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Will You Have Sufficient Funds for Your Entire Retirement

Posted by Frank McKinley on
 August 7, 2020
  · No Comments

When you’re young, the idea of retirement is shrouded in idle thoughts of what you’ll do when you don’t have to work anymore. But while those fast approaching retirement may have a clearer view of what is to come, in some ways, they are just as unaware of what is really in store for them over the next few decades. Most of us don’t know how long we’re going to live, so making sure we have sufficient funds for our entire retirement is incredibly important.

How Much to Save?

While it’s thought you may only need as low as 70% of your current income per year in retirement, it is wise to assume that you will need closer to 100%. Think of all the things you enjoy doing now: traveling, hobbies, attending cultural events and sports games. All of these could be a vital part of an active and interesting retirement, but they also cost money. Make sure you have saved enough to be active and that your withdrawal rate is not so high that your resources could deplete early. While it’s always customizable, a good starting point is to withdraw 4% in the first year of your retirement, and continue to adjust for inflation down the road.

Cutting back on living expenses now will free resources for more contributions to your retirement and will give you an idea of how little you can live comfortably on. This will give you a better idea of how much you will really need in retirement. The most important expense to get rid of is payments on any debt. Your cost of living will be significantly reduced if you have paid off your mortgage and any outstanding consumer debt.

When forming a plan or determining if you are ready to retire now, err on the side of longevity when it comes to your lifespan. Add a few years to what is generally expected — plan on living until 85 or 90. It is a far better situation to have saved more than necessary than to run out of funds late in life. In the vein of further caution, it is a good idea to have an emergency fund outside of your retirement plan. A general rule is to have at least six months of living expenses tucked away just in case.

What about Housing?

In general, housing should take up about 25% of your gross pay or 35% of your take-home pay. If you own your own home and have paid off your mortgage, this shouldn’t be a difficult guideline — but remember that with a house comes additional, and often expensive, repair and maintenance costs. If you plan on staying in your home throughout your retirement, make sure the big stuff is in good working order or replaced while you are still drawing income. This
includes the roof, the foundation, siding, HVAC, sewer lines, and septic system, as well as an emergency fund in case of fire or water damage.

Your house will also need to be adapted for your needs as you age. You may need to consider selling a home that requires a lot of upkeep and downsizing to something more manageable. No one wants to face the reality of physical deterioration, but most people face mobility issues as they age and a one-story home is safer and easier to navigate.

Continuing Income Options

It may be tempting, but resist the urge to take early retirement. It is difficult enough to save enough money to live on in retirement if you are only retired for 20-25 years. Imagine if you retire at 55 years old and live for another 35 years. You will need funds to support yourself in retirement for longer than you were in the workforce. Every extra year you work is a year you don’t have to support yourself using your retirement savings. Once you’ve retired, it can be helpful for your savings and your wellbeing to work a casual, light job. Many retirees find themselves missing the comradery of the workplace and the continued income will allow for more spending money, vacations, and
greater security in your savings. You could put your experience to work for you as a part-time consultant in your
former field, or put in a few hours a week at the town museum.

Last but not least, consider longevity insurance. This is a type of deferred annuity that will continue to provide income well into your twilight years. People usually purchase it at around 65 years old, and the payout begins at 80 years.

Frankly Speaking

“In politics, stupidity is not a handicap.”
– Napoleon Bonaparte

“No man can think clearly when his fists are clenched.”
– George Jean Nathan

Regardless of the social injustices over the last 400 years in
our country, we cannot possibly rectify them all before November.
‘Defunding’ police, defacing monuments and disregarding
warnings about the virus will not help any cause and may lead
to avoidable death. Responsible citizens must accept ‘what is’
not what they might like ‘to be’ before the process of democracy
can correct the sins of the past.

“Patriotism is supporting your country all the time, and
your government when it deserves it.”
– Mark Twain

“Freedom is never more than one generation away from
extinction.”
– Ronald Reagan

Napoleon

If you would like more information or to discuss your financial concerns
please call 973-515-5184  or click the button below.

