During more than 3 decades of working with clients with a vast variety of investment objectives, life aspirations and temperaments, we have noted several qualities that are very predictive of success at investing with success. Indeed we look for these 3 characteristics when we interview prospective clients to determine their fit with our financial planning practice.
The 1st quality is optimism. Folks that don’t have a positive view on life have a difficult time investing successfully. Recognition of the tremendous contributions that capitalism, innovation and globalization have made to our standards of living in recent history provides a ‘glass half-full’ perspective that allows the proper behavior towards one’s investment portfolio.
The 2nd characteristic to be successful in investing is to have an objective, non-emotional discipline toward your investment strategy. Fear and greed, while opposing forces, are responsible for most of the mistakes the average investor makes in making financial decisions. Maintaining discipline can be difficult, as our 24/7 news coverage is built on the business model of generating anxiety with no accountability. Ignoring irrelevant headlines, particularly from the pundits of pessimism, helps in staying the course toward your financial goals while average investors consistently react with, in most cases, the wrong decisions.
The 3rd key to success is to simply have patience. Understanding the businesses you own rather than worrying about the ebb and flow of daily valuations reduces the potential to make investment mistakes created by emotional reactions to fear or greed. In the long run, the shares of well managed companies end up in the hands of the people that deserve them.
A professional, competent wealth advisor’s role is to bring all of this together for you. Your financial picture is at times like playing Tetris - an accelerating velocity over time with the goal of putting all the pieces in place in an orderly manner. A trusted advisor will understand your goals, design a properly balanced and diversified strategy, monitor your progress and provide valuable perspective during the inevitable times of volatility.
Azimuth Wealth Advisory of Raymond James has been providing guidance to individuals and families for over 30 years. Let us know if we can assist you and your family in planning your financial futures.
Views expressed are the current opinion of the author and are subject to change without notice. Past performance is not indicative of future results. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success.