seven principles of long term investing

Seven Principles of Long Term Investing

When you invest for retirement, you are in it for the long haul, but don’t make the mistake that you can set-it-and-forget-it. There are literally hundreds of variables that can impact your investment portfolio and no one person can track or predict them all. New administrations, federal and state, bring changes in economic policies. Domestic and foreign unrest can cause uncertainty. Regardless of what is driving the changes, some stocks are increasing in value while others are decreasing. With so many variables outside of your control it’s easy to fall into the trap of becoming reactive. To help you avoid the trap, we offer you 7 Principals of Long-Term investing. These 7 principals will steer you around the pitfalls that trip up many investors. Things like fear, greed, lack of discipline and groupthink can wreak havoc on a portfolio and prevent you from achieving the standard of living you want in retirement. Nothing is perfect, but if you follow our principals you will be better equipped to deal with what you can’t control making you a happier and less stressed investor.  

Unlike “buy low, sell high” (which is a myth we will take on at some future point) the seven principals are not investing strategies. Rather, they are general practices you should follow over the course of your investing life. We will present them to you in two ways. First, you will find the list below, with brief descriptions of each. Second, over the next several weeks we will go into depth on each, so you will understand of each individually and how they play as part of the whole.  

Again, nothing will guarantee investment success and this list is not exhaustive, but you will find them helpful and useful in making investment decisions.  

  1. Total Return on Investment. As you login to your accounts and to check balances and the latest gains and losses, keep in mind that you should focus on the total return on investment (ROI). The performance of your investments important, of course, but there are other factors to consider. Things like fees, taxes and inflation may not affect the daily performance and you may not see them lurking, but they are there, and each will affect your total ROI.  
  2. Don’t Chase the Crowd. The economic law of supply and demand also applies to investing. More often than not, by the time you hear about the latest, greatest investment the demand for it has driven the price up so high that it no longer makes sense to invest.  
  3. Remain Flexible and Diversified. You are probably aware that it is wise to include different types of investment vehicles in your portfolio such as stocks, bonds, international securities, etc. The complement to diversification is flexibility. Your investment strategy should be flexible so you can quickly adjust as the situation warrants. Recall the factors we mentioned at the beginning, the ones you have no control over. Flexibility can be the difference between huge losses and gains when the unforeseen happens.  
  4. Buy Value. It’s important to keep an eye on market trends and economic outlooks. But using them to decide where to invest can be a recipe for disaster. Buying value – quality investments with good fundamentals – is a strategy that will server you better over the long run 
  5. Manage Risk. Probably the most individual of all the principals, there are two factors that you need to consider when determining risk: personal tolerance and goals. Balancing the two are important to your sanity and investing success.  
  6. Learn from Mistakes. There is a rule of investing for retirement for which there is no exception: you will make mistakes. When you think about managing investments over the course of 30 years or more, you can expect to be perfect. What’s important is how you react to the inevitable and what you learn from it.  
  7. Monitoring Your Investments. Are you up to the challenge of managing your portfolio or are you a candidate for hiring someone to do it? That is the first question you need to answer.  


The 7 Principals for Long-Term Investing can guide you today and for your entire investing future. Over the next several weeks we’ll dive deeper into each, give you questions to consider and include actions you can take now to help you over the long run.  

TAX TIPS – Stay Safe While Shopping Online

While online shopping can be a convenient way to do your holiday shopping, it’s important to keep your information safe. Here are some tips from the IRS to help:

  • Make sure the site you are shopping from is secure. You can tell by looking for “https” in the URL. If there isn’t an “s”, be weary of providing your credit card information. You can also look for a lock icon in the URL bar.
  • Make sure you are using a secure internet connection. Avoid shopping online if you’re using unprotected WiFi, including WiFi networks at the library, work, the mall, or other public places.
  • Look out for phishing emails, which are emails that come from spam accounts pretending to be from a legitimate business.
  • Use unique passwords for each of your accounts and make sure your passwords are strong (at least 12 characters, contain upper and lowercase letters, contain numbers, and contain special characters). Don’t use any personal information in your password, such as your name or family’s names.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.


Tip adapted from IRS[8]  

[8], December 18, 2017

Dow Hits 30,000 – WEEKLY UPDATE – NOVEMBER 30, 2020

The Week on Wall Street

Stocks surged last week, ignited by another COVID-19 vaccine announcement, encouraging economic data, and the easing of political uncertainty.

The Dow Jones Industrial Average rose 2.21%, while the Standard & Poor’s 500 added 2.27%. The Nasdaq Composite index, which has led all year, gained 2.96%. The MSCI EAFE index, which tracks developed overseas stock markets, climbed 1.54%.[1][2][3]

Dow Breaks 30,000

For the third consecutive week, markets opened on Monday to yet another announcement of a potential COVID-19 vaccine.

Stock prices found additional support on news that President-elect Biden would be nominating Janet Yellen, the former Chair of the Federal Reserve, to be Secretary of the Treasury. Investors reacted well to the choice, encouraged by her previously voiced support for greater fiscal stimulus and relieved that a candidate less antagonistic to the industry was selected.

