Recently, when I quipped a message back to a friend’s question about the market, he told me I should write fortune cookie quotes!
It’s true… I’m guilty of using “one-liner’s” but perhaps I’m in sage company?
Here are a few handy ones:
“Be fearful when others are greedy, and greedy when others are fearful.” – Benjamin Graham. “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” — George Soros “What comes up, must come down.” – Sir Issac Newton
Love it or hate it we are all in charge of our financial futures. No longer can we hide behind a pension. And, even if you throw blind trust to a professional there is only so much they can do.
Unfortunately, none of us know how high a particular company or stock market will rise… even the professionals.
So, what are we to do?
Simple.
Use another maxim!
Such as, “Prudent decisions over time lead to success”.
This can be formalized in a simple financial plan and/or investing journal. Which should outline what at savings rate is needed to achieve your view of success, what rate of return, and how much risk you’re willing to take to get there.
If you can reach your goals with a 6% rate of return, then why expose yourself to the risks of a portfolio with a 20% rate of return? And if you need/want a 20% rate of return what is the best way to get there with the least amount of risk?
It’s time to make prudent decisions. The S&P 500 is crowded with many of the Index’s top tech stocks fueled by low interest rates. Risks are rising. For example, many companies in the tech sector have price/sales ratios last seen at the top of the dot-com bubble.
Consider reducing a portion of your exposure to equities.
To quote Buffet once again:
“Cash combined with courage in a time of crisis is priceless.”
Learn from Newton. Look up, catch the Apple, and take a bite out of it.
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