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One Of The Biggest Mistakes I See Investors Make In This Type Of Market


Let’s face it – 2022 has not been kind to investors. We don’t know if this is the start of a bigger decline or if it will be short-lived and the bull market is back going full force. At the same time, there is a battle waging underneath all this volatility. Mutual fund companies will tell you to ignore what is happening – don’t look at your statements. They will definitely tell you not to make any changes to your investments. After all, how would you feel if you sold something, the market rebounded, and you missed out on recouping losses? That is always the argument.


They will tell you that you cannot successfully time the market – that is why you stay invested “for the long-term.”


Let’s look at this a little differently.


First, timing the market is when you try to get out at the top before the decline and get back in at the bottom when the decline is over or vice versa. They are right – it is tough to perfectly time the market. However, that is not what we are talking about. Second, the possibility of missing out is not a reason not to make changes.

It comes down to one question.


Do I understand how much risk I am taking with my investments? Am I comfortable taking that risk?


This is the mistake I see investors make.


Investors want to adjust their risk level, but they are told it will probably be an expensive mistake and will more than likely miss out. Who wants the pressure of making that mistake?! So, they stay invested in investments that are not congruent with their risk level.


You can’t predict the market. Yet, you can control the amount of risk you want to take!


There are numerous ways to increase and reduce risk by finding out what is right for you. The mechanics of that are for another time. The point here is only to make changes when increasing or reducing your risk level.


Bob Brooks is a Financial Advisor and Host of the Prudent Money Radio show – for more information or to find out how to work with Bob, send inquiries to info@prudentmoney.com.