The below note is something I found and wanted to share. For my clients and others who have a trusted professional giving guidance-thank you. If you are reading this and currently handle your own investments, or know someone who is a DIY’er, feel free to share. These long bull markets bring confidence that can quickly turn.
I would like to thank you for the fundamental financial decision you have made: the decision to invest with guidance and input from a professional.
Congratulate yourself, for you have decided to avoid a “do it yourself” approach.
Millions of people try DIY investing, with one goal in mind: finding stocks with upside. That must be the key to getting rich, right?
Not quite. These investors often get frustrated, angry, and depressed instead of rich, because they mistake buying and selling individual stocks for an investing strategy. When short-term volatility strikes, they get hurt, and some become so disenchanted that they bail out of equities entirely.
True investing is about adopting a strategy to pursue specific objectives, not making short-run decisions on this or that company. True investing also considers risk: how much might be too much, how much might be acceptable. True investing is also about diversification: owning much more than a handful of stocks, and recognizing that “hot” companies or sectors can quickly turn cold.
As Morningstar recently noted, the broad U.S. stock market gained an average of 15.2% per year during 2016-20. This is no guarantee of future performance, of course, but it speaks to the market’s multi-year potential. That 15.2% average annual advance stands even with the fall stocks took in early 2020.1
So, I thank you for sticking with a long-range strategy, and your choice to invest and pursue your objectives with my help. If any thoughts or questions are on your mind at the moment, feel free to call me or email me.
This material was prepared by MarketingPro, Inc. for use by Kelli Young.
Investment advisory services are offered through Golden State Equity Partners, LLC (“GSEP”), an investment adviser registered with the U.S. Securities and Exchange Commission. Longevity Wealth is a DBA of GSEP. CA Insurance Lic# OH03261
1 – Traders Insight, March 4, 2021
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The S&P 500 Composite Index is an unmanaged group of securities considered to be representative of the stock market in general. Index performance is not indicative of the past performance of a particular investment. Past performance does not guarantee future results. Individuals cannot invest directly in an index.
Diversification and asset allocation are approaches to help manage investment risk. Diversification and asset allocation does not guarantee against investment loss.
Sector investing tends to be more volatile than an investment strategy that is diversified across many sectors and companies. Sector investing also is subject to the additional risks that are associated with its particular industry. Sector investing can be adversely affected by political, regulatory, market, or economic developments.