What Is An Investors’ Number One Enemy?

Is it the conmen like Bernie Madoff or Reed Slatkin or Allen Stanford?

Or is it the insurance companies with their excessively high fees along with so many restrictions and limitations that the only ones to make money are the insurance companies and the agent?

English: Bernard Madoff's mugshot
English: Bernard Madoff’s mugshot (Photo credit: Wikipedia)

Or is it the Wall Street bullies who feed the fears of investors and facilitate the trades to the next ‘hot’ investment?

As an investor your number one enemy is yourself.

We are constantly bombarded with information that affects us emotionally. We receive information from

  • the media
  • the internet
  • Our neighbor(s)
  • Our co workers
  • and on and on….

The media is constantly explaining why the market is destined to go down. Or the next great fund manager who is can’t miss or the hottest asset right now. Of course, they exclaim that you must act now BEFORE the opportunity passes.

What they are asking you to believe is that they can predict the future.

The internet has information for any occasion. Whichever way you wish to see the financial world you can find ‘evidence’ on the internet to support your view. We all have biases as to what is the best way to invest our money.  Should I get out of the market? Of course, you can find evidence to support this. At the same time you can find evidence to support your view, if you believe the market is headed up.

The problem we have as investors is we allow all this often tainted information to affect us emotionally. Often we hear what we want to hear. We allow what we hear from friends and co-workers to determine how we will invest our money often our retirement money.

This is akin to gambling and speculating with our financial future.

Many times we hear how a friend or a friend of a friend was successful in a highly speculative investment and you immediately ask “Why not me?”. We allow the emotion of envy to guide us to some very destructive behavior. Keep in mind that there is zero correlation between someone’s ability to pick a winning investment and their ability to repeat in the future.

It was a matter of luck and not skill.

Remember the Wall Street bullies goal is to keep you trading, to keep you looking for the next get rich quick scheme. You need to decide if you want to remain victims or find a better way to invest for our long term financial future.

There is a scientific process backed by academic research to build a prudent portfolio designed specifically for you and your family.

Your goal from that point on is to remain disciplined. With one exception, we will lower your level of risk at different intervals as you age.

Because your emotions play a great role in the type of person you will be. You should find a fiduciary adviser to keep you focused on your long term goals.

Hire an investor coach and your financial goals can become a reality.

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