Dismantling the Confusion About Investing
The sheer breadth of information about money and investing makes the whole process confusing. How can you dismantle this information overload in order to make better investment decisions?
How to Start Investing Wisely
1. Tune Out the Noise
A good place to start is by realizing that most of the information you see and hear about money is either useless or doesn’t apply to your specific situation. In fact, useless might be too mild a word; much of the investment information you ingest each day can be dangerous to your financial health.
2. Develop a Financial Philosophy
Once you’ve successfully turned down the volume of money chatter, think about your personal money philosophy. If you can develop a clear philosophy, it becomes much easier to make ongoing financial decisions. Try to adopt a financial philosophy that both fits your current circumstances and something that you can stick with over time.
Your baseline financial philosophy should be beneficial when the current hot investment du jour comes across your screen. The financial world is quite adept at creating investment products that sound great, but end up being failures.
3. Don’t Overreact to the Market
Avoid reacting to short-term economic or market events. This is often the hardest step. Your long-term goals are unlikely to be accomplished by reacting; your aspirations may be better achieved by taking affirmative action steps toward these objectives. In most instances, reacting can hurt your chances of reaching your specific long-term goals.
4. Stay Vigilant
The aim of all of these efforts is to make your portfolio more resilient. Your particular investing philosophy and your specific financial plan provide the foundation for this shockproofing.
Dismantling the confusing investment landscape requires both ongoing conviction and rigor.
Remember that there’s always an emotional price to pay for premium investment returns. Normalize your emotions by fully understanding that markets move both up and down. This helps you to avoid being surprised.
Investing With Confidence
With your money philosophy and financial plan in place, the inherent confusion about investing should start to disappear. You will then have the tools in place to endure the inevitable market turndowns and otherwise worrisome random world events.
The importance of staying in your seat financially can’t be overemphasized. There’s no particular symmetry between positive and negative investment returns. While positive market years outnumber negative years, the down market periods attract more attention. Planning to stay invested in all types of market conditions helps you avoid reacting to media noise.
Ultimately, your long-term financial planning goals, not the current soundbite from the financial media, is what matters most.
None of this is easy. There are no shortcuts and many investors can’t withstand the emotional pull over time. If you find yourself confused or struggling to stay on course, revisit your philosophy and planning goals to help guide you through the maze. Start there. Ready for a real conversation?
Disclosure
Apollon Wealth Management, LLC dba J.E. Wilson (Apollon) is an investment advisor registered with the SEC. This document is intended for the exclusive use of clients or prospective clients of Apollon. Any dissemination or distribution is strictly prohibited. Information provided in this document is for informational and/or educational purposes only and is not, in any way, to be considered investment advice nor a recommendation of any investment product or service. Advice may only be provided after entering into an engagement agreement and providing Apollon with all requested background and account information. Please visit our website https://apollonwealthmanagement.com for other important disclosures.