Looking Forward

After you have protected the basics and built a defense, its time to look forward. This entails:

Putting money away today to provision for tomorrow. Sounds easy so far, but where to put that money is the big question. Investing is long term and can be very difficult if swayed by emotion. One only need to spend an hour on CNBC (or similar) to witness the emotional swings possible in watching the events unfold minute by minute.

More to the point, each individual has to have a strategy that they are comfortable with and can stick to. Each person must invest according to their ability to take the ride. Investing is not a spectator sport, what’s good for one is not necessarily good for all.

In essence there are 3 ways to invest your money, you can be a saver, loaner, or owner. The basic return assumptions are as follows:

If given the choice, being an owner and investing in equity is the obvious route a long-term investor should take. However, even with these return assumptions known, there are several dominant factors that lead investors array. To name a few, volatility in the market, greed, and fear can overtake the investor and hamper their judgement. This is why having a prudent, long term investment plan which you can stick to and adjust at opportune times is so critical. Having time on your side allows you to be market agnostic. Riding the wave of volatility and allowing your investment pile to grown over time is what leads to better overall results.

One other very important point to discuss is “who” to invest with and “where’ to invest. The “who” are the people that will help determine and transact the investment. Professional investment advisors are regulated and licensed. Always ask for their credentials, licenses, and background history. It would seem obvious but know who you are investing with. Scammers abound, especially for the athlete and their celebrity. More on this topic will be covered under the “Evaluate your lineup” section. Corollary to this is the “where” is your money being invested. We feel strongly in using investments that are publicly traded, fully liquid, and easily explained. A professional advisor should take all the time you need to explain the “where” to your satisfaction.

Investments are subject to risk, including the loss of principal. Because investment return and principal value fluctuate, shares may be worth more or less than their original value. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results. Talk to your financial advisor before making any investing decisions.