Being Smart With $$ - Financial Advisers Act Emotionally and Shouldn't

Financial advisers buy and sell at the wrong time based on emotion says legendary billionaire investor Ron Baron and he takes advantage of this and increases his purchases when they are panicking.  Don’t let your financial adviser manage your portfolio with emotion rather than rationality.  A proper long-term investment plan does not include panic selling. 

https://www.cnbc.com/2019/08/20/ron-baron-says-he-tripled-normal-stock-buys-during-recent-wild-swings.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

Larry Pike, CFA

Client Priority Financial Advisors LLC

Timing was the subject of an old Steve Martin joke where he said it is the basis of success in comedy.  Of course, in his bit he said the word all wrong with the accent on the second syllable as if it referred to an ancient Chinese dynasty.  If you get timing wrong in comedy, the joke doesn’t work.  If you get timing wrong in your portfolio, you lose money.  The best timing with investing involves not timing the market at all and staying invested in a proper allocation for your needs.  Most investors will find that their total time in the market is what matters in the long run and not when to dart in and out of it.  Some investors believe they can jump out of the stock market before a crash and avoid losses.  The problem here is that expected crashes often don’t come and then you are sitting out the market as it marches higher.  Then it is hard to get back in when you intended to avoid losses but instead lost money by sitting it out.  And if you do dump stocks and the market subsequently falls, the next hurdle is to figure out when to get back in.  Investors often make the mistake of expecting further declines and then miss all the upside.  The long-term trend for stocks is always higher as prices will reflect all the profits generated by global companies every year even though there will be corrections now and then.  Many have been predicting a crash for years and they have been punished by missing a 3-year return in large-cap stocks of over 13% annually!  In comedy, you have to get your timing right and in investing the best timing strategy is not to time the market at all.

Larry Pike, CFA
Client Priority Financial Advisors LLC
www.clientpriority.com