S1E9 | Psychology of Money Pt.4
“Progress happens too slowly to notice and setbacks happen too quickly to ignore. As soon as something happens and stocks go down dramatically, everybody’s ready to panic. That’s where the psychology of money comes in. In that situation, everybody’s looking to get out because everybody’s aware that the market is going down. They don’t really pay attention to the fact that it gradually grows overall.”
In this last installment of the discussion on The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness by Morgan Housel, Mike Callahan, the Director of Wealth Management, Eric Sachetta, Financial Advisor, and Joseph Sachetta, Managing Partner, cover the final chapters.
When it comes to financial planning, everyone is playing a different game based on their life goals. Morgan Housel recommends looking at goals and intentions, doing research, and then making decisions not based on the current market news. Remember that the news and headlines don’t always reflect the game at hand, and may even be encouraging a mass sell-off when the more prudent choice in the long run hold investments long-term. According to Housel, an investor can be wrong half the time and still make a fortune with a diversified portfolio over a long period of time.
Before beginning to invest, sit down and define the cost of realizing your goals. For investing, until you achieve the gains, it’s not a dollar and cents cost. The true cost is the uncertainty, the fear, and the possible regret if the wrong decision is made. Understand the psychological factors of investing and be willing to pay them in order to reach your financial goals.
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If you need help defining your goals and sticking to your own investment path, the advisors at Sachetta Callahan can help you create a plan and provide the guidance you need along the way. Contact us today.