The Eclectic Me

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Investing is a Roller Coaster Ride

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Just this last weekend I was at our local fall fair and across Canada this is fair season. So, I thought I would take an example from the fairs to make this hopefully more interesting.

 

Market corrections

Every once in awhile we get corrections in the markets. Because people are very emotional about their money, they tend to overreact. When things are good, they may invest in riskier investments than they should and when things are bad they sell low and buy things that are likely too conservative. Investing is a roller coaster ride, but there are different levels of roller coasters. Do you like the big crazy ones made to scare the @$# out of you or are you happier with the children’s version.

 

Emotional behavior

When investing the first thing you need to learn about yourself is the type of investor you are. We all have emotional ties to our money, even though it should be intellectual it is not, being emotional is perfectly natural. So, to deal with reality you need someone who is trained to help you learn about yourself, your investing and behavioral style. This does not mean you won’t have a roller coaster ride, because you will! It does mean though that you will be ok with your ride. Notice I did not say happy, no one likes it when the market is down!

 

So what do you do?

First find an advisor who really cares and is willing to take the time to understand you. Don’t confuse a questionairre with what is necessary for an advisor to learn your investment personality. Much more is needed. Your advisor will look at your unique situation and personality so she/he can help you find strategies and products that are right for you. Your investing choices will also affect your ride, so how can you know what it right for you.

 

So many choices

With so many financial options out there, it can be difficult to figure out what’s right for you. For instance, it has been said that only about 20% of mutual funds are worth owning. That means 80% are being bought by someone or recommended by someone. It’s important to talk to a knowledgeable caring advisor who will put your interests first. This way they will – after learning about who you are - help you make informed and confident decisions about the products you need.

 

Your future

A good advisor will also help you put the pieces of your puzzle together. You need to do more than invest, you need to plan and prepare for your future. The world of finance is very complicated, even more so than many people think. If you have a plan with goals you can better understand the roller coaster ride you will take and realize corrections are not the end of the world, but part of the ride you need to take. You need to be able to understand how your ride will get you where you want to be and how long it should take.

 

Roller coasters

Finally it is important to realize that throughout your investment life you will take different roller coasters. The closer you are to your goal the easier the ride should be. Depending on your goals the ride may not be over, a goal like retirement should see you changing roller coasters. You’re probably going to want the kid’s roller coaster now, but maybe not. You will still require the services of a compentant advisor to help you make your money last as long as possible.

 

Conclusion

If you have an advisor talk to them about your concerns, if you don’t or want a second opinion to make sure you are on the right roller coaster, please feel free to contact me I would love to help you out! See the contact page to find out how to reach me. Thanks for reading, I hope this helped, and let me know what you think.