By Guy Hatcher
Most people want to be healthier and wealthier, but unfortunately, it’s just not that easy. As humans we are creatures of habit. Making permanent changes in our financial behavior is often surprisingly difficult, however NOT impossible to conquer. The good news is, when we begin to understand why we continue to make negative choices regarding our investments and our relationship to money, the results will begin to change. God’s word states, “Wisdom is a shelter as money is a shelter, but the advantage of knowledge is this: Wisdom preserves those who have it.” –Ecclesiastes 7:12 NIV
In relationship to money wisdom is the key to making the right decisions and achieving ultimate success with your investments. These ten strategies listed below will help you grow sound financial wisdom and jump start your investment strategy for the year.
1. Realize entertainment news is not advice. It may surprise you to know the financial media is in the entertainment business. Don’t be led astray by their message and compromise your long term focus and discipline ultimately making poor investment decisions.
2. Stop searching for tomorrow’s star money manager. There are no managers consistently out-performing the market.
3. Invest based on your plan, not a forecast—whether it is yours or anyone else’s.
Recognize, the urge to form an opinion will never go away, and choose not to act on it. No one can repeatedly and consistently predict the future.
4. Keep a long-term perspective and appropriately consider the investment horizon. Your portfolio will be aligned with the amount of risk you can accept in order to achieve the return you need to obtain your goals.
5. Continue to invest new capital. Work your plan understanding it’s about time “in” the market—and not just timing the market that helps you achieve your goals.
6. Adhere to your plan and continue to rebalance. Buy low and sell high instead of chasing the “hot” investment with big returns.
7. Diversify rather than focusing your portfolio on a few securities or asset classes. True diversification allows you to own the total market.
8. Make sure your portfolio is appropriate for your goals and objectives. Your goals are likely to change over time, therefore, a periodic review will help identify if should changes be necessary in your plan.
9. Manage your emotions by identifying your emotional triggers. Realize that greed and fear should be eliminated in order to achieve your long-term financial goals.
10. Maintain reasonable expenses by understanding management cost and how expenses minimize net returns. Ask for full disclosure of all fees, such as trading, brokerage, and manger fees.
Managing investments with wisdom allows an investor to have a long-term mindset and eliminate irrational decisions sabotaging the perfect financial plan. Utilizing sound investment principles and pursuing personal discipline will allow the opportunity for you to minimize your risk while receiving the return you desire.
I hear continuously from individuals who are not confident in managing their investments. If you find this statement true in your situation, you will benefit from having a “Financial Coach.” Our job is to keep you on track and moving toward recognizing your desired results. The relationship is similar to a successful athlete who relies upon a coach or trainer to help them reach their goals. Choosing the right team to help you navigate through the numerous available options and to make the best choices is paramount to your family’s future success.
May this year be prosperous and meaningful for you and your family and may God give to you freely the wisdom you richly deserve.
Guy Hatcher – known as The Legacy Guy – has spent his lifetime helping families plan their legacy. A Certified Financial Planner, Guy is a leader in the wealth management industry, affording him the opportunity to engage in over “10,000 Kitchen Table Conversations.” This real-life experience combined with Guy’s unique conversation style makes him a well-qualified and sought after financial advisor, family coach, and family counselor. His new book, Your Future Reflection: How to Leave a Legacy Beyond Money, is now available at Amazon.com. Follow him on twitter @guyhatcher. www.guyhatcher.com
- How To Embellish God’s Gift - February 26, 2021
- A Lesson About Chains of the Past In Billie The Elephant’s Life - February 17, 2021
- The Difference Between Conviction And Guilt - February 17, 2021