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Purposeful Investing

How do we transition from basic foundational investing to a more purposeful investment portfolio? In our opinion, this is an important evolution for investors as your portfolio becomes more personalized and meaningful. This core philosophy is best described as the intersection of foundational investment principles, financial planning, and behavioral finance.

Fundamentals of Purposeful Investing

Investments and Financial Planning Should Work Together

We find too many individuals are either focused on investments OR financial planning, while the truth is that they should work together. An investment portfolio should have a purpose, and what could be more purposeful than matching the goals derived from detailed financial planning to your household portfolio. Whether it be retirement income planning, legacy planning, or simply meaningful personal goals, your portfolio should be aligned to assist in achieving each one of them.

It's Not What You Make, It's What You Keep

If you enjoy paying taxes, you might as well skip to the next one. For investors in high tax brackets or sensitive to taxes in general, your portfolio should be designed and managed in such a way that helps to minimize them on an annual basis. This involves various strategies such as loss harvesting, asset location, low security turnover, wider rebalancing thresholds, and several others. Taxes can eat at investment returns if not managed correctly, and potentially make a down year even worse. It’s not how much you make; it’s how much you keep.

Check Your Emotions at the Door

 You don’t need to be a trained psychologist to know that humans are emotional beings. While that’s part of everyday life, it can be a major issue if uncontrolled when it comes to the financial part of life. Studies have repeatedly shown that investor overconfidence and emotional decisions can lead to financially catastrophic outcomes. We’re financial planners and wealth managers at heart but being a behavioral coach during both good and bad times is just as important.

Education, Transparency and Communication Solve Many Behavioral Issues

It’s been our experience that the anxiety caused by finances and investments stems from a lack of education, transparency and communication. We believe that its our job to educate our investors on markets and portfolios, be transparent with our positioning and changes, and to communicate on a frequent basis. In doing so, we believe our clients will be less anxious and more confident in all aspects of their financial plan and investment portfolios.

Please note, the information provided on this website is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs. The content on this website is not intended to provide tax, legal, or accounting advice, and you are advised to seek out qualified professionals that provide advice on these issues for your individual circumstances.

Diversified, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. Diversified only transacts business in states in which it is properly registered or is excluded or exempted from registration.  A copy of Diversified’s current written disclosure brochure which discusses, among other things, the firm’s business practices, services and fees, is available through the SEC’s website at: Diversified does not provide tax or legal advice and individuals should seek the advice of their own tax or legal advisors for specific information regarding their situations. Investments in securities involve risk, including the possible loss of principal. The information on this website is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.