Fiscal Cliff? What Should an Investor Do?

Dec 30, 2012

Now that the election is over, investors are wondering what the future has in store for their portfolios. The reality is that while elections may have short term impacts on the markets, over the long run, the impact is minimal. A Free Market System is based on capitalism, which always finds a way to thrive.

A structured portfolio based on a long-term investment philosophy will be more efficient than active management if and when taxes increase. Your portfolio should rebalance if necessary, to ensure you maintain your expected risk tolerance level.

So what should you, as an investor do now?

Stay positive. Nothing beneficial has ever come out of being negative.

Get educated to break the investor’s dilemma.

Fear of the future leads to trying to find someone who can predict the future.

Since nobody can predict the future accurately, investors look to track record investing, which academically has proven to be disastrous.

Trying to find the right answers leads to information overload, which leads to frustration and emotion-based decisions.

Since we as humans gravitate toward pleasure and retreat from pain, we break the rules of prudent investing and sell investments that are doing poorly and buy what’s increased in value.

This, in turn, leads to performance losses, which leads to more fear of the future. The investor’s dilemma starts all over again in a never-ending cycle.

The best way to break the investor’s dilemma is to get some basic education.  This will not come from cable financial channels and traditional news.   You must tune out all the media hype of doom and gloom.  Learn the basic rules that are grounded in academic principles and you will be successful.  Own equities, Diversify and Rebalance!

Call us to find out when the date of the next educational session is and reserve your seat!

Your peace of mind is worth taking the time to become an informed consumer.

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