Sometimes the Best Thing to Do is Nothing
Your money is like soap. The more you handle it the less you will have.
— Gene Fama Jr., Economist
You’re in a hurry, but you’re stuck in traffic. It seems like the lane you’re in just isn’t moving. But the cars in the next lane keep passing you. You’re too smart to just sit there, so you change lanes…only to find that now the lane you were just in is moving and you’re stuck again. As you keep changing lanes, you realize you’re actually going slower and getting more frustrated.
Unfortunately, too many investors are impatient and keep changing lanes and finding themselves getting further behind. And this can be costly. On average, investors tend to significantly underperform the stock and bond markets.
Some might think they know when to buy and sell. But this means they have to be right twice: picking the best time to get in or out of the market, something few investors — even brilliant hedge fund managers — have been able to do predictably and consistently.
Other investors give in to panic or even greed and make hasty, emotional decisions. The objective advice and guidance of a financial advisor can help keep you on track and stop you from making hasty decisions that harm your long-term returns.