The world of finances can be an emotional investment—as well as a monetary one.
Financial Advisor Carl Kielbasa, with Carroll Retirement Plans & Investments, coaches clients on how to deal with losses.
He says the number one rule is “don’t lose money,” but that’s much easier said than done.
“Take the S&P 500 Index for instance,” he says. “The S&P 500 Index on average is about somewhere around 8 percent—the average investor has done around 3 percent.”
And there’s a simple reason for the discrepancy between successes:
Kielbasa says people get excited when the market is high, but panic when it gets low—even though buying high and selling low is a guaranteed way to lose money.
It should be buy low, sell high.
“People panic and get emotional about their money, but if we can smooth out that ride a bit, people are going to be far happier,” Kielbasa says. “And at the end of the day be much further ahead with their retirement savings.”
Breaking the emotional tie
An advisor is one way to put a buffer between your fears and investments. Kielbasa’s advice is to consult a professional because it’s not their money, lessening the decisions made out of fear or panic.
“Try and look at it at a more logical standpoint,” he says.
Kielbasa has his own investment philosophy—complete with a baseball analogy.
“I tell my clients I don’t try to go out and hit a lot of home-runs, because guys that hit a lot of home-runs strike out a lot,” he says. “My goal is to go out and hit singles and doubles and ultimately win the game for you.”
For more financial advice or information, check out Carroll Retirement Plans & Investments website here.