All of us have said, ‘But it’s different this time’ ….’This Time This Expert is Right for Sure’……’I’m due’…..
A necessary lie is a rationalization to justify self-destructive behavior. Some additional examples:
- I will start my diet tomorrow…..
so I will pig out today.
- I’ll just gamble until I get even…..
so I will let it ride.
- This time I really do know what the market is going to do….
so it’s all right to speculate with my money.
Many of us believe that the ‘experts’ at the large wire house firms like Merrill Lynch, Morgan Stanley, Edward Jones, LPL, or even the large insurance companies can tell them what will happen next in the market. These Wall Street bullies use their large marketing and public relations budgets to convince investors that they have the answers. One only has to look at the 2008 crisis to realize that these bullies do not have the answers.
For example in 2008 some of the well-known and trusted investment firms went bankrupt and some needed the assistance of others to avoid bankruptcy. These bullies could not even manage their own investments. What chance do you have of succeeding with them?
The capital markets are random and unpredictable. There are thousands of variables that are constantly changing. This moving target makes it nearly impossible to predict the future. If some ‘expert’ does get it right it is a matter of luck and not skill.
Remember if you do not know two numbers you are speculating with your money. They are expected return and expected volatility (risk).
One important question you need to ask when you are deciding which adviser to work with. That is….will you agree to be a fiduciary to me?
Many times I analyze an investor’s portfolio and do not find an investment policy statement. This statement is your roadmap going forward. A fiduciary adviser will have that roadmap and work with you to remain disciplined to that roadmap. It is your blueprint to investment success.
To succeed long term in reaching your financial goals you must own equities….globally diversify….rebalance.