Risk Management 3 pillars of balanced investment decision-making

Today, clear-headed decision-making is more important—and more difficult—than ever. Making strategic investment choices requires sifting through an abundance of financial news, market commentary, and technical data to find what may fit best within your portfolio. An investment philosophy is one of the most effective means of cutting through that noise, and your Truist Wealth advisor can help you determine your investment strategy—keeping you focused on long-term success and avoiding emotionally based decision-making.

An investment philosophy is a structured set of principles that help guide the building and management of a portfolio. But when it comes to reducing emotional reactions and filtering out irrelevant data to improve decision-making, no two investment philosophies take the same approach.

In this article, Truist Wealth co-chief investment officer, Oscarlyn Elder, and chief market strategist and co-chief investment officer, Keith Lerner, explain how our unique investment philosophy’s three core pillars—staying anchored, leading with evidence, and building portfolios with ideas that matter—provide a simple formula to help you filter out the noise of emotions and markets to make clearer, sharper financial decisions.

Emotion isn’t the only factor that an investment philosophy can help you control. In a world where so much data is instantly available at your fingertips, an investment philosophy can improve your ability to differentiate between good information and noise, helping you prioritize the data that should be driving your long-term investing decisions.

“With so much data out there, it’s hard to overstate the benefit of having a structured process for organizing and selecting relevant information,” says Elder. “A process-driven, evidence-based investment approach gives you and your advisor an actionable point of view for decision-making.”

Lerner identifies four key categories of information Truist Wealth advisors use to help isolate the signal from the noise:

1. Historical analysis compares current market circumstances and similar situations in years or decades past—giving you a better understanding of potential outcomes.
2. Business cycle overlays help you and your team decide whether an offensive or defensive approach is suitable based on whether the economy is in contraction or expansion.
3. Fundamental analysis strengthens your ability to spot opportunity and avoid risk by evaluating key metrics, such as valuations and earning trends, to better identify attractive investments.
4. Market signal monitoring helps investors stay aligned with primary market trends, filter out short-term noise, and capitalize on emotional extremes—such as fear and greed—that may present opportunities for gain or mitigation of risks.