As the kids go back to school and we realize that 2024 will be upon us in about 90 days, it is a good time to review the ABCs of successful investing.  

A – Adjust Your Expectations 

It’s important to accept the reality that all financial markets have selloffs. These are a normal and natural part of any economy. It can be helpful to remember that, historically, market losses have been temporary. While some losses have been greater than others, financial markets have generated significant wealth for patient investors. 

During those selloffs, you should expect to feel anxious and maybe even fearful.  However, that doesn’t mean you need to act upon that fear. I believe that far more wealth has been lost due to making decisions based on fear than actual downturns in financial markets. Which brings us to the Bs of investing. 

B – Behave Rationally 

One of the best ways to do that is to temper our emotions and resist the urge to respond immediately. This isn’t easy, but it is essential to making wise financial decisions. Ignoring the financial media and possibly the “know-it-all” family member or friend might be tough, but it will make it easier for you to make thoughtful and deliberate investment decisions. 

Consult with me anytime you feel anxious, fearful or just uncertain about your plan or the markets. Together we can ensure your decisions are mindful, free of emotions, and in line with your goals. And that brings us to the Cs of investing. 

C – Commit to Your Plan 

It takes commitment and courage to hold to your plan. Your plan is your personal road map. Any plan should be prepared for the inevitability of down markets and temporary losses.  This will help you stay on the long-term course. 

Due to the uncertainty of markets, how quickly they can change, and how they often surprise us, committing to your plan provides the best chance that you will reach your goals, despite the occasional setbacks. 

© The Behavioral Finance Network