When google searching “best investment advice”, it’s important to understand that no financial advisor in Austin, TX or elsewhere in the US has a crystal ball for how the market will perform. Suze Orman, Dave Ramsey, Jim Cramer and other CNBC “experts” haven’t proven the ability to predict market events either.
8. Separate Emotions From Investing
Many people struggle to separate their emotions from investing. Markets go up and down. Reacting to current market conditions may lead to making poor investment decisions.
While most investors hope to buy low and sell high, the 2008–2009 global market downturn offers an example of how the cycle of fear and greed can drive an investor’s reactive decisions. Some investors fled the market in early 2009, just before the rebound began. They locked in their losses and then experienced the stress of watching the markets climb.
Unfortunately, buying low and selling high is much harder than it sounds. I know investors that were still sitting on the sidelines waiting for a market crash or correction to get back into investing nearly a decade later. Investors tend to be their own worst enemy when experiencing investment losses.
Staying disciplined through rising and falling markets can pose a challenge, but it is crucial for long-term success. Working with a fee-only financial planner can help you stay focused on your long-term financial goals and offer investment advice guiding you through market turbulence.
This is part eight of a ten part series in pursuing a better investment experience.
Part One: Embrace Market Pricing
Part Two: Outguessing the Market – Don’t Try It!
Part Three: Past Performance – Don’t Chase It!
Part Four: Let Markets Work for You
Part Five: Consider the Drivers of Expected Returns
Part Six: Practice Smart Diversification
Part Seven: Market Timing – Avoid It!
Part Nine: Look Beyond Investment Headlines
Part Ten: Control Your Investment Focus
For More Information:
Investopedia: How to Avoid Emotional Investing
Austin, TX Investment Advice
Still have questions in how to pursue a better financial planning and investment experience? Meet with a fee-only financial planner regarding investment advice in Austin, TX or virtually online.