2016 started off as an awful year for the market. I spoke with many financial advisors who were busy putting out fires most of January and February. This is unfortunate on two fronts (1) why investors get so concerned every time the market experiences volatility and (2) investors have not been properly coached effective and realistic expectations ahead of time – so they can react better in times of volatility.
Here we are 80 days into the new year and the S&P 500 is actually positive for the year. What happened to the doom and gloom? What happened to the pending recession and forecasts of things getting a lot worse? All that worry, all that speculation was for nothing. No different than August 2015, June 2015 and October 2014. For investors who sold earlier in the year, what are they to do now? If they have a plan, best to get back on track. If they don’t, best to get one. Because at this point, those who went to cash are no longer investors; they are now market timers. And market timing has proven to be a very unprofitable strategy for the majority of investors/speculators.
My Two Investment Tips
– The market has never not been volatile. If you are uncomfortable with volatility – which the market has always had and always will have – you have only two options (1) Get Out (2) Stop Looking.
– Turn off the financial media. Could you go 30 days without tuning into the financial media? How much worse off would you be? Or better yet, how much better off could you be? There are few things more destructive to a true investor than tuning into the short-term antics of the financial media.
MIND GAMES – Behavioral Coaching Content
Mind Games is launching April 1st!! Mind Games is behavioral coaching content (both video and written) that will be available only for financial advisors (at least initially). Advisors can subscribe to the content, and post on their website – for their clients and contacts to view.
Financial advisors who want to learn more about providing behavioral coaching for their clients, without having to re-invent the wheel, check out the brief video below.