Our capital markets are at once powerful and filled with risk. They offer bountiful opportunities to build real personal wealth. But they also offer plenty of ways for that wealth to end up in other pockets: brokers, managers, fellow investors and so on.
We do not pretend to have forecasting powers or other slick, “market-beating” techniques that, in reality, are only expected to increase costs and anxiety, and decrease expected returns. In distinct contrast to the traditional Wall Street race (in which chasing yesterday’s returns is tantamount to strategy), J.F. Williams Co., Inc. helps you run with our swift markets rather than compete against them. To do so, we apply six core investment beliefs as follows:
- On markets – Financial markets are at once simple and powerful, translating the complexities of human enterprise into fair pricing from which disciplined investors can expect to generate personal wealth.
- On risk and reward – Expected investment return is inextricably linked to investment risk. BUT, not all investment risk produces investment return. A half-century of capital market research guides us on which risks are worth taking, and which are best avoided entirely.
- On diversification – Capital markets are composed of many “asset classes,” or investments that share common economic traits and risk factors. Asset class diversification (your eggs in multiple baskets) helps further manage the global market risks you need to take to seek desired returns.
- On long-term outlook – Investing requires clarity regarding your time horizon and vision to see past short-term market turmoil. Risk tolerance, including your “sleep at night” factor, is key to staying on track to your goals.
- On costs – Controlling costs is critical. Expenses detract from the returns you get to keep.
- On investors’ “Behavior Gap” – A term coined by financial author Carl Richards, most investors face a long-standing behavior gap between investment (market) returns and investor (their own) returns. Personal investment success has less to do with elaborate skills than essential behaviors.
This is what we believe, and so do many of the academic community’s most respected financial economists.