capitalize on opportunities. Executing on that idea requires a resolute approach that removes emotion from decision making. Relying on a strong set of principles is paramount in this process. At WEALTHSTONE ADVISORS, we utilize 6 Key Foundation Stones to guide our clients through rough terrain. During Q1, we used our disciplined approach to rebalance portfolios and we conducted tax loss harvesting where it was most applicable. Rebalancing is designed to maintain appropriate risk weightings and tax loss harvesting helps us “Control what we can Control” by reducing future tax expenses for our clients.

Regarding rebalancing, this Forbes article from 2012, “The Value of Rebalancing”, summarizes the short-term and long-term value of disciplined rebalancing. Investors can exercise risk management in their portfolios through disciplined rebalancing back to targeted strategic asset allocations. Over time, rebalancing can potentially increase portfolio returns and reduce risk— an enhancement over which the investor can exercise control. 

Looking ahead, this informational table from our partner Dimensional Funds entitled “The Cost of Trying to Time the Market” demonstrates how missing out on just a few positive days leads to inferior results. This remains an important consideration since most of the market’s strongest positive days actually happen after significant declines and during the early stages of recovery.

Please contact WEALTHSTONE ADVISORS with any questions. 

WEALTHSTONE ADVISORS is a federally registered investment adviser under the Investment Advisers Act of 1940. Information in these materials are from sources we deem reliable, however, we do not attest to their accuracy. Our commentary is purely for informational, educational, and research purposes only. Past performance does not guarantee future performance results.