Shhh…The One Question You Don’t Ask Your Investment Advisor Now and the 3 Questions You Should
Scene 1, Act 1, Action!
“When will the markets recover?”
Well, everything depends on the next Fed meeting. If they continue to hike the interest rates…If they don’t….
Cut!
Scene 1, Act 2, Action!
“When will the markets recover?”
Oh! That’s easy. This market correction is driven by fear and the fundamentals are still strong. Things should be back to normal by June.
Cut!
Scene 1, Act 3, Action!
“When will the markets recover?”
Hmm…well…your guess is as good as mine.
Good Take!
It’s been said that knowledge is knowing what to say and wisdom is knowing when not to say it.
If you have an investment advisor, I’m sure there are many questions you will want to ask. After all, the reason we all use an advisor is so that we have someone to talk to and have our doubts clarified. However, very often, we don’t make the full use of our advisors because we ask poor questions.
Wait…aren’t all questions good questions or as we are told in school…there is no such thing as a stupid question?
That’s true and I’m not referring to asking questions which are obvious or basic. If they are the right questions, there’s no shame in asking.
What I’m referring to are questions where even the most brilliant investment advisor have no way of knowing the answer. These are questions where the answers are unknowable to begin with.
My favorite or should I say least favorite one is this…
“When will the markets recover/correct?”
The reason this is a poor and common question is that it focuses on all the things nobody has any control over even if logically, knowing when the markets are going to recover or correct will help us to decide when to buy or sell.
Investing, like golf, is very much a game of imperfection. The less mistakes you make, the better your chances of winning. The way to win a game of imperfection is to focus on the things you can control and not hope to win because other competitors had a worse day on the greens than you.
Here are my 3 favorite questions because they focus on the 2 things that really matter when it comes to investing – What you can control and more importantly, You:
1. Is my investment portfolio suitable for my profile?
Take enough risk to give you an opportunity to profit but not so much that you lose your mental peace
2. Am I still well positioned to meet my goals?
The end of investing is being able to meet a clear objective financial goal – that number, not the current markets, should decide if you are correctly positioned
3. How much should I be investing to meet my goals?
There are 4 factors that affect your investment performance – How much you invest, How often you invest, How long you invest and the Rate of Return. Focus on the ones you can really control.
Good luck with the questions and may they bring you all the right answers!
Article by Lee Meng Choe
Email: mengchoe.lee@gen.com.sg
The writer is the Executive Director (Distribution) of GEN Financial Advisory
