Here are some common-sense principles that highlight our philosophy at Carr Wealth Management: 

 Risk and Return Are Related

Different forms of risk apply to various types of investments, but they all channel into the primary fear people have about investments – the risk of losing money. According to the risk-return tradeoff, invested money can render higher profits only if the investor accepts a higher possibility of losses. Earning market returns from capital assets such as stocks and bonds requires a certain level of risk-taking. My role as an investment advisor is to help clients manage investment risks. I do so by:
* Thoroughly understanding their financial situation, including retirement goals, tax situation, income needs, and estate planning wishes.
* Lower overall risks by utilizing sound diversification principles, which spread the risk of concentration to various asset classes.
* Help educate clients on the benefits of long-term investing with low-cost, well-diversified, and tax-efficient investments designed to earn long-term appreciation.

Lower Expenses Mean Higher Returns

 Lower investment expenses make a significant positive difference by directly increasing your net returns, and this impact grows substantially over time. Even minor percentage differences in fees can accumulate into tens or hundreds of thousands of dollars lost from your retirement or investment portfolio. To maximize long-term returns, investors should prioritize choosing lower-cost investment options, such as passively managed investments, index funds, or ETFs, and regularly monitor their fund's expense ratios. Our fee-only investment management services range from .80 to 1.20% per year.

Markets Are Efficient

We’ve been conditioned to believe that almost anything can be accomplished through effort and hard work. That may be true, but trying to outsmart the market isn’t one of those things. Because of the size of the market and the number of highly skilled investment professionals competing in the market, it’s impractical to think it’s possible to outsmart the market, and there’s overwhelming evidence to support that it’s not only impractical but also counterproductive. By harnessing the market’s power, we put its collective knowledge to work for us instead of against us.

Speculative Investment is a 50/50 proposition.

Speculation is a zero-sum game, meaning the amount of somebody’s gains will equal someone else’s losses. Success with this strategy depends on the 50/50 chance of being on the correct side of the transaction and overcoming the additional costs and possible taxes of each transaction. Disciplined investing takes advantage of the market’s natural process of rewarding investors with returns that match their level of risk tolerance. Typically, the longer the time horizon is, the greater the potential for favorable investment returns, as investors with long time horizons are more likely to withstand short-term market volatility.

Short-term investment strategies are transaction-oriented. Each transaction involves a buyer and a seller, both of whom believe they are acting in their best interest. Success in this type of investment depends on the 50/50 chance of being on the correct side of the transaction and, because of the additional costs, a less than 50/50 chance of actually making a profit. This approach is counterproductive, lacks discipline, and is indicative of a lack of a clear strategy or plan to help achieve objectives.

Diversification

Diversification in investing is a risk management strategy where you spread your investments across various asset classes, industries, sectors, and geographic regions to reduce the overall risk of your portfolio. The core idea, often summarized as "don't put all your eggs in one basket," is that if one investment performs poorly, other investments will offset those losses, leading to more stable, consistent returns over time. 

Fiduciary Relationship Should Be a Must, Not a Choice!

Always acting in the client's best interest is the duty of a professional Fiduciary. You would think it would apply to all individuals who make a living from managing others’ investments. But not all financial professionals are subject to the Fiduciary Rule, which means they legally can evade the “client’s best interests” part by substituting “suitable for the client.”

Complex Investments Usually Don’t Favor the Investor

Some Investments are meant to be sold, not bought. The more difficult it is to understand the investment, the more it is probably not in your best interests to purchase.