George Washington Investment Strategy

I call it the Ed Mendlowitz George Washington Investment Strategy. George Washington basically fought the American Revolution not to win, but to not lose. However, this is not about George Washington but about a current investment strategy that I would like to suggest.

The idea is not to grow your investments an excessive amount, but rather to not lose.

A lot of investors have sufficient assets and cash flow to provide for their financial security completely and fully for the rest of their and, if married, their spouse’s lives. Those are who I am addressing. This group should not tax unnecessary risks. If you are not fully secure, then this is not for you, and there are other strategies you should follow.

People with sufficient assets and cash flow should evaluate their situation and determine why they place themselves at a risk position where they could possibly lose some of what they have and then not be in that secure position. I have a two-question “test” you can ask yourself.

How you answer these questions should guide you with your investment risks.

Here is a simple illustration. Assume your investments total $1,000,000 (but you can apply any amount you have to this illustration). If your investments doubled, you would have $2,000,000. With that extra $1,000,000, would your lifestyle significantly change? For most people, their lifestyle would not. Now assume that same $1,000,000, but you lost half of it and you are left with $500,000. With that shortage of $500,000, would your lifestyle significantly change? For most people, it would. Let your responses guide you with your investment risks.

There are plenty of ways to invest in a careful manner with minimum risk but with some growth. Note that risks are not limited to the investments or cash flow growing or falling, but also external happenings that cannot be controlled by you, such as inflation, a pandemic, your longevity and health and possibly the financial situation of people you care about that might need your help.

Investing is not easy and requires decisions involving many intertwined actions. Investing requires your attention AND for you to be clear about your situation, plans and goals. If you are fortunate to be in a good position, then good for you, and do not put yourself at unnecessary risk— Copy George Washington’s lead. Don’t invest to win, but invest to not lose.