The IFM Approach: Introduction
In the investment world, there are almost as many investment approaches as there are investment choices. And because investing is not an exact science, with hard and fast rules, it is often difficult to determine which is the best investment approach for your personal circumstances.
InvestingForMe follows one approach in which we have complete confidence by providing the following benefits:
- Simplicity. Because the world of investing is so large and growing everyday, we try to keep our investment decisions simple and uncomplicated. We keep our investment focus very narrow and very specific. If a new investment idea or flavour-of-the-month comes along and it does not fit within our philosophy or investment approach, we do not spend any time or energy following it. By maintaining a narrow investment focus, we can allocate our limited resources to doing a better job at researching, monitoring and measuring our individual investments and our overall portfolio.
- Consistency. We do not deviate from our investment approach. During good and bad investment cycles our approach remains the same. No one knows what the future holds for us or for our investments. We don’t know what level interest rates will be at next month, next year, or five years from now. We don’t know what world economies will out-perform and which will under-perform. We don’t know which asset-categories will out perform – will it be real estate, stocks, bonds or commodities?
- Control. Because we invest in individual securities such as individual bonds, preferred shares, stocks and Exchange-Traded-Funds, we can better control our investments risks, our investment income, our investment costs, our investment results and we can ensure that our investments support our ethics and beliefs. Control is of major importance for us. Each individual investment must have a specific job to perform within our investment portfolio. We want to be able to monitor, review and measure the job performance of each individual investment. This control enhances our portfolio’s ability to help us achieve our financial goals.
- Mechanization. Part of the simplicity of our investment approach is the result of its mechanical nature. We are not trying to constantly find the latest, greatest investment. We are not trying to time our buying and selling to maximize our profits. We are not trying to second-guess the stock, bond or commodities markets. Typically our selling is mechanical in nature, that is, when certain guidelines are reached then the amount invested is reduced or increased.
- Lower Volatility. Because our investment approach invests in multiple asset categories and shies away from cyclical investment types, our investment portfolios enjoy smaller fluctuations in market value than most other investment approaches. Smaller fluctuations in the value of our invested savings give us greater comfort and confidence in our investment approach.
- Personalization. Our investment approach is focused on our personal financial circumstance, our personal financial goals, ability to save, and ultimately our personal success or failure. We are not interested in how others might or might not be investing. We are not interested if one index or investment category out-performs another. We do not care if some far away land or brand new investment idea is gaining popularity. We are only concerned with our own progress and ultimate success. We give ourselves permission to miss-out on flavour-of-the-month investment ideas. Our savings and investing activities are focused upon achieving our financial goals, not those of someone else.
- Comfort and Confidence. Because our investment approach is simple, consistent and personal and provides greater control, we have greater confidence in our investment decisions. We have greater confidence in our ability to attain our financial goals. The benefits of our approach give us confidence to make tough investment decisions during good and bad investment cycles. Our increased confidence gives us a greater level of comfort with the safety of our savings.
Is our investment approach easy? No. We said it is simple, but investing is never easy. There are just too many competing interests within the investment industry to ever believe that investing can be easy. So what is the downside to our investment approach? What’s on the other side of the coin?
Here are a few aspects of our investment approach that might appear as negatives to some investors:
- Our approach is dull. Investing today has become almost as popular as hockey, football, basketball, and baseball. For many investors, investing is like a sport where individual investments are the drafted players and the investment portfolio is the team. Investors constantly flit between TSN and BNN. They read the sports page and the business page, they listen to the sports commentators describe the latest team upset and then hear what investment just outperformed on the day. For many investors, our approach would be like watching paint dry or their gardens grow. Our approach is just not exciting enough.
- Not much changes. Our investment approach does not create a lot of change. We are not interested in trading or making investment changes simply for the sake of change. Only when an investment matures or when the portfolio requires re-balancing does any change occur.
- We miss out. There is no doubt about it. Our investment approach very rarely enjoys the short-term benefits of the latest investing trend. Whatever investment the financial experts or financial news is excitedly chatting about, there is a good chance that our investment approach will not benefit. Our approach does not allow us to hop aboard the latest investing bandwagon. If the investment idea does not fit with our IPS, we are not allowed to go there.
- We under-perform. Yes, during good stock market cycles our investment approach will typically under-perform the stock markets. But it’s also true that during difficult investment cycles, we will typically outperform. Over a complete investment cycle, our approach will help you to achieve your financial goals, not someone else’s financial goals.
- Takes time and effort. Our investment approach is not for everyone. If you have no interest in investments or you are not willing to invest some of your time to learn about, develop, and monitor your investments, then our approach will be of no value to you. You might be better off delegating your investment decisions to others.
For those of you that have an interest in investing or feel you must regain control of your savings and investments, our investment approach will be of great interest. In the complicated and complex world of investments, the IFM Approach offers a simple, consistent, and reliable investment approach that focuses 100% on the achievement of your financial goals - saving and investing.