Investing: Who is in Charge?

These are common questions to ask, especially when the stock market is as volatile and as negative as it has been for the last months. Where do you go to find out what you should do?

Everyone seems to have an opinion when it comes to investing and the stock market:

  • “Wait until it bottoms and then get back in” (easier said than done).
  • “Put your money under the mattress, which is the only safe place these days” (it might not be the safest place in case of a fire or robbery and it sure doesn’t give you any kind of dividend or earnings).
  • “Buy only blue chip stocks, nothing speculative” (sometimes even blue chip stocks – the best of the best – turn downward and don’t make you money).

And these are just a few of the opinions.

If you watch CNBC, Bloomberg Financial news or any other financial cable channels, you will get a myriad of opinions and viewpoints, also. Every talking head appearing on any given show has a different perspective and varying advice as to what to do when the market is skimming the bottom of the sea.

Although when the market is doing well, everyone — and I do mean everyone — is an expert. Even monkeys throwing darts at stock names wind up making money in a bull market, as a very famous experiment done for some television show proved a few years ago. The monkeys were able to pick winners at a better rate by throwing darts at stock names than the professional investors who participated.

Watch a financial show for the entire time the market is open and down on any given day and you will hear literally dozens of warnings and wishes. Watch the show for the entire day when the market is up and you will hear a 180 degrees opposite viewpoint and perspective. From one day to the next, in other words, you are getting various comments that are polar opposites.

Read the current financial magazines and the same thing will happen. Talk to your stockbroker and ditto,opinions and admonitions, which are probably nothing more than educated guesses.

What’s a person – i.e., a gal who wants to be savvy and invest wisely no matter what economic and market conditions are — to do? Where is wisdom? Where is the guidance that can allow you to sleep at night and face the next day with courage and bravado?

Remember the old TV commercial from the now defunct brokerage firm E.F. Hutton? People are sitting comfortably at an apparently very high-end restaurant, chatting casually, minding their own business, until the E.F. Hutton broker begins to discuss with his client and share his wisdom about investing in the stock market. At that point, all other conversations stop and bodies lean into the stockbroker to hear what he has to say. The comment and caption was: “When E.F. Hutton speaks, people listen.” In other words, brokers at E.F. Hutton were worth listening to because they would and could tell you where to invest your money wisely.

Did I mention that E.F. Hutton is no longer a stand-alone entity, having merged and been sucked into a bigger conglomerate?

Here’s the point: You are in charge, or at least you should be. As I have stated many, many times and which needs repeating in these troubling economic times: No one cares about your money like you do. You are your own best advisor. You know your risk levels, the line beyond which you are not comfortable living. If you feel better being out of the stock market right now until things calm down, you know this in your heart and your gut, and no broker wanting to make a commission should be able to move you to another decision. Trust yourself.

Ask yourself the hard questions: What can I tolerate in terms of insecurity and risk? What would happen to me financially if I lost most or all of this investment money? Once you have answered these questions, you can move into the area of research to find the investment vehicles that best provide you with a bit of security along with a bit of profit.

It can be done. You’re the boss of your money. Go slowly, be sure, ask questions, read, study. It’s worth it to put a bit of time and energy into this decision and it will pay off in years and decades to come.

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