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Representatives are registered through, and securities are sold through Nationwide Planning Associates, Inc., Member FINRA/SIPC, located at 115 West Century Road, Suite 360, Paramus, NJ 07652. Investment advisory services are offered through NPA Asset Management, LLC. Insurance sold through licensed NPA Insurance Agency, Inc. agents. Frank is registered in NJ, NY, PA, FL, CT, CO, NC, OH and RI. He is also licensed for life and health insurance in NJ, NY, FL, OH and RI. The presence of this web site on the Internet shall in no direct or indirect way be construed or interpreted as a solicitation to sell advisory services to residents of any state other than those listed above and shall not be deemed to be a solicitation of advisory clients living in any state other than those listed above. Nationwide Planning Associates, Inc. and Frankly Financial are non-affiliated entities.
Copyright © 2020. Some articles in this newsletter were prepared by Integrated Concepts, a separate, non-affiliated business entity. This newsletter intends to offer factual and up-to-date information on the subjects discussed but should not be regarded as a complete analysis of these subjects. Professional advisers should be consulted before implementing any options presented. No party assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

Categories : Blog, financial planning, Financial Services, Retirement
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Financial Tips for the Sandwich Generation

Posted by Frank McKinley on
 June 22, 2020
  · No Comments

If you are caring for young children and aging parents, you are part of the sandwich generation. Developing a financial plan for your parents,
your children, and yourself will help you navigate the challenges you face.

A Retirement Income Plan for Your Parents

It’s time to have a serious money talk with your parents. In addition to understanding their wishes
for medical treatment and long-term care, you should also understand if they have adequate retirement income.

Research Long-Term Care Options

You should research ways to pay for long-term care if your parents need it. If your parents are in good health and still relatively young, they may want to consider purchasing a policy before it
becomes cost-prohibitive.

Prepare an Estate Plan

If your parents do not have an estate plan, it’s
time to create one so that their wishes are met. Help them through this process, or find someone who can, including establishing a will, trust, advanced healthcare directives, and medical and durable powers of attorney.

Inventory Assets

Help get your parents’ financial assets in order by locating all important documents, including financial accounts, retirement accounts, wills, trusts, medical directives, powers of attorney, and digital assets.

Develop a College Savings Plan

As you switch the financial focus from your  parents to your children, start by planning for their largest expense: their college educations. In addition to college savings, you should help your children plan for their life after high school. Engage your children in this process by having them research scholarships, grants, and work-study programs to assist with college expenses.

Your Turn

Because you are sandwiched between your parents and children and taking care of their needs, you may not have developed your own
financial plan. It is important that you take the time to put yourself first and get your own financial house in order.

Creating a financial plan with long- and short-term goals will give you peace of mind that your own financial life is on track. Once it is created, it will give you more time for the other competing priorities in your life.

When Adult Children Return Home

Adult children return home to live for a variety of reasons — they can’t find a job, they have too much debt to afford living alone, or they have divorced and need financial support. Use the situation to help reinforce basic financial concepts:

Set a time frame. Don’t let your child move in for an open-ended time period. Financial goals should be set and followed, so your child is working toward financial independence.

Charge rent. There are increased costs when your child returns home. Although you don’t have to charge a market rental rate, you should charge something. If you’re uncomfortable taking money from your child, put the rent money aside in a separate account and use it to help your child when he/she moves out. Also decide which chores your child is expected to perform.

Put your agreement in writing.  While putting everything in writing may seem too businesslike,
it gives you an opportunity to clearly spell out your expectations and the rules of the house. This can prevent future misunderstandings.

If you would like more information or to discuss your financial concerns

Click Here

Financial Thoughts

Financial literacy scores rise during adulthood for accredited investors and begin declining after age 60, while financial literacy scores for non-accredited
investors are constant from young adulthood through middle age and decline after age 60. An accredited investor is one with an annual income over $200,000 ($300,000 for a married couple) or a net worth over $1 million excluding primary residences. (Source: AAII Journal, November 2019).

Approximately 25% of Americans receive financial planning assistance (Source: TD Ameritrade Institutional, 2019).

A recent study found that 43% of clients prefer human assistance over automation for daily financial activities, while 86% prefer brands that make it easy to
reach a real person (Source: Charles Schwab, 2019).

About 63% of consumers expect to conduct more of their financial business online within the next five years (Source: UMRA and Ernst & Young, 2019).

Approximately 51% of non-retired Americans project that they will be financially comfortable during retirement (Source: Gallup, 2019).

