Your Big Advantage Over the Average Investor

Posted by John Charles Kernodle on October 27, 2015  /   Posted in Newsletter

Over the last few days, I suspect you were tempted to look at your investments. After all, you’re human, and it’s been a bit of a wild ride with the markets trying to decide where to settle. But here’s the thing. Even if you did peek, you know something that many other people don’t.

You know that your financial goals have very little to do with what’s happening in the market on any given day.

Instead of paying attention to the markets, you’re choosing to pay attention to your goals. Instead of trying to guess what the markets will do tomorrow, you’re focusing on the things within your control today.

That gives you a big advantage over the average investor.

Too many people put off dealing with their financial lives. They avoid looking at their retirement accounts. They ignore their credit card debt. They forget the power of compound interest.

I understand why. Even after spending years helping people with their money decisions, I can still see why it feels overwhelming. When I work with clients to help identify their goals, I’m asking questions that require thinking about their future selves. Who will you be in 10, 20, even 30 years?

These questions don’t always come with easy answers. But experience shows that asking these questions now can help people set financial goals they’ll actually stick with.

For instance, if you didn’t understand the true value of your assets and your debt, how will you ever know what you need to save to reach a future goal? And if you don’t know how much you need to save, then how can you know what investments best match your goals?

I know that thinking about money, let alone talking about it, can be a challenge for some people. But it’s so important to have these conversations and understand your true financial situation.

I love those moments as an advisor during a client meeting when I see people making the connection. After answering several questions and considering different options, they now know what goals matter most to them. They also know markets will go up AND down. But they have confidence that by sticking with their goals, they can feel confident about their ability to adapt as things change both in the world and in their lives.

Over the next few days, weeks, and probably months, there will continue to be headlines about what the markets are (or aren’t) doing. At times, the headlines will be really persuasive. If that happens, and you’re feeling tempted to react, I suggest reviewing your goals. Unless a particular headline happens to be one of your goals, stick with what you know will work in the long term.

I doubt very many people have set a goal to sell everything if the Chinese stock market takes a dip. However, based on what I’ve seen in the news the last few days, that’s how too many people are reacting. You know better, and with your financial goals in place, you can feel confident about the decisions you’re making for your financial future.


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