Flaw in the Design: Why Focusing on the Wrong Strategy Could Be Costly

Are you spending too much time worrying about when to invest your money or take it out of the market? How about trying to find those two or three stocks to bring in great returns? In this week's "Making Sense", Ed Butowsky uses an analogy of an architect designing a building to illustrate the importance of prioritizing the structure (your allocation) before the interior (market timing & stock selection).

It would be foolish to focus solely on designing the lights, marble floors, and other features without first creating a strong foundation for the building. Similarly, many finance channels, teachers, and others make the mistake of excessively emphasizing single stock picking and market timing instead of considering asset allocation.

Join Ed as he presents key findings about what truly matters in portfolio design and why. You might be focusing on the wrong aspects without even realizing it. Remember to reach out with any questions and share this video with your friends!

Summary:
- 93.6 return and 98% of risk are decided by asset allocation.
- 4.7% of return comes from security selection, while 2.1% of return comes from market timing.
- When deciding on what to invest in, it would be a much more efficient choice to focus on the sector/industry you would want to invest in rather than a particular company or time of the economic cycle.

➡️ About Chapwood Investments ⬅️

Since it was it formed in 2005, Chapwood Investments has helped countless high-net-worth clients bring clarity and understanding to their portfolio management by targeting specific rates of return to meet their long-term needs.

Managing Partners Ed Butowsky and Kim Sams founded the firm after lengthy careers in the investment industry. Ed has been featured on several networks including Fox News, CNBC, ABC, ESPN, and more. He is viewed as a trusted advisor to serial entrepreneurs, successful business owners, and professional athletes.

Chapwood Investments was formed for one simple reason: To help clients understand and give perspective and knowledge of what they already have in their portfolios.

Most clients have no idea what it is that they own and what they should expect from what they own. So, Chapwood Investments was built to give people that knowledge. For more information, visit https://chapwoodinvestments.com/

➡️ Questions for Ed Butowsky or Chapwood Investments? ⬅️

If you have any comments or recommendations for subject matters on future videos you would like to see covered, please share them at ed@chapwoodinvestments.com or for Jordan McFarland at jordan@chapwoodinvestments.com.

➡️ Looking for more information? ⬅️

Consider adding Ed's book, Wealth Mismanagement, to your collection. It is available on Amazon and Barnes & Noble. Visit https://edbutowskybook.com/ for more information.

And be sure to subscribe to the channel and visit us at ChapwoodInvestments.com for more investment and wealth management news and information.

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Chapwood Investments, LLC is an SEC Registered Investment Advisory Firm (SEC.gov). No mention, opinion, or omission of a particular security, index, derivative, or other instrument in this webcast or video constitutes an opinion on suitability of any security. The information and data in this video were obtained from sources deemed reliable. Their accuracy and completeness are not guaranteed. At any given time, principals at Chapwood Investments, LLC may or may not have a financial interest in any or all of the securities or instruments discussed in this webcast or video. The guests appearing on videos do not receive compensation or provide endorsements or testimonials. Past performance is not indicative of any future results.