Wealth management firms vary in their investment philosophies. Often, whomever shouts the loudest gets theirs noticed. However, that doesn’t mean the latest strategy getting attention is best for you. While it’s great to have a variety of investing vehicles at your disposal, there’s no magic combination of mutual funds, ETFs, bonds, stocks or cryptocurrency that is guaranteed to produce strong results.
The investment strategy that’s best for you is the one you can stick to. I know, it’s not the sexiest plan. But a trendy plan with all the bells and whistles will typically be less successful than a boring one to which you’re loyal. Consistency is key.
It’s pretty common in our line of work to hear things like, “If I’d invested $10,000 in [insert stock name here], I’d have $137,000 today!” However, reality is much more unpredictable. Take Netflix, for example. If you’d invested $10,000 in NFLX on April 8, 2013, you would have had more than $120,000 on April 10, 2018. Would you have stuck with it through NFLX drops of 12, 18, 27 and even 36 percent? I wouldn’t have. Most people would have sold out in a panic after the first two.
As financial advisors, we get that fear of missing out (FOMO, as the kids say) is a real thing. It’s easy to get lured into the “what-ifs.” However, it’s better to miss out on the next big investment idea than miss out on retiring when you want. The best investment advice I can give is not a stock tip. And there’s no such thing as a guarantee. The best advice is to build a plan that supports your goals, invest accordingly and stick with it.
Blog by Peter Vitali, Wealth Advisor.
NOTE: Investments in individual sectors may be more volatile than investments that diversify across many industry sectors and companies. Certain sectors of the market may expose an investor to more risk than others. The rates of return shown above are purely hypothetical and do not represent the performance of any individual investment portfolio of investments. They are for illustrative purposes only and should not be used to predict future product performance. Specific rates of return, especially for extended time periods, will vary over time. There is also a higher degree of risk associated with investments that offer the potential for higher rates of return. You should consult with your representative before making any investment decision.
Category: Financial Service Team