“I need help with a few things, but I my portfolio isn’t one of them.”
“I’ve done really well in my ‘play account’, so I think I’ll try managing the rest of my investments myself.”
“My 401k has really grown, so I don’t want to change any of the investments.”
These are recent quotes from some current, as well as prospective Financial Zen members.
As a professional money manager, I hear things like this all the time. But the frequency has picked up
substantially this year.
And when that happens, it signals a dangerous time to invest… on your own.
To be clear, the way we manage investments at Financial Zen is systematic and unemotional (which means
it’s never a bad time to invest). So if we manage your money, you’ve got nothing to worry about.
But if you’re flying solo, you might be destined to become another statistic.
Unsubstantiated confidence has accompanied every bull market since the dawn of time.
Meaning inexperienced people confuse correlation for causation.
They think to themselves “My portfolio has grown, therefore I am a good investor.”
What they don’t realize is that EVERYONE’S portfolio has grown!
You would have to try really REALLY hard right now to NOT make money investing.
The only way to not make money is to not be invested at all.
Unfortunately, when the next nasty downturn happens that unsubstantiated confidence will end up
hurting them.
They’ll think they’ve got it figured out and sell.
Then when the market bounces back, they’ll think they can see it clearly and sit tight in cash while
everyone else rides the wave back up.
So if your portfolio has done well recently, I am very happy for you and wish you continued success.
However, it’s unlikely it is because you’ve suddenly become an investment wizard. It’s because the market
has been hitting new all time highs consistently for over 4 years.
Warren Buffet sums it up nicely.
“Only when the tide rolls out do you discover who’s been swimming naked.”