Representatives are registered through, and securities are sold through Nationwide Planning Associates, Inc., Member FINRA/SIPC, located at 115 West Century Road, Suite 360, Paramus, NJ 07652. Investment advisory services are offered through NPA Asset Management, LLC. Insurance sold through licensed NPA Insurance Agency, Inc. agents. Frank is registered in NJ, NY, PA, FL, CT, CO, NC, OH and RI. He is also licensed for life and health insurance in NJ, NY, FL, OH and RI. The presence of this web site on the Internet shall in no direct or indirect way be construed or interpreted as a solicitation to sell advisory services to residents of any state other than those listed above and shall not be deemed to be a solicitation of advisory clients living in any state other than those listed above. Nationwide Planning Associates, Inc. and Frankly Financial are non-affiliated entities.
Copyright © 2020. Some articles in this newsletter were prepared by Integrated Concepts, a separate, non-affiliated business entity. This newsletter intends to offer factual and up-to-date information on the subjects discussed but should not be regarded as a complete analysis of these subjects. Professional advisers should be consulted before implementing any options presented. No party assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

Categories : Blog, financial planning, Financial Services

What to Do If Your Budget Isn’t Working

Posted by Frank McKinley on
 June 8, 2020
  · No Comments

Frankly Speaking

An Australian study that followed the eating habits of 12,000 people found that those who added eight portions of fruit and vegetables a day experienced an
increase in overall mood, health, and life satisfaction- the equivalent of moving from being unemployed to being employed. – The University of Warwick

Spain and Italy relaxed more restrictions, though Russia hit a new daily high for COVID-19 cases. – Morning Brew, May 4, 2020

“It ain’t over til the fat lady sings.” -Yogi Berra

Global greenhouse gas emissions are on track to fall nearly 8 percent this year, the largest drop ever recorded, the International Energy Agency reported today. But the group’s executive director warned, “The only way to sustainably reduce emissions is not through painful lockdowns, but by putting the right energy and climate policies in place.” – NY Times, April 30, 2020

Some feel that recent events will encourage, if not require investors to consider the impact of their decisions both on their own portfolios and on the far more reaching effects over time, far more than just the next quarterly report. Called Socially Responsible Investing (SRI), Sustainable Investing or Green Investing it seems to make sense to help preserve natural resources, reduce pollution, and have a positive impact according to proponents.

If you would like more information or to discuss the topic with me,
please call me at 973-515-5184  TODAY.

If you find that you’re not living within your budget every month, it’s time to take a step back to understand why. The following questions can help you find the issues that may be wreaking havoc on your budget and figure
out how to fix them.

Is Your Budget Realistic?

If your budget is not realistic, then you are immediately setting yourself up for failure. If you are underestimating your expenses based on your current lifestyle, then you are repeatedly going to fail. Develop a realistic budget, including your fixed monthly costs as well as your discretionary spending to get a true understanding of your monthly spending.

Did You Slash the Fun?

If you cut out all the fun, you may be feeling deprived, which can lead to overspending. It’s important to have a little fun each month, so set a dollar amount for entertainment.

Is Self-Control an Issue?

For many people, self-control is the main reason their budget isn’t working. It’s all right to splurge once in a while, but if it’s happening often, you need

to find ways to live within your means. One strategy is to write down the financial goals you are trying to achieve and keep them next to your cash, debit, or credit cards. As you go to make purchases, look at your goals to decide if this purchase is worth it.

Is Budgeting Too Much Work?

If you feel you don’t have the time to track your expenses and evaluate your spending, your budget is not going to be helpful. There are many good budget apps you can use that will make this process simple and less time-consuming.

Do Your Financial Goals Seems Unattainable?

If you feel like you’re never going to meet your goals, you may find that you
give up trying. While your goals may seem daunting, try setting up milestones along the way, so you can see the progress you are making. Take the time to celebrate those milestones to help you stick to your budget.

If you would like more information or to discuss your financial concerns

Click Here
Representatives are registered through, and securities are sold through Nationwide Planning Associates, Inc., Member FINRA/SIPC, located at 115 West Century Road, Suite 360, Paramus, NJ 07652. Investment advisory services are offered through NPA Asset Management, LLC. Insurance sold through licensed NPA Insurance Agency, Inc. agents. Frank is registered in NJ, NY, PA, FL, CT, CO, NC, OH and RI. He is also licensed for life and health insurance in NJ, NY, FL, OH and RI. The presence of this web site on the Internet shall in no direct or indirect way be construed or interpreted as a solicitation to sell advisory services to residents of any state other than those listed above and shall not be deemed to be a solicitation of advisory clients living in any state other than those listed above. Nationwide Planning Associates, Inc. and Frankly Financial are non-affiliated entities.
Copyright © 2020. Some articles in this newsletter were prepared by Integrated Concepts, a separate, non-affiliated business entity. This newsletter intends to offer factual and up-to-date information on the subjects discussed but should not be regarded as a complete analysis of these subjects. Professional advisers should be consulted before implementing any options presented. No party assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

Categories : Blog, financial planning, Financial Services

How Flexible is Your Financial Plan?

