Distractions to your Investment Plan

If you read and listen to various newscasts, you'll be barraged by stories that either tell you or imply you take action regarding your investments. Here are some real examples:

• The stock market has been up over the last several years, is it time to sell?
• The DOW was down 300 points today and 401k accounts will take a plunge.
• Mutual funds you must own now.
• How to make $1 million dollars.
• Unemployment is at an all-time high and the businesses are suffering.
• The stock market is down XX% after the housing bubble popped.

These messages plant a seed in our minds to take some kind of action. They play on emotions and emotion is the enemy of investing. The media are about marketing; getting you to watch, listen or read. To achieve their mission, they want you emotionally involved. Emotion is never a basis for taking investment action. With the right strategy, none of this matters and taking action is not necessary or desirable.

The news is about news worthy events. By the time an investment topic is news worthy, you are too late. All the important aspects of the investment opportunity happened when it wasn’t newsworthy.

Another issue to consider is that when investments or markets are news worthy, the hucksters come out of the woodwork. Sales people want to capitalize on your new found knowledge and sell you the investment. Run the opposite direction.

Source:  Shane Ostrum, CFP

The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.

 

 The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville.  The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.