If the brain is the most important organ for successful investing, the stomach may well be the second as reason and judgment can easily be distorted by fear and other emotions.
Chasing the hot investment, making decision based on market forecasts and avoiding attractive areas of the market and ETFs that have recently underperformed are often the result of being led by one’s emotions.
On the upcoming webcast (available live and on demand for CE Credit), How to Avoid Emotional Investing, Christopher Davis, Chairman and Portfolio Manager of Davis Advisors, will highlight the importance of keeping emotions in check and offer specific insights into developing the unemotional, disciplined and patient mindset required to build wealth.
Davis Advisors manages benchmark agnostic, high conviction, low turnover portfolios. They have over $2 billion invested alongside shareholders in the portfolios they manage, ensuring a strong alignment of interests. Instead of making capricious trades based on instincts, the fund manager has implemented a disciplined strategy to successfully access various markets.
For instance, the management team looks to durability, adaptability and resiliency of a company for strong competitive advantages, superior business models, attractive financials and superior free cash flows. They also select those with proven, capable management with a track record of good decisions, intelligent capital allocators and alignment of interests. Additionally, the team focuses on discount to true value by calculating owner earnings to arrive at the true value of a company.
Related: Transparent Active Equity ETFs – Not An Oxymoron
After a multi-year bull run, U.S. equities are now trading at lofty valuations, so investors may want to consider options outside of this comfort zone. Opportunities can not be found in the average company in our current market environment. Instead, you have to be selective. After a multi-year bull run, investors may be more at risk in traditional passive, index-based strategies. Passive funds have no valuation discipline and will overweight companies and sectors that have outperformed.
Now, ETF investors can also gain exposure to Davis’ proven research and investment styles through the Davis Select U.S. Equity ETF (NasdaqGM: DUSA), Davis Select Financial ETF (NasdaqGM: DFNL), and Davis Select Worldwide ETF (NasdaqGM: DWLD). DUSA is managed by Christopher Davis and Danton Goei, a portfolio manager for the Davis Large Cap Value Portfolios and a member of the research team. Davis also manages DFNL while Goei manages DWLD.
Financial advisors who are interested in learning more about better investment practices can register for the Thursday, October 5 webcast here.