In this show Jason and Alex answer questions from listeners. They invite listeners to send their questions to email@example.com or call 877-707-8889. The goal of Financial Detox is to provide consumers with access to quality and complimentary financial education.Alex offers sage advice to listeners who have a relationship with a financial advisor: Do not hesitate to ask the genuine questions that are on your mind.He then shares a listener question that has been on many minds: “Considering the upcoming election, what is the plan if things tank?” Jason importantly breaks the question down into 2 parts. First, he educates listeners with the fact that election year outcomes are not correlated to stock market performance. It is impossible to predict how the market is going to perform according to which party in office. Historically the data shows no correlation. Second, the Financial Detox team’s plan is to stick to the long-term financial plan and investment strategy already in place. A common is mistake investors make is changing their investment plan according to the news, events, and hype out there. Alex points out fear and greed naturally, as human beings, cause people to make significant investment mistakes. Jason stresses that investors should take action on a regular basis, as needed, according to an investment philosophy; not in reaction to events. For example, investors should continue to re-balance the amount in each investment according to a target amount.They share a second listener question, which is similar to the first: “Why shouldn’t I make tactical changes to a portfolio?” Dimensional Funds, a respected provider of investment research, uses a metaphor to effectively answer this question. They point out the similarities between making tactical changes in a portfolio and betting on sports; making tactical investment changes in response to news is like betting. Each tactical decision and sports bet take quite a bit of stress, energy and luck; imagine trying to keep repeating that over time. Jason stresses the importance of having a portfolio and an investment philosophy that gets you through good times and bad. Some tactical aspects, such as considering themes like the technology revolution, should be included when creating a portfolio. However, the tactical aspects should not be driven by events; they should be driven by investment philosophy.Jason shares the importance of first creating a financial plan that shows what rate of return need is needed to meet ones’ goals. Only after that is done can an investment strategy be properly created.Alex offers a pressure-free and complimentary video meeting to listeners who are stressed and looking for help in these times of global economic turmoil. Jason cautions that there are huge differences in quality of financial advice; always get second opinions because there are good advisors and bad advisors out there.
In this show you will learn about:
- Why investors should not change their investment strategy in response to news and events
- How election year outcomes are not correlated to stock market performance
- Tactical changes that are good for investors to make and which should be avoided
- The importance of seeking a second opinion when hiring a professional for financial advice or managing a portfolio on your own.