Investing Perspectives

Posted 04 May 2017 by Rick Irwin, CFP, CLU; Natalie LeBlanc


Investing your hard earned money is a decision that takes careful thought and planning, and the rationale behind how, when, and what to invest in varies person to person.

  Rick Irwin, CFP, CLU

The investing process is perhaps one of the most fear-inducing, frustrating, thrilling and sometimes seemingly complex activities we as humans can engage in. Just as the marathon runner doesn’t quit at the first hill they come across, or the 10th, we need to remain focused on the long term, especially in a world of 24/7 media coverage where financial predictions are a dime a dozen.

Remember the human brain is hard wired to fear short term pain or loss more than to anticipate long term reward, and gravitates towards the recent dramatic gains of others in anticipation of similar easy profits rather than adopting the patience of a long-term focus on fundamentals. Being fearful when you should see opportunity and being overly opportunistic when you should be cautious; we can sometimes be our own worst enemies when investing. But the actual path to investment success needn’t be that difficult if you adhere to the simple principals of having a proper plan in place in the first place, aligning your investments inside of a risk budget that will help you reach your goals while allowing you to sleep well at night and not being distracted by short term “noise.”

Even more than that, all too often we as financial advisors espouse the benefits of “staying the course” when we should be drilling even deeper into the longer term perspective: focusing on what this money is actually meant to do to enrich your lives later in life, or those of your family or the broader community.  That’s a little different world view than focusing on CIBC’s latest quarterly earnings or Trumps’ late night “tweeting.” 

 

  Natalie LeBlanc

 

It seems like the hardest step in life is always the first. From our first steps as babies to first days of school and first jobs, taking a new direction in life or even experiencing something new for the first time can be daunting. For many of my peers, market-driven investing incites a fear of the unknown that can prevent you from opening your first account.

It’s not just the fear of something new that prevents young investors from making their first purchase. A lack of understanding of how various investment products work seems to worry many of my friends, surprisingly less so than the fluctuations of the market. That’s where an advisor can help educate and enlighten on the solutions available to young investors. Unique products are available, like socially responsible investing (SRI) and mutual funds with distinct objectives and modern managers.

Beyond the product, aligning your life goals with your financial goals is a practice in which not many people seem to recognize an advisor’s role. Buying your first home, for example, need not be mutually exclusive from other financial goals with proper planning.

Getting started is the hardest part, but it doesn’t have to be with professional advice. The real first step is making a call to a trusted professional. It can be of great benefit for the rest of your life!