Posted by Frank McKinley on
 June 1, 2020
  · No Comments

Flexibility in a financial plan is a delicate balancing act: it is important to maintain enough flexibility that your financial plan can accommodate unexpected events that are out of your control. On the other hand, a sound financial plan needs to be firmly grounded by factors you can control.

There Are Assumptions You’ll Have to Make about Factors You Can’t Control

When you develop a financial plan, you have to make certain assumptions, many of which are out of your control:

Taxes — The notoriously complicated U.S. tax code will affect your financial plan in a number of ways. For one, your effective tax rate will change as your income changes. Also, changes to the tax code itself can affect your financial plan, often dramatically. Fortunately, changes aren’t typically made every year and, because Congress sets tax policy, most changes in the tax code are announced in advance of taking effect — allowing you time to plan for those changes.

Income — We all hope, of course, that our income will rise as we move forward in our careers. Typically, those kinds of income changes are predictable — maybe it’s a 3% raise every year or a 10% raise every three years. More dramatic yet still predictable income changes can happen when one spouse voluntarily stops or starts working.

Health — Your health and your spouse’s health is a significant factor in your financial plan for two reasons: first, because health is a big determinant of one’s ability to earn income; second, because healthcare costs are often a large expense, especially for older people. As you age, it’s important to think about changing your assumptions about your health. Maybe you reduce the income you expect because you won’t be able to work such long hours anymore. Or you increase the healthcare-related expenses you plan for.

Life — Whether it’s good or bad, expected or unexpected, events like the birth of a child, marriage or divorce, a spouse’s death, or a relocation will impact your financial plan. Some you can plan for, some you can’t; the point is to be aware that these kinds of events typically require a review of your financial plan.

Economy — For most of us, our financial plans are based on the assumption that our investments will earn a certain average return in the market. Those assumptions affect decisions we make about our plans; for example, the amount you need to save every month to retire at age 70 is larger or smaller the higher or lower your assumption about investment returns. The best way to make these assumptions is to base them on long-term historical returns in the relevant market indices.

That is not to say, of course, that these assumptions will always be correct; anyone with money invested in the stock market this year understands those assumptions can be turned on their heads in a few days. But given that we have to make assumptions, using historical returns is the best way to do it.

Be Grounded: Factors You Can Control to Keep Your Financial Plan on Track

It’s critical to know the factors you can control and to stay on track in those areas.

Live within your means — When you keep your expenses (including savings and investments) less than your income, you give yourself more flexibility to accommodate unexpected changes that you can’t control. If you have some breathing space in your budget every month, you can more easily accommodate, for example, a higher tax rate or economic downturn without having to alter your financial plan.

Have a rainy day fund — Have at least 3–6 months worth of living expenses in an easily accessible, liquid fund that you can draw upon in the event of an emergency or unexpected situation. This fund should be set aside from all other savings and investments and only used for true emergency expenses — like in the case of a job loss or illness. With an adequate rainy day fund, you can deal with unexpected events without having to dilute or erode your financial plan.Create a rainy-day fund for emergencies only

Revisit your plan regularly — The number one key to achieving your financial goals is to review and, if necessary, revise your financial plan regularly — at least once a year. That way you can make adjustments for all the factors out of your control that have changed, for better or worse.

If you haven’t revisited your financial plan in the last year,
or if you need to develop one, please contact me.

Representatives are registered through, and securities are sold through Nationwide Planning Associates, Inc., Member FINRA/SIPC, located at 115 West Century Road, Suite 360, Paramus, NJ 07652. Investment advisory services are offered through NPA Asset Management, LLC. Insurance sold through licensed NPA Insurance Agency, Inc. agents. Frank is registered in NJ, NY, PA, FL, CT, CO, NC, OH and RI. He is also licensed for life and health insurance in NJ, NY, FL, OH and RI. The presence of this web site on the Internet shall in no direct or indirect way be construed or interpreted as a solicitation to sell advisory services to residents of any state other than those listed above and shall not be deemed to be a solicitation of advisory clients living in any state other than those listed above. Nationwide Planning Associates, Inc. and Frankly Financial are non-affiliated entities.
Copyright © 2020. Some articles in this newsletter were prepared by Integrated Concepts, a separate, non-affiliated business entity. This newsletter intends to offer factual and up-to-date information on the subjects discussed but should not be regarded as a complete analysis of these subjects. Professional advisers should be consulted before implementing any options presented. No party assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

Categories : Blog, financial planning, Financial Services, Investments

Your Risk Tolerance and Retirement

Posted by Frank McKinley on
 May 26, 2020
  · No Comments

To gain a better understanding of how we’re affected by risk when building a retirement portfolio, it’s important to learn about risk tolerance and what it means for you as an investor.

