The markets have nearly rebounded to the historic highs reached in 2000, but investors haven’t forgotten the emotional devastation of the tech bubble burst and its aftermath. History shows us the markets will cycle down again eventually; we just don’t know precisely when. When that downturn comes, a financial plan, an investment strategy (how you get to the big picture) and a trusted financial counselor could make the difference between staying the course and bailing out too soon.
Researchers have found that the human brain wants to be happy and will in fact bend our perceptions of reality to that end. Faced with evidence that we’re made a mistake in judgment, our brain denies, rationalizes, blames and defends, because admitting mistakes takes a toll on our self esteem and makes us unhappy.
Faced with investment decisions, our brain goes looking for ways to support its quest for happiness. We envelope ourselves with information – from the media, from the stock ticker, from cocktail party conversations – and gather a sense of contentment that we have superior knowledge. We don’t. We have excess information.
That false sense of knowledge causes us to make an investment based on performance from the past – despite prospectus disclaimers warning us that past performance doesn’t promise future gain. We buy what’s popular – because our brain tells us that many people can’t be wrong. We resist selling investments when performance indicates we should – because we do not want to admit we were wrong. And we invest in stocks just because we know the name or, worse yet, because we work for the company.
If you have fallen victim to these financial errors in the past, now is the time to evaluate your financial strategy. That starts with a financial expert you can trust to be the voice of reason when you start to panic about your portfolio. That trusted advisor should be helping you develop a financial plan that starts with deciding your life goals, not just a target cost for your investments. Be truthful about your assets, your liabilities, your hopes and your fears so your advisor gets a comprehensive picture of what you hope to accomplish.
To put your plan into action, you need an investment plan that fits your time frame, money needs and risk tolerance. With your financial expert, decide which investment vehicles are most acceptable for your profile. That includes understanding what criteria or scenario should prompt you to sell an investment, hold it or purchase more.
When the inevitable occurs, and the markets retreat, do not look to the media, your friends or even the major indexes for your next move. Look to the financial plan and investment strategy you and your financial professional developed and evaluate if those should change in the current climate. Good markets will always, eventually, go bad. With careful planning and professional financial counsel, that doesn’t have to be the case with your portfolio.
i am searching for, http://tinyurl.com/dktx98. i have to find Commercial Debt Collection Agency.. Free reprint available from: When Good Markets Go Bad.
Related posts:
- Stock Markets For Beginners Part One
- Easy Going Or Neglectful
- Becoming Global
- Investment Banking- Managing Your Investment Portfolio
- Stock Markets 101 Part Two
- Investing In International Equities
- Choices For Investors
- Is Private Banking Right For You?
- Let A Forex Signal System Assist You To Develop Your Forex Trading Strategies
- How Debt Consolidation Loans Work
Tags: collection of debt, Debt, debt agencies, Debt Consolidation, finances, financial experts, Investing, investment strategy, media, stock, stock market