Investment Principles – The Price of Panic

As a client of PFP Financial, you will be no stranger to hearing about our views of the power of equity markets to increase wealth over time. We are very unapologetic for this because it’s important and the vast majority of people never receive the investment returns they are entitled to for being in the markets. Whether it is poor and unsuitable financial products, high fees that are buried in these products or simply not understanding the need to have at least a portion of money invested in the best companies in the world, people are leaving money on the table. Another key reason is that people panic when equity markets suddenly and unexpectedly fall. They will run for cover and sell out of their investments / pensions at the worst possible time. The urge to do so is understandable.

It is easy for our mind to default to the worst-case scenario. It might go something like this

I have lost all of this money and I won’t be able to retire. I cannot afford
to lose anymore, I need to do something about this. If I sell now, I
will take those losses but at least I will stop haemorrhaging money.

This content is a preview of a Client Only communication – to obtain the full documents please contact the office on 01 498 0007.

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