Investment Philosophy

Over the course of more than a quarter century in the Financial Planning and Investment Advisory business, J.P. King & Associates, Inc. has had the opportunity to observe and analyze numerous investment styles, theories, markets, cycles, products and schemes. Our Investment Strategy is guided by the following conclusions:

• The future is impossible to predict with any degree of precision, so all strategies must take account of uncertainty.
• There is a good reason why prospectuses say that past performance does not guarantee future results: it doesn’t.  However, the past can teach valuable lessons about investor behavior that can be applied to present and future decisions.
• While earning a competitive or even superior rate of return is nearly universally desirable, managing risk exposure is the most important consideration in portfolio design.
• Short-term trends can sometimes persist for extended time periods until they change, often dramatically.  This makes market timing an extremely difficult tactic to employ successfully over time.
• The biggest obstacles to long term success are unrealistic expectations and lack of discipline.  Investors tend to be over confident during rising markets and nervous during falling markets, both of which lead to poor decision making.
• Passive/Index investments have desirable attributes, principally low costs and relative tax efficiency, but have limitations. 
• Active investment managers (AIMs), as a group, reduce net returns due to fees and expenses. Selecting and monitoring superior AIMs is difficult but potentially worth the time and cost.
• While research and analysis are helpful in selecting investments or AIMs, strategic factors such as Investment Policy, Asset Allocation, and Portfolio Rebalancing have a much greater effect on long term results.
• Luck often overshadows skill, especially in the short run.