What Is Risk Tolerance?

Risk tolerance essentially refers to an investor’s ability — both emotionally and financially — to deal with major upswings and downswings in the market.  If a person is said to have high risk tolerance, he or she likely tends not to worry so much about the potential risk of certain stocks or having a large amount of stocks in a portfolio. Those with low risk tolerance are on the other end of spectrum, often too cautious to deal with volatile stocks or the market in general.

Risk Tolerance and Age

While plenty of factors must be taken into consideration when considering your own risk tolerance, age is an important anchor to help risk-takers avoid getting in over their heads. This is especially true of those who are working toward building an effective retirement plan. When people are young, it makes more sense to take risks with investments than when they reach retirement age. What’s important to recognize is that risk tolerance must shift with age to avoid making costly mistakes at a time when it may be potentially too late to recover.

Adjusting Risk Tolerance

Adjusting risk tolerance means taking a realistic approach to your investments. Many successful investors find moving away from stocks to bonds is an effective later-in-life  strategy.

Once you have a general percentage figured out, take a moment to determine how many stocks will actually make up that portion of your portfolio. This can vary significantly in terms of personal preference, but often 10 stocks are mentioned as a reasonable number to hold in your portfolio. Keeping your investments to 10 or less allows you to pay closer attention to what’s actually happening with your investments.

The Importance of Working with a Financial Planner

The best way to get a better sense of what is a realistic risk tolerance for you to have at this point in life is to work closely with your financial planner.

Please call 973-515-5184 or contact me
if you’d like to discuss this in more detail.

Developing a Plan Is Not Enough

You have your investment plan in place, and you’re feeling good about it. But your job doesn’t stop there. You need to establish
regular reviews to ensure that plan is meeting your goals. Here are some steps to follow:

Review Your Asset Allocation — Begin by making sure the asset allocation you have selected still aligns with your goals, risk tolerance, and time horizon. If your allocation
in any one asset class has shifted more than 10% from your strategy, you may want to get it back into balance.

Review Your Holdings — Revisit your positions by using a variety of resources, such as analyst opinions, credit ratings, stock valuation measurements, and benchmarks. Consider whether your stock
and fund holdings still make sense for your investment strategy and still meet your expectations.

Assess Performance — If your portfolio’s performance has fallen short of expectations or your stomach can’t handle the volatility of your investment mix, it may be time to revisit your asset allocation strategy. You also want to see how your
individual investments have performed.

Financial Thoughts

Of those who filed as of late May 2019, the average federal tax refund that taxpayers received from 2018 taxes was $2,879 compared to $2,908 as of late May 2018 for 2017 taxes. However, two-thirds of households received tax cuts under the Tax Cuts and Jobs Act, while 6% paid more taxes (Source: The Wall Street Journal, 2019).

Approximately 10% of tax filers itemized deductions in tax year 2018 compared to 30% in tax year 2017 (Source: Tax Foundation, 2019).

The average inheritance is gone within five years, unless invested in financial assets or housing equity (Source: Lund University, 2019).

The average net wealth retired adults leave behind when they die by age bracket is $296,000 in their 60s, $313,000 in their 70s, $315,000 in their 80s,
and $283,000 in their 90s (Source: United Income, 2019).

Approximately 63% of affluent Americans said they were very or somewhat likely to change their personal financial plans based on the new federal
tax law (Source: AICPA, 2019).

Representatives are registered through, and securities are sold through Nationwide Planning Associates, Inc., Member FINRA/SIPC, located at 115 West Century Road, Suite 360, Paramus, NJ 07652. Investment advisory services are offered through NPA Asset Management, LLC. Insurance sold through licensed NPA Insurance Agency, Inc. agents. Frank is registered in NJ, NY, PA, FL, CT, CO, NC, OH and RI. He is also licensed for life and health insurance in NJ, NY, FL, OH and RI. The presence of this web site on the Internet shall in no direct or indirect way be construed or interpreted as a solicitation to sell advisory services to residents of any state other than those listed above and shall not be deemed to be a solicitation of advisory clients living in any state other than those listed above. Nationwide Planning Associates, Inc. and Frankly Financial are non-affiliated entities.
Copyright © 2020. Some articles in this newsletter were prepared by Integrated Concepts, a separate, non-affiliated business entity. This newsletter intends to offer factual and up-to-date information on the subjects discussed but should not be regarded as a complete analysis of these subjects. Professional advisers should be consulted before implementing any options presented. No party assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

