{"id":2139,"date":"2013-06-28T12:26:13","date_gmt":"2013-06-28T16:26:13","guid":{"rendered":"https:\/\/blog.bradpine.com\/?p=2139"},"modified":"2013-11-12T14:09:27","modified_gmt":"2013-11-12T19:09:27","slug":"the-four-financial-behaviors-that-are-sabotaging-your-portfolio","status":"publish","type":"post","link":"https:\/\/blog.bradpine.com\/2013\/06\/28\/the-four-financial-behaviors-that-are-sabotaging-your-portfolio\/","title":{"rendered":"The Four Financial Behaviors that are Sabotaging Your Portfolio"},"content":{"rendered":"

\"large__4250382201\"<\/a>There are a lot of things you can do right in investing, and there are a lot of things you can do wrong. In the 22 years I\u2019ve been an advisor, I\u2019ve learned that much of the work of providing wealth advice is understanding the psychology of my clients. A lot of what I do involves helping clients manage their individual fears, needs, and preferences within the broader framework of prudent investment management.<\/p>\n

In all those years, there are a few behaviors I see over and over again that can really sabotage a diversified, long term investment plan. Everyone is different, so you may see yourself in one or two of these but not the others — but by catching these behaviors, you can save yourself a lot of headaches, and potentially a lot of money!<\/p>\n

Timing the Market<\/strong><\/span><\/h2>\n

Almost everyone is tempted to time the market at some point with accounts allocated to long term, diversified investments. For example, I had a small handful of clients who pulled out when the market declined in 2008, and by the time they got back in, the market had already rebounded past their selling point. I have other clients who rightfully got shaky in late 2012 as the fiscal cliff approached, and decided to pull their long term money out of the market. They too missed the growth we\u2019ve enjoyed this year.<\/p>\n

I\u2019m not saying it\u2019s not prudent to exit the market if it\u2019s beyond your risk levels or if you can\u2019t afford to let your account fall below a certain point. It\u2019s also quite a different story if you have specifically allocated assets to short-term trading. But in general, I have found that the odds are greatly against you when you try to time the market with your long term investments. Because long term assets carry weighty descriptions like \u201cretirement\u201d or \u201ccollege fund\u201d, it can be really hard to get past short term fears and dive back into the market.<\/p>\n

How do you get past this kind of thinking? Consider all the things that you\u2019re scared about when it comes to the market. Terrorism shaking the United States? Interest rates climbing to a crazy 23%? The worst stock market crash since 1929? Unemployment increasing to a scary rate? Well, I want to inform you that each of these has already happened at least once in the past few decades, and so did some spectacular growth and innovation. There are always going to be reasons and excuses for you not to buy into the market. Just remember that if you didn\u2019t stick with it in the past 30 years, you also missed out on some of biggest bull markets in history.<\/p>\n

It comes down to this: Times of turmoil are also times of opportunity. However, if you\u2019re trying to take advantage of all the benefits of investing for the long run, you need to focus on the appropriate time horizon, which is usually measured in years and decades, and not in days and months. Obviously we can never predict the future, however the past has lessons to offer that we can look to as we prepare our portfolios for the long run.<\/p>\n

Overplaying the Market<\/strong><\/span><\/h2>\n

Similar to timing the market, those who overplay the market tend to be overconfident in their investment abilities. These are the investors who want to take the biggest risks and like to allocate all their investable assets to the hottest asset classes. They tend to overtrade, and miss out on longer term, steadier growth.<\/p>\n

I usually suggest that these investors allocate a separate investment account to their trading hobby. This way, the bulk of their assets are kept in a well-diversified, actively managed portfolio that takes into account the appropriate time horizon, while the separate account is reserved for satisfying the client\u2019s desire to actively trade and pursue risky investments.<\/p>\n

Ignoring the Market<\/strong><\/span><\/h2>\n

There are also those who just prefer not to know. When times are tough, these clients don\u2019t want to hear about their performance, and when times are good, they tend to think they\u2019ll always last. A good advisor will pick up on this preference and recommend an appropriate strategy that helps ensure long term performance. However, without an advisor or outside encouragement, these investors can find that their accounts stagnate with poor diversification and worse performance.<\/p>\n

