Many products may claim to keep the stress out of investing, but they’re crippling your growth over time.
You Need to Stick to the "RIGHT" Risk Level
The best way to avoid stress and anxiety in the market is to pick a level of risk that you and your plan for the future can handle and stick with it. Don’t jump in and out of the market based on your fears.
As the market is dropping, buy more. Get your new stocks cheap and then flip them for a great profit once the market picks back up.
It’s going to drive you crazy, but in the long-term, you’ll come out ahead.
Instead of worrying about your current assets losing value, remember that when stock values are dropping, they’re actually on sale.
I had a new client, Jim, come in last week. He had come into a large amount of money and was trying to decide the best way to spend it.
He had seen two other advisors. One suggested he invest in an annuity, which Jim had heard a lot of bad things about. The other suggested a product called a Volatility Control Index.
Jim was leaning towards the latter option but came to me for a second opinion.
These products may claim to keep the stress out of investing, but they're crippling your growth over time.
The "Hero" You Don't Need: Volatility Control Index
Volatility Control Index (VCI) products have been widely successful for many and are being extremely common for clients to bring up in our follow-up meetings.
What Are VCI's? They invest your money in popular stocks so it grows with the market, but claim to help you avoid the stress and risk involved with normal investing by automatically triggering sales of your investments during a drop. VCI's will move your money in short term “safe” bond-type investments.
Then when the market goes back up over the threshold, it will move your money back and buy more.
Doesn't that sound great? Who doesn't love stress free money-growth?
The big problem with these products is that they fly in the face of actual growth. You know the popular phrase: “Buy Low, Sell High,” right?
The Most-Difficult Component To Good Investing
VCI's do the exact opposite of good financial principles that produce long-term growth.
The hardest part of investing is knowing that as the market is dropping, you’re supposed to BUY more stocks, not sell what you already have.
People struggle to grasp that concept because they want to sell what they have before they lose too much money. But you should NEVER sell your products as they’re losing value.
You’ve only truly lost money once you’ve sold.
Then it gets worse, you miss out on more money again as the values go back up and you buy back in too late.
Don't Trust Your Emotions & Discover The Perfect Amount of Risk
If you want to feel safe and secure in your investments, don’t buy into a flashy sounding product. Buy into a financial advisor who is looking out for you and your money.
We offer free consultations to walk you and our family of clients through figuring out a level of risk they can handle. We’ll make sure you feel safe and are able to capture the growth your future deserves.
It's a proven strategy that actually gives you the peace the other solutions advertise. Come say hello, and tell us about your dreams.