Categories : Blog, financial planning, Financial Services, Investing, Retirement

When Stocks Drop That’s NOT The Problem

Posted by Frank McKinley on
 May 19, 2020
  · No Comments

Sometimes, when it comes to investing, volatile markets aren’t your worse enemy. You are.  Unfortunately, our brains often play tricks on us, causing even the savviest of investors to make decisions that don’t really make a lot of sense, such as panic selling or ignoring opportunities.

The problem of psychological investing traps is so pervasive, in fact, that there’s a whole field dedicated to studying it called behavioral finance. Researchers in this discipline look at the way psychology affects how we make financial decisions. Knowing about these traps can help you avoid them and make you a better investor. Here are seven psychological traps to keep in
mind.

Sunk Costs Bias — The sunk costs bias has to do with the all-too common tendency to stick with
something, whether a bad boyfriend or a bad investment, long after it’s clear that it’s not worth it anymore. Still, because you’ve invested a certain
amount of time or money, you’re reluctant to give it up. In investing, you might end up hanging on to a stock long after you should sell it in the vain hope that you’ll eventually come out ahead. But in
these cases, it’s better to cut your losses rather than to hang on to a loser.

Familiarity Bias — Most of us are biased toward what is familiar to us. We head to restaurants we’ve been to before and follow the same roads to work because we know what to expect. With  investing, familiarity bias involves favoring investments that are familiar to you. You might prefer to invest in the company you work for or big-name businesses that are in the news. That
could cause you to overlook important opportunities you don’t know as much about.

Anchoring — Anchoring is the process of getting attached to a particular reference point – such as the price you paid for a stock — and using that to guide future decisions. Or you might fixate on a stock’s previous high, even though that price was an anomaly. Anchoring is why buyers think they got a great deal when buying a car for $50,000 when the initial price was $60,000, even though the car’s really worth $40,000.

Whether buying stocks or cars, anchoring involves using a single piece of information to determine what a stock or other investment
should be worth while also discounting more relevant information, such as a company’s fundamentals or broader economic trends. Unfortunately, avoiding anchoring is difficult,
but considering all available information before choosing an investment can help.

Focusing Too Much on the Recent Past —  Recency bias is the tendency to make decisions or judgments based on relatively new or recent information. For example, during times when the market is up, people may ignore or discount the
possibility of a market decline. Or, if a certain category of stocks has done poorly recently, people may conclude that those stocks always have negative returns, even if the dip is an anomaly. You can avoid this mistake by doing your best to consider the entire universe of information at your fingertips, not just what happened yesterday.

Following the Herd – While following trends might be fine for fashionistas, it’s not always a smart investing move. Yet herd investing

is an all-too-easy trap to fall into. If everyone is telling you that now’s the time to get into a certain hot investment, you may feel you need to act fast so you don’t miss out. But just because something is popular doesn’t make it a good investment. Blindly following the herd without first consulting your own financial goals and plan doesn’t make you a smart investor.

Overconfidence — Most of us like to think we’re smarter than the average person. If you hit it big
with a certain investment, you may over-attribute that success to your skill rather than what it really is — luck. That can cause you to repeat
the same behavior again.

Panic — Investing isn’t for the faint of heart. When the market takes a sudden dip, it’s easy to
panic, which can lead you to make bad decisions, such as selling at a big loss, rather than riding out the natural hills and valleys of investing.
Making these emotionally driven choices costs you a lot of money. When making investing decisions,  make sure they’re based on evidence, not your initial gut reaction to the day’s events.
Avoiding psychological investing traps on your own can be difficult. 

phychological traps when watching the stock market

Please call me at 973-515-5184 or contact me
if you’d like to discuss this in more detail.

Click here to view our latest newsletter.

Copyright © 2020. Some articles in this newsletter were prepared by Integrated Concepts, a separate, non-affiliated business entity. This newsletter intends to offer factual and up-to-date information on the subjects discussed but should not be regarded as a complete analysis of these subjects. Professional advisers should be consulted before implementing any options presented. No party assumes liability for any loss or damage resulting from errors or omissions or reliance on or use of this material.

Categories : Blog, financial planning, Financial Services, Investments, Stocks
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