It is with interest that I see people that have invested in the IPO Facebook surprised that there was risk. What is investing? Is it the buying of one stock, gambling on the future of that company and the regulations that govern it, the competition that is unknown, and the price of the stock that is more controlled by unknown than known facts? Is this what you’re building your financial future on?
Don’t we need to build our financial future on solid ground? I think we need a plan or to be systematic. I think we need an investment strategy that we believe in, not one that we gamble with. I think we need a portfolio that is diversified, allocated and has low correlation that puts a strong strategy in place rather than the emotion and dream of quick riches.
Financial pornography put out by the news media, Wall Street and those that gain from your imprudent actions based on advice from someone that does not know you, your circumstances nor your dreams is not likely to lead to financial success. Financial success is born from having a plan. Financial success has a gestation period that takes patience and an understanding of the process of investing and prudent financial planning. Keep in mind that no financial strategy can assure a profit or protect against a loss.
Can you get rich out of an IPO? Yes. Can you get rich out of buying a lottery ticket? Yes. Does that mean that either one of these are prudent investment strategies to solve a lifetime of imprudent financial decisions. Now, many of you are successful and just get caught up in the emotion of the time. But, we need to stay true to our plan and the process that is dictated by our goals and the prudence of good planning.
Wayne von Borstel, CLU, ChFC, CFP®, MSFS
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.