November 2017

Counting Down the 5 Worst Financial Mistakes

Author: Brenda Blisk

Mistake Number #5: Failing to Ask for Help

People can be reluctant to ask for help when making important financial decisions. Effectively managing potentially complex finances takes skill. In a study conducted at Yale and Princeton, psychologists gave students questionnaires asking how they compare with their classmates in a variety of skills and tasks. For example, one question asked, “Are you a more skillful athlete than your average classmate?” The overwhelming majority of students responded that they are above-average athletes, drivers, dancers, students and so on. Obviously, not all of them can be above average, but their self-perception led them to believe it was so. This same issue of over-confidence exists among investors.

During the bull-market years of the dotcom era, it was easy for stockholders to delude themselves about their investing abilities when a few lucky stock picks quadrupled overnight. However, many of those same investors were burned in the bear market that followed, because they didn’t have the experience or skills to manage their wealth in a declining market.

Long-term investing entails having the skill to achieve returns in bull markets and the discipline to keep what you earn when markets decline.

Navigating the turbulent investing world of today requires wise management skills and commitment to a long-term, active investing strategy—and investing is just one part of the overall financial strategy. Getting good financial guidance may spare you the angst of costly errors or missed opportunities and may save you money in the long term.

Unfortunately, many professionals and executives say they are too busy to spend time on their finances. This decision, however, could be adversely affecting their ability to replace much-needed retirement income. According to a study by Putnam Investments, investors who work with a financial advisor are on track to replace 82 percent of their income in retirement. People who don’t work with a financial advisor are only projected to replace 56 percent of their pre-retirement income.

How a CFP® or financial advisor can help

One of the greatest potential benefits of professional financial management comes when markets are declining. We educate our clients on the opportunities that market turbulence sends our way and keep them focused on their long-term goals, not on short-term gyrations. As financial advisors, we spend our careers charting courses through turbulent markets and help achieve results for our clients. As professionals, it’s our job to stay on top of ever-shifting economic, financial, and legal issues so that our clients don’t have to.

Investors who recognize and the value of professional advice give themselves an advantage in pursuing their investment goals. Particularly in times of economic uncertainty, global political and market turbulence, we believe it is important to consider seeking the advice of an independent professional when investing. A long-term investment strategy requires a personalized plan and takes into account your current need and future needs, investment time, and a stomach for risk.

This helps to ensure that no matter what the markets are doing in the short-term, you know your investments are working towards your goals. It is critical that you develop the discipline to stick with your plan. This discipline is critical when markets are pulling back and investors’ fears get the better of them. While it is impossible to predict which direction markets will go, generally, each downside contains an upside opportunity elsewhere.

One of the most important benefits of working with a professional financial advisor is the confidence of knowing you have professionals monitoring the economy, the political scene and the financial markets. We want to assure you, we diligently research current trends and use all the analytical tools to help you make good, solid investment decisions. Above all, we want to help you relax and enjoy your life and your family, knowing there is an experienced vigilant hand at the tiller.

We believe successfully navigating the investing world of today requires training, prudent management, and commitment to a long-term, active investing strategy.

Investors who recognize and avoid this common mistake give themselves the potential to grow their wealth and work toward financial security for the future.

Stay tuned next month for “Mistake #4.”

Brenda Blisk, CFP®, is CEO of Blisk Financial Group and resident of Berkeley Hall. Blisk is named as one of Barron’s Top 1200 Financial Advisors for 2017. An investment professional since 1986, she enjoys assisting a select clientele in creating a life of significance.

“Partnering with a Financial Planner.” AMA. https://www.amainsure.com/research-reports/2017-financial-preparedness-resident-physicians/index.html?page=14 [Accessed May 20, 2017.]
The Role of Constructs in Psychological and Educational Measurement
Book by Henry I. Braun, Douglas N. Jackson, David E. Wiley; Lawrence Erlbaum Associates, 2002.

Spire Wealth Management, LLC is a Federally Registered Investment Advisory Firm. Securities offered through an affiliate, Spire Securities, LLC. Member FINRA/SIPC.

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