If you feel like it\u2019s just really difficult to face your investments or your financial situation, you might be in this category. Taking the first step towards addressing these issues can be a huge effort, but I promise you, it\u2019s worth it! You might greatly benefit from the guidance of a good advisor, who can help you allocate your account to meet your long term goals and who will take the reins in overseeing things like rebalancing or adjusting your investment strategy.<\/p>\n

Procrastinating<\/strong><\/span><\/h2>\n

Last but certainly not least, and by far the most common bad investment behavior there is: Procrastination. You\u2019ve heard it from me before, but I have to say it again, there is nothing worse you can do than waiting to take charge of your financial situation. I\u2019ve had clients who took years to make a change, and in those years they suffered with stagnating portfolios and poorly diversified investments.<\/p>\n

So, how do you get past it? Take 15 minutes to do one thing that can move your financial plan forward. Dust off that allocation, call your advisor, or find the 401(k) rollover paperwork you\u2019ve been meaning to fill out. Whatever you can do, just take a small step today, and by adding up those steps over time you\u2019ll find that you\u2019ve made a whole lot of progress.<\/p>\n

What financial behaviors are sabotaging your portfolio? Did these tips help? Email or call me and let me know – I love your feedback!
\n.
\n.
\nphoto credit: Learning Futures Festival 2010<\/a> via photopin<\/a> cc<\/a>
\n.
\n.
\nTo learn about retirement savings, download my free eBook, \u201c10 Tips You Need to Know About Your IRA Rollover<\/a>.\u201d This short book is packed with critical information that will help you make the right decisions about your retirement savings.<\/p>\n

<\/object><\/p>\n","protected":false},"excerpt":{"rendered":"

