90% of our job is being your money psychologist.
Having a sound financial plan with the most appropriate investment solutions means nothing if you don’t stick with it. Media outlets pray on investor fear and greed which often causes emotional reactions to short term events. The four words that often cause the most damage to a financial plan are this time is different when it comes to financial market uncertainty and volatility. History has proven that you will always be more successful if you abide by four other words, this too shall pass.
Everyone needs financial advice. The best athletes have coaches, so why wouldn’t you have a financial coach? Even lawyers who are being sued don’t represent themselves in court. Doing nothing is still doing something, so do your best to ensure someone is making sure doing nothing is what is best for you.
The stock market doesn’t lose people’s money; people lose money in the stock market. If you were given a diversified portfolio of stocks 30 years ago and forgot about them, what do you think would have happened? Is it safe to say you would have a significant portfolio? Media fear mongering and concentrating on quarterly account statements often hurts us more than it helps us. Make sure you are accurately assessing the information you are receiving.
We like to help nice people. In fact, we only help nice people. We don’t have a minimum account size. If you don’t appreciate the value that your financial adviser is providing, then search for one you do value. Our clients are like family to us so we take the extra time to understand their needs.
Time horizons are a significant risk determinant in financial planning. Short term investments such as cash and term deposits are some of the safest holdings for money needed within one to two years due to their stability and liquidity. However they are some of the riskiest holdings for money that isn’t needed for seven to ten years or longer due to the tax implications on their (albeit very small) interest and how they are impacted by inflation. You are almost guaranteed to lose money (value) with cash over long periods of time. Think about what $100 can buy you today compared to 30 years ago! The inverse is true for long term investments such as blue-chip, dividend paying stocks and real estate. These are some of the safest holdings for money not needed for seven to ten years or longer due to their ability to best protect your purchasing power from the erosion of taxes and inflation. However they are some of the riskiest holdings for money that is needed in the short term due to their volatility and possible lack of liquidity.