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Tuesday: Return Driven Strategy FROM THE DESK OF MILES EVERSON: Hello! We’re thrilled to talk about another investing insight in today’s “The Independent Investor.” Every Wednesday, we publish articles about investing because we want to help you achieve true financial freedom. For today’s issue, we’ll be sharing tips that will allow you to make better investment decisions. Read on to know why adopting a flexible investment strategy will help prepare you for an unpredictable investment climate. CEO, MBO Partners Chairman of the Advisory Board, The I Institute

Find out what the “Birmingham screwdriver” can teach you about investing! Are you familiar with the term, “Birmingham screwdriver?” This is a British slang term for a hammer, but it also has a deeper meaning. It implies people from Birmingham, England often use force to resolve a difficult situation even though a delicate approach is enough. Simply said, the “Birmingham screwdriver” idiom refers to the act of using the same tool or strategy in addressing different problems. Folks from Birmingham aren’t the only ones doing this. Nowadays, almost everyone is guilty of doing this as well. Why? Too often, people feel compelled to stick to a strategy that’s brought them satisfactory results in the past. However, just because the tactic has worked numerous times in the past does not mean it will continue to do so in the future. Take the National Basketball Association (NBA) as an example. From 2000 to 2014, 2-pointers comprised the scoring of most NBA teams. Seldom did teams or players shoot from the 3-point line. The reason for this? A lot of coaches believed the 3-pointer wasn’t an efficient shot. Even though it was more valuable in terms of scoring output, it was a difficult shot to make. In fact, during that time period, NBA ball clubs only attempted around 17 3-point shots per game. However, at the start of 2015, teams started taking more 3-pointers. Since then, over 30 3-point shots have been attempted per basketball game, as teams like the Miami Heat, Golden State Warriors, and Houston Rockets used these shots to overwhelm and outscore their opponents who relied on traditional scoring methods. The coaching staff of those teams understood they had to come up with another strategy to win more games during the NBA season. Because of this development, NBA teams had to slowly integrate the 3-pointer in their respective game plans. Those who resisted the trend struggled to find success. — The anecdote above tells us that in any industry or field, changes in how things are done are bound to happen. Those who can’t or simply refuse to adapt will be left behind. This same concept applies to the investment world too. As an investor, you cannot rely on just one tool or strategy to make investment decisions. The markets are constantly changing, and using the same tactic repeatedly could prevent you from boosting your portfolio and growing your wealth. So, how can you adapt in an ever-changing investment climate? For starters, develop the habit of conducting a thorough review of your past trades. Paying attention to your past actions will enable you to analyze your investment strategy better. Aside from reviews, carefully study the balance sheets of the companies you’ve bought into or the ones you plan to invest in. This will allow you to identify the characteristics of high-performing stocks. Lastly, pay close attention to market movements. This will help you identify the trends that can significantly affect the values of stocks. Equipping yourself with these kinds of knowledge will allow you to make necessary adjustments to your investment strategy. The tips we’ve given you are meant to help you develop and adopt a flexible mindset in investing. As an investor, one of the traits you must have is ADAPTABILITY. If you can adjust your investment strategy whenever it’s necessary, you’ll be setting yourself up for years of success. Besides, being able to adapt to any market condition is the closest you can get to becoming “bulletproof” in today’s dynamic investment climate. Hope you’ve found this week’s insights interesting and helpful. Follow us on LinkedIn.     Stay tuned for next Wednesday’s The Independent Investor! Professor Joel Litman, Chairman and CEO of Valens Research, has an internal program he conducts for the members of his firm: Speak on the Shoulders of Giants. Learn more about this public speaking strategy that you can also apply in your investing strategies in next week’s article!