What do you think the biggest threat to your future financial security is as a special risk FRS participant in the investment plan? Think it’s maybe market risk? How about inflation? Maybe it’s the threat of changing legislation? Now, where all those clearly are risks, I don’t think any of those are the big one you need to watch out for. It’s something much scarier.
I’ve been doing this for a long time—over 30 years. And after all that time and working with more investors than I can count, here’s what I absolutely know to be true. The biggest threat to most investors’ success and the biggest obstacle to them having a favorable lifelong investment experience is … themselves. You know it. That’s it.
It’s like, if I could show most people what the biggest obstacle is to them actually capturing the returns they should be able to capture in global capital markets, all I’d need to do is hold up a mirror because then they’d be looking right into the face of the person most likely to implode their plan.
Investing and watching your account balance rise or fall can be a highly emotional thing. And both sides of that spectrum are dangerous. We know that investors, as a group, tend to pull out of investments too soon when they don’t appear to be doing well, and they put more money into investments than they should when they are overperforming.
It's chasing returns and it’s just part of human nature. It’s how most of us are wired. But we also know that it’s a great way to have an investment account underperform its potential and provide something less than a favorable investment experience.
I think a lot of it is because many investors just don’t have a good or even a basic understanding of how markets really work. They don’t really have a clear, time-proven strategy that they know will get them to where they want to go.
We can help you with that. If you’d like a second opinion on your finances from someone who might see something that’ll help you get to where you want to be going, give us a call. It’s what we do.
Schedule a complimentary consultation with a fee-only financial planner to discuss your personal situation in more detail.