The document discusses developing a personal investment philosophy by identifying one's true purpose for money, market beliefs, and investment strategy. It explains that having a clear investment philosophy based on understanding these principles can help alleviate common investor dilemmas and provide better financial outcomes through a structured, long-term approach. Developing an investment philosophy is presented as key to achieving financial goals with peace of mind.

1. CHOOSING YOUR INVESTMENT PHILOSOPHY

3. THE INVESTORS’ DILEMMA NOT ENOUGH MONEY NO PEACE OF MIND Definition Investors’ Dilemma : A cycle explaining the human side of investing. 7 Performance Losses 1 Fear of The Future 2 Forecast and Predict 3 Track- Record Investing 4 Information Overload 6 Breaking the Rules 5 Emotion- Based Decisions

6. THREE PRINCIPLES OF INVESTMENT PHILOSOPHY Definitions Philosophy : Theory of the principles underlying thought, knowledge, and conduct. Principle : A fundamental truth, law, or motivating force.

7. THREE PRINCIPLES PRINCIPLE 2 Your Market Belief + A statement of the most important value that you want to express through the way you use money. Identifying exactly what you believe about how the market works. The method you want to utilize as you create an investment portfolio for the future. Your guide for all future investing decision. = Your Personal Investment Philosophy PRINCIPLE 1 Your True Purpose for Money PRINCIPLE 3 Your Investment Strategy +

10. Two Views of Markets TWO VIEWS OF MARKETS Random price movements Predictable price movements MARKETS WORK The Markets Work hypothesis sees the market as random and unpredictable. Amazingly, the randomness of the market actually indicates that prices quickly and accurately reflect information. MARKETS FAIL The Markets Fail premise presumes that prices react to information slowly enough to allow some individuals to analyze and predict the future.

12. WHAT DO YOU THINK? It is time to make a choice. What makes most sense to you? MARKETS WORK MARKETS FAIL

17. ALIGNING YOUR STRATEGY WITH YOUR BELIEF Markets Work/Asset Class Investing Align: When you think that markets reflect all knowable and predictable information in current prices, then the best approach is to diversify, allocate assets, and invest for a lifetime. There is no need to be concerned with short-term, get-rich-quick schemes. You can disregard media hype and continuous stock market updates, knowing that with a buy and hold strategy, you will have the money you need to reach your goals. Confidence, Peace of Mind Markets Work/Speculative Investing Conflict: If you believe that markets set prices accurately, then attempting to pick stocks, time the market, or utilize track-record investing doesn’t make sense. You are going against your inherent trust in market efficiency when you try to take advantage of it for short-term results. Confusion, Anxiety Markets Fail/Asset Class Investing Conflict: If you believe that it is possible to identify mispricings in advance, then utilizing diversification and asset allocation over the long-term is inappropriate. Believing that markets fail to set prices accurately, it follows that you would want to stay connected to short-term market fluctuations and analyze information so that you can take advantage of the inefficiencies in the market. Despair, Resentment Markets Fail/Speculative Investing Align: If you presume that inefficiencies exist in the market, then you are practically compelled to apply speculative techniques to discover them. This means that you find a way to stay plugged into market analysis and learn about how to take advantage of the current mispricings in order to make money and decrease risk. Sense of Power, Control

18. BRINGING IT ALL TOGETHER PRINCIPLE 2 Your Market Belief + = Your Personal Investment Philosophy PRINCIPLE 1 Your True Purpose for Money PRINCIPLE 3 Your Investment Strategy +

20. THE 20 MUST-ANSWER QUESTIONS FOR YOUR JOURNEY TOWARD PEACE OF MIND Directions: Answer each question “Yes” or “No.” Your Answer must be 100% “Yes” to qualify as “Yes.”

21. QUESTION 1 Have you discovered your True Purpose for Money, that which is more important than money itself?

22. QUESTION 2 Are you invested in the Market?

23. QUESTION 3 Do you know how markets work?

24. QUESTION 4 Have you defined your Investment Philosophy?

25. QUESTION 5 Have you identified your personal risk tolerance?

26. QUESTION 6 Do you know how to measure diversification in your portfolio?

27. QUESTION 7 Do you consistently and predictably achieve market returns?

28. QUESTION 8 Have you measured the total amount of commissions and costs in your portfolio?

29. QUESTION 9 Do you know where you fall on the Markowitz Efficient Frontier?

30. QUESTION 10 When it comes to building your investment portfolio, do you know exactly what you are doing and why?

31. QUESTION 11 Are you working with a financial coach versus a financial planner?

32. QUESTION 12 Do you have a customized lifelong game plan to guide all of your investing and spending decisions?

33. QUESTION 13 Do you have an Investment Policy Statement?

34. QUESTION 14 Have you devised a clear-cut method for measuring the success or failure of your portfolio?

35. QUESTION 15 Do you fully understand the implications and applications of diversification in your portfolio?

36. QUESTION 16 Do you have a system to measure portfolio volatility?

37. QUESTION 17 Are you aware of the incentives brokerage firms and the financial community have when selling commission-based products?

38. QUESTION 18 Do you know the three warning signs that you are gambling and speculating with your money versus prudently investing it?

39. QUESTION 19 Can you identify the cultural messages and personal mind-sets about money that destroy your peace of mind?

40. QUESTION 20 Are you ready to shift your personal experience of money and investing from a scarcity mode to an abundance mode?

42. Learn more about what this means for you THE OPPORTUNITY

43. CONGRATULATIONS! You have developed your Personal Investment Philosophy and have learned how to put it to use.