How often do you review your financial plan? Are you doing this alone or with a trusted advisor? If it has not been done regularly and with a financial advisor you might want to reconsider your strategy.
Like oxygen and water and we need money to live and thrive – to lead a rich life. Without an investment philosophy that is methodical and has a disciplined approach your supply of this vital resource could dry up.
Strengthen Your Financial Foundation
Much like the foundation of a high-rise building, your portfolio foundation must be built to take the shifts and shudders of an ever changing environment. You see, as your life evolves with all its twists and turns your financial plan will need to be adjusted to circumstances.
After all, no one’s life goes exactly according to plan. So why then do we assume that a financial plan only needs to be addressed once and then left as is for the remaining years? When your circumstances and needs change your money and financial planning should follow.
You are unique and deserve a unique financial plan
What Factors Influence a Personal Financial Plan
These are just a few of many:
- Duration or time horizon to invest
- Risk tolerance
- Sources of current and future income
- Projected cash requirements pre and post retirement
- Liquidity needs
- Emergency reserves
- Insurance coverages not required
Once you have established a properly diversified plan you should review it regularly to make sure it’s still on track. To safeguard your money, diversification is your first line of defense in a changing world.
By the way, did I mention I hate mutual funds? Most are expensive and have costs wrapped up in the fine print. This is just my opinion but I believe there is a is a better way.
Read my blog “Who Are You Paying” for more understanding on mutual fund expenses.
Are Your Financial Decisions Fear Based
Are you afraid? Be honest about this. Fear pops it’s head out feeding on historical events that have had disastrous consequences on retirement savings:
- Terrorism – We can’t control that one
- The three-year bear market of 2000-2003
- The real estate bubble – Yeah it’s coming back in a big way now
- Another brutal correction of 2007-2008 – If you sold then, you got burned
- Investors chasing hot investment sectors – The dot-com boom, community banks, real estate buy and flips, precious metals, ouch!
- Buying high and selling low
- Trying to time the market based on emotion
That probably covers most of you.
Beware of Investor’s Amnesia
As time moves on, people tend to forget what put their portfolio great pain. They return to greediness and begin to make the same mistakes. Remember Einstein’s definition of insanity? In this case, it looks something like –
They buy into investment sales pitches.
They start to chase the hot performing investment sectors, forgetting about proper diversification and setting themselves up to be hurt again.
There is no discipline, foundation or investment philosophy.
There is no clarity.
The result can be painful and then . . . . the memory comes back.
Why not work as hard on your money’s foundation as you did to earn the money?
Seek out a reputable financial advisor and research them. No, I am not talking about asking your neighbor. Talk to your prospective advisor’s clients. That’s a great start.
This information is not intended to give specific recommendations, investment, legal or tax advice. Advisory services offered through Nepsis Advisor Services, Inc.; an SEC Registered Investment Advisor.