Financial Planners Ft Myers I Psychology of Market Volatility

Most long term investors try not to get caught up in the day to day movements of the market. However, with all of the volatility of late and every business cable television station running night time specials it becomes quite difficult to stay on track.

When it comes to investing human beings tend to be at a disadvantage to computers due to the fact that they tend to let their emotions get involved in the decision making process. Specifically, we act on the same two emotions of fear and greed, which the market operates on.

When the market heads considerably lower in a short period of time we tend to start second guessing our investment philosophy and react to the short term noise. As long term investors we should be looking at temporary pullbacks as potential buying opportunities or possibly a good time to rebalance, but our minds tell us to focus on the present. This shift in psychological sentiment often causes people to sell rather than buy at the lower prices. Computers on the other hand can be programmed to trade off of algorithms so that emotion does not get involved. They don’t allow fear to enter into the decision making process because they simply buy and sell at their respective price points.

Now, let’s take the example of going shopping at your favorite store. You walk in and the entire store is having a 25% off sale! You are probably going to be inclined to purchase more than you might have otherwise. By taking this same approach to investing you can often find bargains in and amongst all of the noise on Wall Street.

Turn the situation around to the upside. When the market is catching a bid and moving higher it becomes very difficult to force ourselves to sell and take profits. Once again, computers don’t experience emotions, thus they may choose to sell at the higher prices. We have all probably told ourselves at some point, “When my position gets back to breakeven, I’m out.” Well, unfortunately volatility may or may not give us that chance.

The moral of the story is to not let your long term investment planning be altered by the day to day movements in the market. However, sometimes it may be prudent to think like the computers and use the momentum swings to go shopping or take profits. As a wise man once told me, “Try and eliminate the emotions from your decision making process.”

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Financial Planners Ft Myers | What Is Estate Planning?

Estate planning is the act of trying to make sure that after you pass away or become incapable of making decisions that your estate will be managed, or dissolved, specifically according to your wishes. Generally, the plan is to keep taxes, fees, and other expenses to a minimum, while maximizing the portion available to the estate/beneficiaries.

Estate Planning Items for Consideration:

• Wills
• Trusts
• Property Ownership
• Beneficiary designations
• Powers of appointment
• Power of attorney (financial/medical)
• Living will
• Burial or other arrangements
• Charitable remainder trusts
• Personal residence trusts
• Guardianship

Everyone, regardless of the size of their estate, needs an estate plan. An estate plan will allow you to designate who you want to manage your assets if you are not able to do so, make health care decisions, and decide how you want your property, cash, and assets disbursed and distributed.

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Financial Planners Ft Myers | What Is A CERTIFIED FINANCIAL PLANNER™ Professional?

 A CERTIFIED FINANCIAL PLANNER™ Professional is an individual who has satisfied the education, examination, experience, and ethics requirements from the CERTIFIED FINANCIAL PLANNER Board of Standards, Inc. In order to obtain authorization to use the designation a CFP® Professional must ...

• Meet specific educational requirements including a bachelor's degree (or higher)
• Pass a 10 hour test.
• Work 3 years in a "qualifying" position in the financial planning field.
• Pass a background check, pledge to follow a strict code of Ethics and Professional Responsibility, and comply with the Financial Planning Practice Standards.
• Once certified, fulfill mandatory continuing education requirements.

The CERTIFIED FINANCIAL PLANNER™ Professional certification is a recognized standard of excellence for comprehensive personal financial planning and indicates a high level of competence and ethics. It is a prestige credential that validates, enhances, and legitimizes the worth and credibility of those authorized to use it.

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