What to Focus on when investing for 20-30 years into the Future ?

Just to be clear the reality is that no one knows how the market will perform from day to day, month to month, or even year to year. That is why it is important to take a long-term approach to investing, so that you can handle the volatility when it shows up. When it comes to investing, the best method to succeed is to hold tight for the long-term. Instead of making abrupt changes or trying to pivot based upon the latest headlines or stock market predictions. Most investors would be better off making an appointment with their Financial Advisor at the beginning of the year to review their overall strategy and risk tolerance level. Setup a strategic approach with your portfolio, which means setting an appropriate diversified asset allocation and taking the long-term view. For clarification, why does taking the long-term approach matter? Mainly, because investors who are overly focused on short-term market movements usually act impulsively. For example, during the last quarter of 2018 the stock market was down 20 percent, which frightened investors about how 2019 would look. In contrast, at the end of 2019, the S&P 500 was up greater than 30 percent. Those who sold as opposed to staying put with a diversified asset allocation process which you setup with your financial advisor missed out on a great year. It is important that you keep your investment expectations realistic when the market is doing great and also when your in a 20 percent correction. Just to be clear, the returns we saw in 2019 were a gift and are not the norm and are highly unlikely to repeat itself on a regular basis. In other words, 20 percent or higher returns are not not something that prudent investors should expect. For that reason, we believe it is important for investors to take a mental inventory review of their past investment decisions both good and bad.Regardless of whether the market is up or down, the long-term investment approach should largely remain unchanged. There are numerous so called experts out there waiting to tell you what the market will do in the immediate future, but we have found that their predictions mean very little for the outcome. That is why it's important to take the long-term view when your investing, so you can wait out the volatility rather than trying to get one step ahead of short-term moves in either direction. Eventually, you want to put yourself in a position where you are able to endure the storms. Also, get prepared for short-term market swings with confidence and the ability to remain calm. Many of the factors that have driven the long-term performance for equities remain intact and for what it's worth the Dow Jones Industrial average is now about 27,000. We suggest taking the long-term approach because it is a proven way to financial success. At Verducci Asset Management, we focus on constructing durable portfolios that ensure our clients maintain their asset allocations, throughout the market cycle, especially during the stressful volatile times when it matters the most. We have been buying and investing in financially sound companies with strong balance sheets that can handle tough times. We look at the quality of a business and it's management team. We usually want to invest in companies we know and understand with people who are honest and capable.Our wealth management process is centered around asset allocation and portfolio construction, which research has shown to be the largest contributer for successful long-term portfolio returns. Our usual wealth management process involves comparing the risks vs the rewards of many different asset classses for diversification. Our goal is to build and maintain durable portfolio's which are suited for bull-markets as well as bear-markets over the long-term. We are defensive,long-term investors. When we purchase securities we are seeking high-quality businesses that are run by capable CEO'S that are selling at reasonable valuations. Some attributes of high-quality businesses are those that which generate high returns on invested capital and that achieve consistent high-rates of intrinsic growth. Our individual equity portfolio's offer sufficient diversification to minimize risk while still enabling our best investment ideas to have an impact on our overall returns.Over the long run, the outcome from an equity investment will ultimately be determined by the company's execution of the business. The final procedure thhat we use to execute our wealth management process is a disciplined and thoughtful constructed process of analysis, execution, and a 28-point recipe that we have used for decades in selecting individual securities and constantly monitoring the portfolio.Lastly, your willingness to bear risk can be more difficult to wrap your head around it, particularly in the midst of a 10-year-long bull market. At times like these, it is important for clients to remember that the world of investing will not always be peaches and cream as it is now. One of our primary objectives is to set-up an appropriate asset allocation so that clients will have the conviction to stay invested throughout the stock market cycle. Having gone through this experience 3-4 times let me tell you it can be extremely nerve racking especially when your account value declines 40-50% in a year. But, the silver lining with this experience is that you know that the Fed and the government will eventually fix the problem. Probably the fastest and most severe decline was on a Monday in 1987 when the market fell 27 percent in a day. That is when i realized that the decline in the market was like a huge sale where quality companies were selling for 30-40 percent down with the same strong fundamentals. Looking back on that event it was the Fed who caused the problem by tightening rates too much. Even the Fed is not perfect sometimes they misread the data. Short-term volatility is, on the most fundamental basis, very unavoidable. As investors, our strength is the way we react to stock market volatility. We are strong advocates for staying disciplined through the volatile stretches inherent in the stock market. We look past short-term volatility, to help our clients to avoid behavioral/biasesthat could reduce returns and strive to build resilient portfolios that will win over the long-term.Thank you,John C.Verducci 111