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hews
V
iews
BY RICHARD CHEW
Photo Credit Alireza Ahmadi
Financial Optimism or Pessimism?
What You Should Know About Your Future Investments
ovember represents
another month of a
beautiful Fall; the
anticipation of the holiday season and Turkey Day is right around the corner. My goal is always to be topical when sharing financial lifestyle tips and this month I have more for you to feast on.
Yes, it’s been a painful year for many investors, but focusing on the long term and implementing constructive actions can help weather the turbulence that can affect your Financial Lifestyle.
Many investors are understandably frustrated by a miserable year in which stocks are in a bear market and bonds have provided no relief. It is hard not to be pessimistic given the long list of concerns that dominate the market outlook – most notably inflation, central bank policy, our current mid-term election cycle and war in Ukraine. Despite this painful year for investors, it is important to maintain a long-term perspective while taking constructive actions that will help in navigating a down market.
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1. Use an Appropriate Frame of Reference When Evaluating Investments. Investors frequently compare their holdings to the S&P 500 Index, which is not always the appropriate comparative index for an investment strategy. For example, investments outside the U.S., in small-company stocks or in value stocks should be compared to a more relevant benchmark for the investment universe or style.
Many investors also are too quick to embrace short-term success or punish short-term failure. I always advise our clients to embrace patience in equal amounts and having a plan that is short, medium, and long range is more powerful and a lot less stressful.