Smarter than Wall Street – Part I

Some of you have attended presentations I have done entitled, Smarter than Wall Street. In this presentation, I talk about 4 myths of investing and 5 steps to manage your money like endowments. I will do a few posts on what to take away from this presentation, but today I am going to talk about emotions and investing. Everyone has heard or been told not to get emotionally attached to investing because then you do not make rational decisions… Easier said than done.

Media realizes this. They know that people make decisions based on fear and greed, and that is what sells advertising for them. When the markets are going up you will hear them talking about what is the hottest investment or how people should continue to buy. When the markets are going down, you will hear media talk about how the markets will continue to go down and give off a fearful message.

It is important to keep in mind that there is no one out there who holds financial media accountable to what they predict. If you tune in to CNBC, you will see guests make a variety of predictions. If you make enough predictions, someone will eventually be right.

As investors, we need to tune out this noise and have a plan in place to manage our investment objectively. I stress having a plan to clients. By having a plan, when your emotions get the best of you and you want to make an investment that may not be in your best interest you can refer back to that plan to keep you on track.

I hope that this post helps. As always, please give me your feedback on what you think of my blog. If you know of any friends, family or acquaintances that would benefit from this blog please let me know and I will put them on the distribution list. Cheers!

Disclosure: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which invest(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.