Letting Go

We all have it….the "do something" disease.  While constant activity pays off for some things, it works against us as investors.  Jim Parker draws a parallel between successful investment practice and growing a tree. If we want a healthy tree, we choose a sunny spot with good soil and water and plant the tree in that spot.  After that all we need to do is prune the tree occasionally.  We don't watch the "tree network" for the latest tips on how to grow a healthy tree.

Likewise, successful investors develop an investment policy that supports their long-term financial goals, select the investments (mutual funds designed to capture market returns) that give them the best opportunity to reach their goals, contribute to their investments through saving, and rebalance to maintain their portfolio's risk level.  They don't bother watching the financial media or scour social media for the latest stock tips - they simple let the markets work in their favor over time.

The following article from Jim Parker (Vice President, DFA Australia Limited) provides perspective on this successful "hands-off" approach:

The Art of Letting Go