How can I go forward when I don't know which way I'm facing?Submitted by Alloy Silverstein Financial Services, Inc. on June 15th, 2014
How many times have you heard someone at a backyard party or family gathering bragging about that stock that made them big money? Conversely, you may even have insisted that you need to go to cash because the world is ending (we all remember early 2009) and of course cash, or gold, is what some guy on television said is the only way to survive. Well, you need to nod politely and then ignore the wizard of the barbecue and the guy on the tube. Why? Because they are not you. Nor do they know your situation. You have your own risk aversion or tolerance, your own bills and dependents, your own needs and wants, and your own financial plan. At least I hope that you have your own plan. The reality is that many people do not have a plan, yet that is the one thing that may keep you from making emotional and damaging financial decisions.
Keep in mind that a plan is not necessarily a restriction on your ability to take a little extra risk. It can actually allow you to take more risk; but only if appropriate for YOU. Let’s say that the stock jockey starts to tell you that you really need to get into ABC Corp stock as it may be the next big thing. You can feel the fear of losing this ‘opportunity’ creeping into your decision process.
With a plan you will have parameters that provide an idea of what will happen if you make certain decisions. Hopefully, this information will help to guide you to the decision that helps you to achieve your long-term goals. In other words, you cannot really know how much risk is appropriate for you or what actions to (not) take if you don’t know what your financial position is at the moment. Contact your financial professional. Get a plan together. It is time for you to have all the information that you need to make good decisions when opportunities and challenges arise.
by Ronald Donato, Jr., CFP®, MBA
Director of Financial Services