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Five Tips for Wealth and Sanity

Statue with a screaming faceInvesting can be stressful, but it doesn’t have to be. Your portfolio was built for you and your goals.  Here are a few tips to help you invest wisely and stay sane during a time of market chaos. 

1)  Cut back on watching or reading financial (entertainment) media.

The financial news is entertaining, but the focus is on short-term trends and hype. Sure, you need to keep up with general economic and business news, but it isn’t wise to trade on every piece of information that you come across. Print media tends to be less sensational than TV programs.

2)  Stop checking your accounts online every day.

By being our client, you have a properly diversified portfolio, built for you. Focusing on daily changes in your account value is likely to tempt you to want trade too much, sell your portfolio and/or lose sleep. Making frequent transactions, hoping to profit from price swings will increase your trading fees but may not have any tangible results. Avoid making emotional decisions and wait for your monthly statement to arrive. As a disciplined investor, you need to tolerate volatility. This gives you more peace of mind, too.

3)  Focus on the bottom line, not individual investments.

If one investment is doing well and the other is doing poorly, what should you do? The answer may surprise you. You should probably sell some of the investment that went up and buy more of the poor performer. It seems counterintuitive, but this is “buy low, sell high” in a nutshell. If you focus on the value of your portfolio as a whole, you won’t be tempted to make poor trading decisions, like selling lagging stocks out of fear.

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4)  Create a plan and follow the rules.

One of the biggest mistakes that investors make (but not our clients) is failing to make a disciplined plan. Choose your overall asset allocation, such as a mix of stocks, bonds and alternatives, and stick with it. Check your portfolio every three months to see if your account has fluctuated away from your original plan (say, 60% stocks, 40% bonds). If needed, we can make changes to bring your account back to the proper proportion. This is called rebalancing, a fantastic risk management tool.   

5)  And the most important tip of all? 

Call us before you make a major financial decision!  Seeking our advice is why you hired us.  If you need a sounding board or a calm voice doesn’t mean you are not smart enough or capable enough to figure it out on your own. We have been here before and we know how to help you understand how any market volatility impacts you personally.  We are here to help you update your plan and offer unbiased advice about your portfolio.


This document is provided by Herr Capital Management, LLC is educational in nature, is not individualized, and is not intended to serve as the primary basis for your investment or tax-planning decisions. Certain information herein has been obtained from third-party sources believed to be reliable, but we do not guarantee or warrant its completeness or accuracy. 

Herr Capital Management, LLC - Where Prosperity Begins © 312-697-1600 Securities offered through American Portfolios Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Herr Capital Management, LLC, a registered investment advisor independent of American Portfolios Financial Services, Inc. Investment products are not FDIC insured and involve investment risk including the loss of principal invested. Please consult your tax consultant for tax advice.

Any opinions expressed in this forum are not the opinion or view of American Portfolios Financial Services, Inc. (APFS) or American Portfolios Advisors, Inc.(APA) and have not been reviewed by the firm for completeness or accuracy. These opinions are subject to change at any time without notice. Any comments or postings are provided for informational purposes only and do not constitute an offer or a recommendation to buy or sell securities or other financial instruments. Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.