Investment Peace of Mind-What is it? Well before we get to that, let’s talk about what it’s not:
It’s not speculating and gambling with your financial future.
It’s not a get rich quick scheme.
It’s not emotional knee jerk reactions to media hype.
It’s not being seduced by the financial markets.
It’s not hyperactive buying and selling.
It’s not attempting to predict market highs and lows. (market timing)
It’s not basing your future on what’s happened in the past. (past performance)
When investors allow themselves to be largely swayed by instinct, emotion and the media, the result is rarely a well-constructed portfolio specifically designed to achieve the greatest return with the least amount of risk. Instead it is a haphazard portfolio that leaves its owner uncertain and afraid.
“October is one of the most dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”
So then, what is this elusive peace of mind and how does one attain it?
Peace of Mind:
Is to Take control of your financial future.
Is an increased level of consciousness about your investments.
Is knowing what you’re doing and why.
Is basing your investment decisions on logic, reason and intelligence.
Is replacing negative thoughts with positive ones.
Let’s change gears for a moment. If I were to ask you what two things you would need to do to lose weight? What would you say? I think we all know it’s: 1.) Eat less and, 2.) Exercise more. The point is even when we know the simple rules, we often don’t follow them. Logic is often overruled by instincts and emotions. If we all applied the two simple strategies for weight control, no one would need volumes of books or support groups to stay thin.
So how does this apply to investing, and more so, attaining Peace of Mind? If I were to ask what are the Three Rules of Investing? How would you reply? Again, remember keep it simple. Ok, well first of all we need to invest. So rule number one is 1.) Own equities. When acquiring equities what should we do? That’s right! Rule number two is 2.) Buy low and Sell high. Now, within those equity investments how should we position ourselves? Certainly we don’t want all our eggs in one basket, that’s rule number three 3.) Diversification, spread your investments across broad asset classes to reduce your level of risk.
If everyone was able to consistently implement these three simple rules of prudent investing they would rarely lose money. Sounds simple. Have you ever heard the saying “You can’t see the forest through the trees”? It means your so close you can’t see the big picture! It applies to your investments by allowing your innate emotions and instincts to over-rule logic, reason and intelligence. A Financial Coach, will educate you about how the market works, to reinforce your “logic” and the sound principles of your investment philosophy, to provide a sense of discipline and support your conscious mind. Contact our office at 989-269-9231 or e-mail us for a No Charge/No Obligation consultation to create Peace of Mind for yourself and your family concerning your financial future.
Simplify and Succeed!