The Right Questions

Being a successful investor DOESN’T mean you have to know everything.  Investment advice provided from an Investor Coach leads to increased confidence and success when you can get “YES” answers to 20 key questions.    

It’s the job of an Investor Coach to help you get YES answers to all these.   Here are 10. 

1. Are you invested in the market? (This should be an easy one!)

2. Do you know how markets work? (Do you understand the underlying dynamics of the market? If not, you are setting yourself up for stress and anxiety when the markets underperform.)

3. Have you defined your investment philosophy? (Do you believe that markets are efficient or do you believe that markets are inefficient? Does your investment strategy match your investment philosophy?)

4. Have you identified your personal risk tolerance? (At what negative return level do you become unable to “hang in there” when markets are down?)

5. Do you have a system to measure diversification in your portfolio? (Does owning lots of stocks or mutual funds equal diversification? Will all of your holdings move down together during the next market downturn?)

6. Do you have system to measure the volatility in your portfolio? (If you can’t measure the risk or volatility then how can you expect to control it?)

7. Do you consistently and predictably achieve market returns? (The vast majority of investors don’t.)

8. Have you measured the total amount of commissions and costs in your portfolio? (There are often fees and expenses that are not easily visible to the investor)

9. Do you have an Investment Policy Statement? (This is mandatory for qualified pension plans. If it is good for them it may also good for you.)

10. Do you know the three warning signs that you or your advisor are gambling and speculating with your money versus prudently investing it?

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