There are a lot of things you can do right in investing, and there are a lot of things you can do wrong. In the 22 years I\u2019ve been an advisor, I\u2019ve learned that much of the work of providing wealth advice is understanding the psychology of my clients. A lot of what I do […]<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[9],"tags":[922,20,14],"jetpack_publicize_connections":[],"aioseo_notices":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2p1nA-yv","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":2691,"url":"https:\/\/blog.bradpine.com\/2019\/03\/27\/the-true-evolution-of-investing-personalized-customized-tax-efficient\/","url_meta":{"origin":2139,"position":0},"title":"The True Evolution of Investing: Personalized Customized & Tax efficient","author":"Bradford Pine","date":"March 27, 2019","format":false,"excerpt":"One of the major benefits of being an independent advisor is the ability to evolve and enhance my clients\u2019 investment strategy choices. At the Bradford Pine Wealth Group (BPWG), we\u2019re always on the lookout for more effective ways to offer my clients personalized, risk managed, and tax sensitive portfolios. As\u2026","rel":"","context":"In "Individual Investors"","block_context":{"text":"Individual Investors","link":"https:\/\/blog.bradpine.com\/category\/individual-investors\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/blog.bradpine.com\/wp-content\/uploads\/2017\/05\/bradford-pine-wealth-group-garden-city-new-york-wealth-advisor-covered-call-strategy-covered1.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":43,"url":"https:\/\/blog.bradpine.com\/2010\/04\/14\/institutional-investing-for-the-individual-investor\/","url_meta":{"origin":2139,"position":1},"title":"Institutional Investing for the Individual Investor","author":"Bradford Pine","date":"April 14, 2010","format":false,"excerpt":"In my continuing effort to improve the financial well being of my client\u2019s, their families and you, I would like to share my best thoughts and thinking on how to invest in this complex and ever changing economic environment. Looking back over my 17 years of experience in the financial\u2026","rel":"","context":"In "Individual Investors"","block_context":{"text":"Individual Investors","link":"https:\/\/blog.bradpine.com\/category\/individual-investors\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":846,"url":"https:\/\/blog.bradpine.com\/2011\/06\/01\/powerful-steps-for-any-investor-from-ira-rollovers-to-financial-planning\/","url_meta":{"origin":2139,"position":2},"title":"Powerful Steps for Any Investor: From IRA Rollovers to Financial Planning","author":"Bradford Pine","date":"June 1, 2011","format":false,"excerpt":"Congratulations! By reading this article you\u2019re taking an important step in your financial life, one that your future self will probably thank you for in twenty years. In helping clients, I\u2019ve found that there are many unique issues that people face every day, but there are also a lot of\u2026","rel":"","context":"In "Individual Investors"","block_context":{"text":"Individual Investors","link":"https:\/\/blog.bradpine.com\/category\/individual-investors\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/blog.bradpine.com\/wp-content\/uploads\/2011\/06\/Powerful-steps.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":1290,"url":"https:\/\/blog.bradpine.com\/2011\/08\/12\/managing-market-volatility-seeking-a-little-stock-market-advice-right-now\/","url_meta":{"origin":2139,"position":3},"title":"Managing Market Volatility: Seeking a Little Stock Market Advice Right Now?","author":"Bradford Pine","date":"August 12, 2011","format":false,"excerpt":"We are all aware of the volatility in the markets. From July 22 to August 11, 2011, the S&P 500 was down as much as 18% intraday and closed down almost\u00a013%, in that time period. The market news has focused on U.S. government debt and the unfolding financial crisis in\u2026","rel":"","context":"In "Individual Investors"","block_context":{"text":"Individual Investors","link":"https:\/\/blog.bradpine.com\/category\/individual-investors\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/blog.bradpine.com\/wp-content\/uploads\/2011\/08\/daze.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":2445,"url":"https:\/\/blog.bradpine.com\/2014\/12\/01\/why-would-i-offer-my-clients-lending-services-from-jumbo-mortgages-to-lines-of-credit\/","url_meta":{"origin":2139,"position":4},"title":"Why Would I Offer My Clients Lending Services? From Jumbo Mortgages to Lines of Credit","author":"Bradford Pine","date":"December 1, 2014","format":false,"excerpt":"Being a wealth advisor is not just about investing and financial planning, it\u2019s about being able to offer comprehensive services for every aspect of a client\u2019s financial life. Clients come to me with questions about every kind of personal issue you can imagine, from planning for a child\u2019s college education\u2026","rel":"","context":"In "Lending Services"","block_context":{"text":"Lending Services","link":"https:\/\/blog.bradpine.com\/category\/lending-services\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/img.youtube.com\/vi\/6RwE-Gw_E-s\/0.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2517,"url":"https:\/\/blog.bradpine.com\/2015\/09\/09\/its-a-volatile-market-do-you-know-where-your-financial-advisor-is\/","url_meta":{"origin":2139,"position":5},"title":"It’s a Volatile Market ~ Do You Know Where Your Financial Advisor is?","author":"Bradford Pine","date":"September 9, 2015","format":false,"excerpt":"If you\u2019re reading this, you probably know that the market has been volatile lately, to say the least. Recently the DOW was down about 14 percent off the high and the index had its worst month in over five years. ~ Do you know where your financial advisor is? When\u2026","rel":"","context":"In "Economic Notes"","block_context":{"text":"Economic Notes","link":"https:\/\/blog.bradpine.com\/category\/economic-notes\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/blog.bradpine.com\/wp-content\/uploads\/2015\/09\/businessman-head-in-sand-300x201.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/blog.bradpine.com\/wp-json\/wp\/v2\/posts\/2139"}],"collection":[{"href":"https:\/\/blog.bradpine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.bradpine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.bradpine.com\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.bradpine.com\/wp-json\/wp\/v2\/comments?post=2139"}],"version-history":[{"count":0,"href":"https:\/\/blog.bradpine.com\/wp-json\/wp\/v2\/posts\/2139\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.bradpine.com\/wp-json\/wp\/v2\/media?parent=2139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.bradpine.com\/wp-json\/wp\/v2\/categories?post=2139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.bradpine.com\/wp-json\/wp\/v2\/tags?post=2139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}