Investing in Financial Markets is Never Easy

By Sue Stewart: GDipBus (Personal Financial Planning), CFPCM
Financial Adviser – Investments.

As an investor you’re forced to deal with constant uncertainty, volatility, fear, greed, and an endless stream of noise, especially through negative media. The only time investing feels easy is when you are looking in the rear view mirror.

One of the great investors Charlie Munger (recently deceased 99 year old legend at Berkshire Hathaway) is quoted with saying “ “if you’re not willing to react with equanimity to a market price decline of 50% two or three times a century, you’re not fit to be a common shareholder and you deserve the mediocre result you’re going to get compared to the people who do have the temperament who can be more philosophical about these market fluctuations.”

This is however much easier said than done, as the ability and willingness to take risk are not always equal for most investors. This is where tailoring a diversified investment portfolio to match your risk profile, tolerance and timeframes is essential.

Even with this done, investors are still likely to experience some very uncomfortable years amidst the good ones.  However, history has proven that if you hold your course, follow your Plan and stay invested through all markets, you will be positively rewarded for your patience and fortitude.

We absolutely appreciate this is much easier said than done, and research has continually shown, that investors that work with an adviser will achieve superior results from those who don’t, because they are much more likely to be supported in holding the course when the going gets tough.

If you are able to use negative markets to your advantage by adding extra funds when prices are low, then your benefits are even greater.

Real financial advice doesn’t try to scare you but rather turns complex topics into simple discussions and explanations. Real financial advice doesn’t offer predictions; it offers perspective. It shows you the pros and the cons, the costs and the benefits.