Positive momentum continued into the following day, driving the Dow Jones Industrial Average, S&P 500 index, and the Russell 2000 to record high levels, with the Dow closing above the 30,000 milestone.[4]

Stocks eased off their highs in pre-Thanksgiving trading, though they recovered some of those losses on Friday, as the S&P 500 and NASDAQ Composite closed with fresh record highs.[5]

A Microcosm of the Economy

The economic outlook has been difficult to figure out due to conflicting signals. One day it’s a historic jump in economic growth; another day it’s a record high in new COVID-19 infections. Last week was a good illustration of this. Reports of healthy consumer spending, a solid rise in durable goods orders, and sales of new homes remaining near almost-14-year highs were balanced by a jump in new jobless claims, a decline in household income, and new state and local COVID-related restrictions.[6]

Last week investors chose to see the glass half full and look past the near-term challenges the economy faces.


[1] The Wall Street Journal, November 27, 2020

[2] The Wall Street Journal, November 27, 2020

[3] The Wall Street Journal, November 27, 2020

[4] CNBC, November 24, 2020

[5] The Wall Street Journal, November 27, 2020

[6] The Wall Street Journal, November 25, 2020

Tax Tips – Tips to Protect Yourself From Identity Theft

Tax-related identity theft is when someone uses your personal information to file a fraudulent tax return. They can use information like your Social Security number and other personal details.

Here are some tips to protect yourself:

  • Always use security software on your computer, including anti-virus protection.
  • Use a strong and unique password for each of your online accounts.
  • Look out for spam calls, emails, and texts and report them to the IRS.
  • Protect your information and any of your dependents’ info, as well.

Today’s identity criminals are getting more creative, but you can protect yourself by taking these important steps. Always be careful of who you give your information to.


* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.


Tip adapted from IRS[6]  


[6], March 4, 2020

New Infections Increase Anxiety – WEEKLY UPDATE – NOVEMBER 23, 2020

The Week on Wall Street

Despite news of another COVID-19 vaccine candidate, stocks were mixed amid investor anxiety over an increase in new infections and economic lockdowns.

The Dow Jones Industrial Average fell 0.73%, while the Standard & Poor’s 500 declined 0.77%. The Nasdaq Composite index rose 0.22% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 1.42%.[1][2][3]

Groundhog Week

The announcement of another potential COVID-19 vaccine ignited strong gains to begin the week. But, like the week that preceded it, the gains sparked by the vaccine news were eroded in the following days as worries over the economic impact of new infections moved to the fore.

The market has been grappling with conflicting narratives. One is the optimistic view that, with COVID-19 vaccines apparently near at-hand, the return to economic normalcy grows ever closer.  That hopeful outlook has been offset by anxiety over new infections, rising hospitalizations, and some local and state lockdowns.

These crosscurrents kept stocks range bound for the week, with the technology sector and small and mid-size stocks lending support to the overall market.

Powell Sounds a Warning

In a speech last week, Federal Reserve Chairman Jerome Powell warned that the nationwide increase in COVID-19 cases could hamper economic activity in the upcoming months. He expressed concern that consumer spending may trend lower despite efforts to control the spread of infections.[4]

Powell once again voiced his support for additional fiscal stimulus to assist small businesses, state and local governments, and the unemployed. He also said that even after full economic recovery, some businesses and workers may wrestle with an economic landscape altered by the coronavirus.


[1] The Wall Street Journal, November 20, 2020

[2] The Wall Street Journal, November 20, 2020

[3] The Wall Street Journal, November 20, 2020

[4], November 17, 2020

Tax Tips – Special Tax Considerations for Veterans

Veterans face unique tax considerations due to their status. This includes disabled veterans. Here are some things to consider for disabled veterans and their families:

  • Disabled veterans may be eligible to claim a federal tax refund if they receive an increase in the percentage of disability from the Department of Veteran Affairs.
  • They may also be able to claim this tax refund if they are granted Combat-Related Special Compensation.

A disabled veteran can file Form 1040X, Amended US Individual Income Tax Return, if they need to make changes to their return based on the above or other changing circumstances. The veteran may only have to file an amended return on the year that the change is made.


* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from[7]


[7], April 21, 2020

Markets React to Election – WEEKLY UPDATE – NOVEMBER 9, 2020

The Week on Wall Street

Stocks soared last week as investors anticipated that a split Congress would raise legislative hurdles to changing corporate taxes and adjusting regulatory oversight of big technology companies.

The Dow Jones Industrial Average jumped 6.87%, while the Standard & Poor’s 500 tacked on 7.32%. The Nasdaq Composite index surged 9.01% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 7.65%.[1][2][3]

Bulls Take Charge

Coming off a poor close to October, stocks surged throughout election week, jumping higher in pre-election trading on bargain hunting and strong factory activity. The rally picked up steam as Americans went to the polls and shifted into overdrive Wednesday morning.

