How Do I Restore Order to My Life?
Today’s world is awash in information. Our phones, tablets, and computers give us access to online sources that provide constant updates on news and events. Cable and satellite TV providers offer over 500 channels today, competing to provide 24 hours of the most watchable content each day.
Most Americans grew up watching TV ads and learned at an early age to view them with skepticism. This has been a valuable skill to avoid being taken advantage of by someone with more information about a particular subject. However, in today’s world, it is getting harder and harder to discern what is factual from what is “advertising”, even from formerly respected institutions.
The question has changed – it is no longer whether or not we have enough information, but whether or not this information is useful to us. The need to filter out the meaningless “noise” is increasingly important, especially in the financial markets.
With enough time and energy, and the inclination, any reasonable person can find appropriate mutual funds or other vehicles to invest their savings into. The financial industry spews out enough choices to satisfy the pickiest consumer, along with a mind-numbing amount of information on objectives, performance, fees, and managers. So-called "robo advisors" will help you construct a portfolio of assets based on your risk tolerance, determined by a few online questions.
However, all of this does most people absolutely no good whatsoever. Why not? Their behavior gets in the way. Why did the markets drop 40% in early 2009? Because a lot of people who thought they could handle risk ended up selling whatever they could at a loss, based on the news and headlines. Investor behavior is the biggest risk to a portfolio.
But what if you had a clear idea of what you needed your money for, and when, and were prepared for market fluctuations ahead of time? What if market ups and downs were not important any more? Would you feel like your life was in order, you were more satisfied, and happier?