Here's what we think!
The 5 Investing Myths you need to know!
We think investors are overwhelmed by an avalanche of financial information – some of which may be wrong or misleading.
Here are five investing myths we think could derail you from a successful experience…
1. All financial advisors provide advice.
Actually, we believe some advisors may just be salespeople trying to sell something. And if you buy an investment product that is not suited for you, it could cause more harm than good.
2. You get what you pay for.
Really?! Just because you pay more for something does not make it better. And with investment products, a lower fee may actually be beneficial. Which is why we encourage people to review the research on active versus passive securities – it can be a an eye opener!
3. Asset allocation is all you need to worry about.
Sure, we agree asset allocation may be important, but it’s only a means to an end! Other variables, like implementation, tax allocation, etc, can be just as important!
4. You are in control.
When it comes to your own money, you simply can’t avoid the fear and greed that may influence your decisions. So, it makes sense to get an outside, objective opinion on your financial plan - but be careful to avoid conflicts of interest, and seek out advisors who answer to just you rather than their firm.
5. An investment portfolio can be created by just your “risk tolerance” profile.
Sure, we all like these touchy-feely risk tolerance questionnaires about how we might react if the market goes up or down, but we think there needs to be a logical connection between your specific goals and your investment portfolio. Which is why we also think computer-generated model portfolios meant for one and all, without customization, do not make a lot of sense.
Asset allocation does not ensure a profit or protect against a loss.