Have you heard of Sir John Templeton? He was a billionaire investor and philanthropist. He began the Templeton Growth Fund in 1954 and it had an average annual return of 13.8% for the next 50 years! He sold the fund to the Franklin Group in 1992 and died in 2008.
Obviously Sir John’s investment philosophy stood the test of time. The Franklin Group has published his 16 Rules for Investment Success which you should find of interest. One of my favorites is Rule Number 7: Diversify. In Stocks and Bonds, as in much else, there is safety in numbers. This principle is well summarized in one of his many memorable quotes: “The only investors who shouldn’t diversify are those who are right 100 percent of the time.” (By the way, diversity is one of Guidepost Financial’s guiding principles too.)
Earlier this year, Tim Maverick, of Wall Street Daily, wrote an article discussing his five favorite Templeton principles. Here they are:
- Buy low. Duh, right? Maybe, but how often do we see investors putting their money in the latest hot thing — into the fund that is doing well now or into the stocks recently publicized by a Wall Street Journal article?
- Invest for the long term. While Sir John aggressively managed his holdings, he held many investments 5 or so years.
- Diversify. We talked about this above. It’s noteworthy that Templeton was one of the earliest financial advisors to invest internationally to find bargains and to achieve diversity.
- Learn from past mistakes. One of his famous quotes clarifies this point, “The only way to avoid mistakes is to not invest – which is the biggest mistake of all.” So, mistakes are part of the process. The key thing is to learn from them and not to panic when they occur.
- Don’t be over confident. Things are constantly changing, so as the fine print says “past performance is no guarantee of future results.”
Guidepost Financial Planning uses many of the same investment principles that John Templeton advocated. We’d enjoy helping you check the diversity and other key characteristics of your current investments. Please visit our website or give us a call at 970.419.8212 so that we can discuss your financial goals in a no-charge, no-obligation initial meeting.
This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products. Please consult your tax or investment advisor for specific advice.