We all enjoy great experiences. When you think about some of your favorite, typically they are going to include some type of service that helped create that unforgettable experience. There are occurrences in our daily lives that keep us going back to the same places … the grocery store, gas station, coffee shop.
Then there are decisions that we feel are more important and take more time to evaluate what is going to give us the experience we are looking for.
I recently started to do more traveling and can definitely pick out areas that make my travel and stay a memorable or forgettable experience. The airline, resort or hotel, and restaurants all play a major role. Most of the time, the people serving you at those places are going to play a major role in whether you consider your experience a pleasant or forgettable one.
So whether you are choosing a vacation destination, your doctor, dentist or mechanic, you tend to lean in the direction of great service to make your experience the best it can be.
In my profession, there are many different areas to add value to our clients. One of those areas, and probably one of the most common reasons clients start to look for an adviser, is when they need help with their investments. So without getting into everything that leads to a great overall experience with your adviser, let’s take a look at investments and what you can do as an investor to help create a positive and memorable experience.
Don’t try to outguess the market; let it work for you
Everyone understands the golden rule of investing is to buy low and sell high. What we don’t know for sure is when are these lows and highs? After consecutive days of decline, is the market going to continue to correct or turn in the other direction?
No one ever knows for sure, so take the guesswork out of your thought process and just let the market work. Over the course of time, long-term investors will most likely profit on their initial investment. Trying to time the market means having to be right twice, when to get out and when to get back in.
Resist chasing past performance
Past performance is one piece of factual information we have when looking where to invest. However, it is not always the best indicator of how investments will perform going forward.
Past performance does not guarantee future results. It simply provides us with information on how investments reacted to the different economic events during a period of time. There is very little chance that the next 20 years will look exactly like the past 20 years, so why expect performance to react the same way?
Practice smart diversification
Everyone has heard the word diversification a million times in the investment conversation. So why do you want to be diversified, and what do you do to make sure your portfolio has the proper diversification?
Well for starters, diversification helps reduce your risk by spreading your assets into more sectors. You may also consider taking this a step further and broadening your investment universe outside of our market and get some pieces of the global market as well. Our S&P 500 is made up of one country and 500 stocks. In comparison, the Global Market Index MSCI comprises 46 countries and 8,716 stocks.
We are all aware that we live in a world where our lives are affected by everything around the globe, and our investments are no different. You never know which segments are going to outperform from year to year, so by holding a globally diversified portfolio, you are positioning yourself to help reap returns wherever they may occur. Diversification does not guarantee positive results. Loss, including loss of principal may occur.
Manage your emotions and look beyond the headlines
Many people struggle to keep their emotions separate from their investments and therefore their return typically struggles as well. The markets are going to go up and down and the media is going to report on that. It is their job to create ratings, and they do that with headlines and stories that grab attention.
Reacting to media reports in a volatile market may lead to poor investment decisions at the worst times. Whether the media is creating anxiety about the future or commenting on the latest investment fad, stay the course and be disciplined, maintaining your long-term perspective.
In conclusion, focus on what you can control. Your financial adviser can help create a plan tailored to your personal needs and future goals. He/she will keep you focused on what actions may add value and lead to a better investment experience. - greenbaypressgazette
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