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Staying Healthy Through The Financial Flu Season

By newadmin / Published on Tuesday, 06 Feb 2018 17:09 PM / No Comments / 9 views


Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, January 31, 2018 in New York City. As the Federal Reserve left interest rates unchanged, the Dow closed closed 73 points higher on Wednesday afternoon, marking its best month since March 2016. (Photo by Drew Angerer/Getty Images)

As much as you want to avoid shaking hands with someone who just caught their sneeze in their palm, you need to avoid the talking heads, newsletter writers, and professional pundits who claim authority on what is best for your financial life. The facts are clear: the stock market was pretty darn good in 2017 and everyone loves an optimistic market; it feels great. However, what happened last year, last week, or yesterday has no bearing on where the markets are going tomorrow.

It feels good to watch your performance take your investments higher, but the impact of consistent growth is the creation of new bars set. This promotes the idea of creating daily benchmarks of success, instead of more appropriately ignoring short term performance.

You will typically find yourself in a pattern of unrealistically high expectations only to be disappointed when they’re not met – leading to a potentially damaging decision made based on emotions rather than facts.

Instead of focusing on the daily, weekly, or monthly growth of your portfolios, tie your goals to your portfolios based on time and ability to withstand market volatility.

If you are retiring in 20 years, create a portfolio that will withstand multiple business/market cycles and the variety of returns appropriate. The longer time you have, the more risk you may take. If one of your goals is to buy a new car or save for a down payment, and your time frame is in the next three to five years, you likely cannot afford to take the ups and downs (especially the downs) that come with a short time horizon. Each segment of your wealth should be germ-proofed by putting them in the appropriate slots.

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We’re in the middle of flu season and the stories continue unabated of grievous illness and death. The warnings are clear: wash your hands, stay away from those who are sick, and exercise due care and caution.

The last two words, “care and caution” are of particular importance because they apply to your financial life as well. Where coughing and sneezing are carriers of ill health, so are the news and media stories speculating outcomes and promoting products that might carry highly destructive risk.

Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, January 31, 2018 in New York City. As the Federal Reserve left interest rates unchanged, the Dow closed closed 73 points higher on Wednesday afternoon, marking its best month since March 2016. (Photo by Drew Angerer/Getty Images)

As much as you want to avoid shaking hands with someone who just caught their sneeze in their palm, you need to avoid the talking heads, newsletter writers, and professional pundits who claim authority on what is best for your financial life. The facts are clear: the stock market was pretty darn good in 2017 and everyone loves an optimistic market; it feels great. However, what happened last year, last week, or yesterday has no bearing on where the markets are going tomorrow.

It feels good to watch your performance take your investments higher, but the impact of consistent growth is the creation of new bars set. This promotes the idea of creating daily benchmarks of success, instead of more appropriately ignoring short term performance.

You will typically find yourself in a pattern of unrealistically high expectations only to be disappointed when they’re not met – leading to a potentially damaging decision made based on emotions rather than facts.

Instead of focusing on the daily, weekly, or monthly growth of your portfolios, tie your goals to your portfolios based on time and ability to withstand market volatility.

If you are retiring in 20 years, create a portfolio that will withstand multiple business/market cycles and the variety of returns appropriate. The longer time you have, the more risk you may take. If one of your goals is to buy a new car or save for a down payment, and your time frame is in the next three to five years, you likely cannot afford to take the ups and downs (especially the downs) that come with a short time horizon. Each segment of your wealth should be germ-proofed by putting them in the appropriate slots.

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