Money Over 50 Financial Advisers
  • Home
  • What We Do
  • Who We Are
  • Podcast
  • Blog
  • FAQ
  • Contact Us

“When things settle down” and what that really means

20/4/2020

 
man and wife working on laptop at table
​“Should we get out now and come back in when things settle down?” is a question that usually finds its way into investment conversations when the value of one’s investment has dropped.
​When this question is asked, it usually means that the client is uncomfortable with the current volatility of their investment and need to find ways of reducing those feelings of discomfort.

They usually see this being done through moving their investment into cash and waiting until the market has calmed down to get back in.

The rationale behind this thought is understandable; if there is away to reduce pain, more than likely you are going to try to do that.

However, trouble exists in this thought process because people assume that they can get out, avoid all the pain of the volatility, then get back in and pick up where they left off once things settle down.

In reality, what usually happens is people will move their money into cash at a low point in the market and have their money reinvested after the market has already shot up, therefore, crystallising their losses and losing retirement savings in the process.

What’s basically happening in this situation is that people are selling their superannuation for 70c for the dollar, for example, and buying back in once the price is back at a dollar.

If you were a homeowner, you wouldn’t sell your home to someone when the value is temporarily low and then buy it back once the price has returned to normal would you?

It just doesn’t make sense to do that for a home, so why would it seem right to do that regarding an asset such as your superannuation and/or investments?

Volatility is in the price of everything and there is no exception when it comes to investments.

It helps to not think of those periods of low market value as a loss to your retirement savings, but rather as a period to increase your investment portfolio at discounted prices.

Knowing that you can buy a much larger number of shares for the same cost to you, helps to realise that sticking to your strategy will be the correct financial decision.

Written by Ali Hogue.


Comments are closed.

    Author

    Dallas Davison, Michael Hogue and Ali Hogue.

    Archives

    January 2021
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    April 2018
    March 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    June 2015

    Categories

    All
    Achieving Financial Goals
    Active Management
    Age Pension
    Alice Springs
    Assets
    Budeting
    Budget
    Budgeting
    Business Owner
    Cash
    Children
    Clients
    Decision Making
    Downsizing
    Effective Budgeting
    FAQ
    FAQ's
    Fees
    Financial Advisor
    Financial Advisor Julia Creek
    Financial Advisor Richmond
    Financial Advisor Winton
    Financial Freedom
    Financial Goals
    Financial Mistakes
    Financial Myths
    Financial Planner
    Financial Planning
    Financial Planning Charters Towers
    Financial Planning Mount Isa
    Financial Priorities
    Financial Recovery
    Financial Risk
    Financial Risks
    Financial Security
    Financial Strategy
    Financial Support
    Hand Outs
    Hand-outs
    Happy Money
    Hedonic Treadmill
    Index Management
    Inflation
    Inheritance
    Interest Rates
    Invesment
    Investment
    Investment Property
    Investment Winton
    Julia Creek
    Legislation Changes
    Listener Question
    Money Over 50
    Mortgage
    Mount Isa
    Mount Isa Superannuation
    Norway Sovereign Wealth Fund
    Profit
    Renting
    Renting Vs Buying
    Retirement
    Retirement Goals
    Retirement Planning
    Retirement Planning Julia Creek
    Retirement Planning Risks
    Retirement Savings
    Retirement Winton
    Risk
    Salary Sacrifice
    Saving
    Savings
    Semi-retirement
    Sharemarket
    Shares
    Strategies
    Strategy
    Superannuation
    Superannuation Contributions
    Tax
    Tax-free
    Travel Managers

​HOME
WHAT WE DO
WHO WE ARE
PODCAST
BLOG
CONTACT US

Important Information
Financial Services Guide
Privacy Policy
Money Over 50 Financial Advisers
​
Tel 07 4772 0938
Email mail@mo50.com.au
45 Ingham Road West End Townsville Qld 4810

Money Over 50 Financial Advisers Pty Ltd ABN 26 146 225 505, 45 Ingham Road, West End Queensland 4810 is the holder of an ASIC Australian Financial Services Licence (AFSL) #471826.

Website by Grey and Grey
  • Home
  • What We Do
  • Who We Are
  • Podcast
  • Blog
  • FAQ
  • Contact Us