I just returned from a short investment conference in Orlando. I’ve been reflecting on some of the conversations I’ve had over the last few weeks with clients, investment managers, colleagues and other advisors.
Ukraine has recently been the source of many of these questions and conversations. Everyone seems to want to know what the markets are going to do next. Lately when we think it should be down it’s up and the reverse. You can’t expect it to always make sense.
I’m sharing with you a great article in Kiplinger from July 2021 that I believe is appropriate for the times we are currently living in. When the article came out, we had experienced a significant drop in the market over just three days. Folks were wondering is this the start of something bigger?
The article will help you identify some of the behaviors you may be experiencing that could be harmful to your financial success. Your first impression may be that this is about the stock market. Although it is in part, it really applies to the strategies that we employ on the whole. Some of these strategies take time to employ and realize their successful completion.
We talk ourselves out of sound strategies or allow others to do the same. It’s likely they don’t understand all of the reasons behind those decisions and ultimately the expected end.
Here is a list of behaviors covered in the article that are not beneficial to seeing our strategies through. I’m only sharing the list. The article explains each of the behaviors. You may find it interesting to see if you exhibit any of these behaviors:
- Fear of Missing Out (FOMO)
- Overconfidence
- Preconceived Notions in an Echo Chamber
- Loss Aversion
- No Patience for Sitting Idly By
- Gamblers Fallacy
- Recency Bias
Read more in the Kiplinger article, The Psychology Behind Your Worst Investment Decisions. Which do you suffer from? If you’re unable to retrieve this article, let us know and we’ll send you a copy.
During times like these when the market trends aren’t clear, and the market is jittery, a strategy that employs some ‘safe’ money may give you greater peace. If we haven’t talked about potential options that may prevent you from suffering losses or positioning in a way to minimize losses, we should.
There are several strategies to consider depending on your goals and circumstances. Should we talk soon?
