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3 Key Questions for Investors

Here We Go Again – Déjà Vu and Investing

By: Curt Stowers

Rarely is there anything new under the sun. And yet we are so, so easily seduced by those famous words:

  • “This time it is different.”

Danger, Will Robinson! Danger!!!! As George Santayana stated, “Those who do not learn history are doomed to repeat it.” This lesson is extremely important when it comes to investing.

The end of 2018 brought incredible volatility in the stock market. The phones started ringing. People started sweating. And the desire to make changes / find something “safe” was becoming more and more common. And, with January we saw the bounce back, and now people seem to have forgotten about December. HOWEVER, in December the pain was REAL, as the FEAR was real!

Fear comes from uncertainty and is something we are wired to experience. It WAS normal to feel a bit shaken at the end of last year. The key was to recognize this normalcy and avoid any crazy actions. That’s why having a written Investment Policy Strategy (IPS) is so important, as it will help you to navigate these tough times.

Nevertheless, there are going to be times when you encounter opportunities to modify your IPS vis-à-vis new investment tools. At those times, it is extremely helpful to consider these three questions:

  • What is this strategy claiming to provide that is not already in my portfolio?
  • If it is not in my portfolio, can I reasonably expect that including it or focusing on it will increase expected returns, reduce expected volatility, or help me achieve my investment goal?
  • Am I comfortable with the range of potential outcomes?

These three basic questions are priceless when it comes to avoiding mistakes in investing.

You can read more about this concept in this attached article.


Would You Like More Support?

  • Do you have a well-defined Investment Policy Strategy that is used to drive your investments in support of a comprehensive financial plan?

  • If not, would you like to partner with someone who is used to helping people get through these struggles and (then, with confidence) implement portfolio strategies in a systematic manner while focusing on your desired outcomes?

If so, feel free to send us an email or give us a call. We’d love to have the opportunity to help you find a bit more peace of mind when it comes to investing.

Enjoy the read and remember, it’s NOT about the money. It’s about how the money supports your goals!

Photo credit: Rawpixel on Unsplash

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F5 Financial is a fee-only wealth management firm with a holistic approach to financial planning, personal goals, and behavioral change. Through our F5 Process, we provide insight and tailored strategies that inspire and equip our clients to enjoy a life of significance and financial freedom.

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