If you were an investor back in 2008, I want you to take a moment to think about how you felt when you watched your portfolio’s performance during the Great Recession. If it went down 20, 30, or even 50%, how did that make you feel? I remember watching things go down more and more – and felt like my resolve was truly being tested.
However, capital markets don’t just change, even in the event of a recession. What can change, however, is how you can invest to achieve financial peace of mind. Many advisors will create portfolios that put you right at the brink of your risk tolerance – and we all know that this is a terrible strategy.
In today’s podcast, we dig into why people are so prone to reacting to market downturns, try and fail to time the markets, and cling to the past as they make future decisions. We’ll also share with you our systematized approach to take risk on and off the table as needed, no matter what the headlines read.
In today’s conversation, here’s what you’ll learn:
- Why most advisors build such risky portfolios – and why this often leads to their clients losing years of savings to market volatility.
- The reason so many smart people associate their current portfolios with past experiences – and why the biggest up years always come after the greatest negatives.
- Why long-term averages never change – and headline-based investing is almost always gambling.
- What we would say to someone who lost big in 2008 – and the unique circumstances that stopped so many people from benefiting from the subsequent market recovery.
- What you should think about instead of risk tolerance – and how to take comfort in volatility.
The content of this radio show is provided for informational purposes only and should not be considered investment advice or a recommendation to buy or sell any types of securities. Mr. Labrum and Intelligence Driven Advisers/Financial Detox are not responsible for the consequences of any decisions or actions taken as a result of information provided in this radio show and do not warrant or guarantee the accuracy or completeness of the information provided. The information discussed today reflects the views of Mr. Labrum and his guest(s) as of the date of this show and are subject to change without notice.Past performance is no guarantee of future results. Any forward looking statements or forecasts are based on assumptions and actual results may vary from any such statements or forecasts. No reliance should be placed on any statements or forecasts when making any investment decision. Accordingly, listeners should not rely solely on the information provided today in making any investment decision.There is a risk of loss from investing in securities, including the risk of loss of principal. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular investor’s financial situation or risk tolerance. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses.