Key Investment Principles

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 We believe capital markets are generally efficient, meaning that security prices reflect all publicly available information. This does not mean prices are always correct, but it does mean that the fierce competition among millions of global investors makes it virtually impossible for any one participant to consistently achieve returns above the market.

With the rise of technology, information is more accessible today than ever before, leveling the playing field between individual investors and professional managers. This increased efficiency reinforces our belief that broad, low-cost indexing is the most effective way to capture long-term market returns. Instead of trying to outguess the market, we embrace it as a powerful wealth-building tool.

 Academic research shows that over 90% of a portfolio’s long-term performance is determined by asset allocation—the mix of stocks, bonds, and other asset classes—rather than individual security selection or attempts at market timing. Asset allocation is essentially the discipline of deciding how much of your portfolio belongs in different “baskets,” with each basket representing a unique asset class.

We work with you to determine the right mix of assets based on your goals, time horizon, and tolerance for risk. From there, we diversify broadly across U.S. and international markets, large and small companies, and both stocks and bonds. A well-designed allocation provides balance—positioning your portfolio for growth while helping manage risk.

 First introduced by Nobel Prize–winning economist Harry Markowitz, Modern Portfolio Theory demonstrates that a diversified portfolio of asset classes with low correlations can maximize returns for a given level of risk. In other words, when you combine investments that don’t always move in the same direction, you create a smoother investment experience and improve your chances of achieving consistent returns over time.

At Timm Financial, we use these principles to build portfolios that are broadly diversified, risk-aware, and grounded in evidence-based research.

 Opportunities for growth are not limited to one country or one market. By diversifying globally, we spread risk and position portfolios to benefit from innovation and progress wherever it happens. While the U.S. remains an economic leader, international markets represent nearly half of the world’s investment opportunities. Allocating a meaningful portion of your portfolio to global index funds reduces your exposure to downturns in any single market and increases your potential for stronger long-term returns. 

 Over time, markets move unevenly—some asset classes will outperform while others lag. Left unchecked, this can cause your portfolio to drift away from its intended allocation and risk profile. Rebalancing is the disciplined process of realigning your portfolio by selling a portion of the investments that have done well and buying those that have underperformed.

This discipline ensures your portfolio stays true to your plan, helping you manage risk and take advantage of opportunities to “buy low and sell high.” While it may feel counterintuitive in the moment, rebalancing has been shown to reduce risk and potentially improve long-term results.

 At Timm Financial, we believe the greatest rewards come to those who stay invested for the long term. Markets can and will decline—often suddenly—but that volatility is the price of admission for owning equities.

Equities offer the highest potential for growth precisely because they carry both ups and downs. The real risk is not short-term declines, but abandoning equities and missing the compounding power they deliver over decades.

Our role is to help you stay disciplined, accept volatility as normal, and remain focused on your long-term goals—so you can fully participate in the enduring growth that equities provide.