These daily financial tips are designed to be short ideas covering different aspects of family and business finances. They are short pieces intended to provide information to enable individuals, families and businesses to make informed financial decisions. Not all tips will apply to every situation, but over the course of a year, most financial topics will be covered. Check in regularly and share with friends and associates.
As noted investment manager John Templeton once said: “ We should be greedy when people are fearful and fearful when people are greedy”. Investing is highly emotional. It is difficult not to be influenced by the barrage of media. Daily we get reports from all media regarding fluctuations in the stock market. I don’t know for sure what the stock market is going to do today, or tomorrow, but I can guarantee that it will either go up or it will go down.
Should daily stock market fluctuations worry me? Not as much as it does influence people. The reality is stock investments should only form only a part of individuals investment holdings which should also include bonds and cash. Not all stocks respond in the same way to market fluctuations (some increase and some decrease). Investing should also be viewed with a longer-term perspective so daily fluctuations won’t have the same degree of impact as longer term trends will. Daily market fluctuations should be put into these perspectives and not viewed in isolation.
No one likes to lose money. Greed is a highly motivating human trait. It also motivates us to make irrational decisions. It is critical to put daily market and short-term fluctuations into longer term perspectives and into the perspective of your individual financial plan. As the old investment adage goes: “Buy low, and sell high”. All too often fear (another human emotion) gets the better part of judgement and individuals will liquidate or sell some investment holdings during market down swings and purchase/buy during market upswings – the opposite of basic investment theory.
Having an investment advisor helps moderate emotional investment decisions which may have long term investment consequences. An investment advisor serves as a voice of reason in making investment decisions. Studies have demonstrated (even during significant market down turns) that staying invested over the long term over market increases and decreases has longer term benefits than trying to time market swings. The average investor does not have either the time nor sufficient information to accurately time investment purchases.
Another strategy that has proven to have long term investment benefits is the concept of Dollar Cost Averaging or making monthly investment purchase. By having a disciplined monthly investment strategy, you can decrease your long-term average purchasing costs. This will be discussed further in another blog post.
A good practice is to regularly review your investment statements to ensure your longer term goals are being met. If market conditions are causing you undue anxiety or sleepless nights, then perhaps your asset mix and holdings are not appropriate for your goals and family situation. Everyone’s risk tolerance or comfort with market fluctuations is different, ensure your investment strategies are appropriate for your situation. Don’t let greed get the better of you.
Share these ideas with friends and family and come back to check out daily financial tips and ideas. If there are subjects you wish covered or questions, please email me and I’ll include them in future posts.

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