Investors were buoyed by Congressional results that indicate that the next president would have to work with a divided Congress. Though a divided Congress might result in a smaller potential stimulus package and continued gridlock, investors seemed to believe that was outweighed by a diminished risk of higher taxes, greater regulation, and policy initiatives that might be challenging to businesses.

Stocks took a pause to close out the week, even as a solid jobs report saw the unemployment rate fall a full percentage point to 6.9%.[4]

Yields Gyrate

Overlooked amid the powerful rally in stock prices was the swing in yields last week. Action in the bond market is important since 10-year Treasury yields are a benchmark for setting borrowing costs for businesses and they represent another view on the strength of the economic recovery.

The 10-year Treasury note rose as high as 0.942% during after-hours trading on election evening and dropped to 0.768% by the end of normal trading hours on Wednesday.[5]


[1] The Wall Street Journal, November 6, 2020

[2] The Wall Street Journal, November 6, 2020

[3] The Wall Street Journal, November 6, 2020

[4] The Wall Street Journal, November 6, 2020

[5] The Wall Street Journal, November 5, 2020

Tax Tips – Know the Signs of an IRS Phone Scam

Unfortunately, criminals often use the IRS as a gateway for common phone scams. These scams can differ, but they generally include someone posing as an IRS agent asking for payment. These calls can be scary, especially if you don’t know what to believe.

Here are some signs of a phone scam so you can recognize them and report them to the IRS immediately:

  • Generally, the IRS will first try to reach you by mail if you owe money. If you haven’t received any previous notice, the call might be fraudulent.
  • The IRS will never ask about personal information over the phone, such as your Social Security Number.
  • The IRS will also never request immediate payment using specific payment methods such as prepaid debit cards, gift cards, or wire transfers.
  • The IRS won’t demand that these taxes be paid without giving you the opportunity to ask questions about the amount owed.
  • The IRS won’t threaten to immediately bring in law enforcement groups to have you arrested for not paying.

If you receive these scam calls, hang up immediately and report the call to the IRS using the IRS Impersonation Scam Reporting form or by calling 800-366-4484.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS[10]


[10], March 9, 2020

No Stimulus, Stocks Lag – WEEKLY UPDATE – NOVEMBER 2, 2020

The Week on Wall Street

Stock prices dropped last week as hopes for a fiscal stimulus bill faded and investors focused on rising COVID-19 infections, here and abroad.

The Dow Jones Industrial Average slid 6.47%, while the Standard & Poor’s 500 tumbled 5.64%. The Nasdaq Composite index lost 5.51% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slumped 5.02%.[1][2][3]

A Difficult Week for Stocks

Stocks opened the week lower as lawmakers failed to pass a fiscal stimulus bill and a pick up in the number of new COVID-19 cases in the U.S. and Europe. Hardest hit were companies most exposed to pandemic-related economic impacts, including energy, travel and leisure, and industrials.

Losses accelerated mid-week on reports of rising coronavirus-related hospitalizations, along with news that Germany and France were reinstating partial shutdown restrictions.[4]

Stocks attempted to recover on Thursday, but took another leg lower on Friday as earnings reports from the mega-cap technology companies failed to impress investors.


Positive Economic News

There were several strong economic reports during the week, but investors paid little attention. Among the highlights were durable goods orders, which rose for the fifth consecutive month, a sharp drop in initial jobless claims that were the lowest since March 14th, and a 33.1% annualized jump in economic growth during the third quarter.[5][6][7]

Investors also ignored a strong start to earnings season, which has seen 85% of reporting companies in the S&P 500 index beating earnings estimates by an average margin of 19%.[8]


[1] The Wall Street Journal, October 30, 2020

[2] The Wall Street Journal, October 30, 2020

[3] The Wall Street Journal, October 30, 2020

[4] CNBC, October 27, 2020

[5] The Wall Street Journal, October 27, 2020

[6] CNBC, October 29, 2020

[7] The Wall Street Journal, October 29, 2020

[8] CNBC, October 29, 2020

Tax Tips – Parents Who Adopt May Be Able to Benefit From a Tax Credit

The adoption credit is designed for families who adopted or started the adoption process. These taxpayers may be able to claim up to $14,080 of credit for each eligible child. To determine eligibility, taxpayers should fill out Form 8839, Qualified Adoption Expenses. This can help you determine how much credit you may be eligible for.

This credit may cover qualified expenses, including reasonable and necessary adoption fees, court costs and legal fees, adoption-related travel expenses, and other expenses directly related to the adoption. There are also income limits that could affect the amount of the credit.

The SECURE Act added an allowance for a $5,000 IRA withdrawal (without the usual 10% penalty) that can be used toward expenses related to childbirth or an adoption. This withdrawal counts as taxable income, though, and must be taken within a year of the child’s birth or arrival.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.


Tip adapted from and[8][9]

[8], March 10, 2020

[9], October 22, 2020