The advisors at Waypoint enjoy living active lives and like to experience the outdoors. Two advisors, in particular, love to play disc golf (frisbee golf). They have travelled all over the southeast, braving all forms of inclement weather, to play disc golf. On one trip to a course in North Carolina, one of the advisors asked the other what life after Waypoint would look like for them. The advisor answered that he would love to travel to all parts of the world and play disc golf. Then that advisor returned the favor and asked the other advisor about life after Waypoint. He said that he would love to sit on his back porch drinking warm apple cider and watch the moon rise over the mountains. Then the discussion turned to how would each of them accomplish these visions for life after pharmacy.
Being a prudent investor is essential to a successful retirement. The key word here is prudent. The reason that this word is chosen is because we live in a dynamic world where things change all the time. Understanding this can help you be a more successful investor and achieve the life you envision for retirement. However, you need to avoid a few traps along the way. Below are three traps that you must avoid to be a successful prudent investor.
The next big thing - this is one of the biggest issues for investors. Everyone is always looking for the next big thing. Unfortunately, that doesn't exist. Do not be fooled by a company marketing they have the next big thing. They can make any idea look like the next big thing. Prudent investors remain disciplined in their strategy and are not tricked into looking for the next big thing.
Emotions overiding discipline - this is another issue that investors face when thinking about retirement. There is a lot of new research out now about how emotions affect investing. Investing is an emotional subject and there will be times where you will want to make emotional decisions about investing. As was mentioned above, prudent investors remain disciplined in their strategy no matter what their emotions are telling them (an investment policy statement can help with this)
Not setting proper benchmarks - investors are trained to look at the bottom line when it comes to investing. This isn't necessarily a bad thing. However, comparing the performance of the funds to their proper benchmarks may lead to the prudent investor seeing that some of the funds are not performing up to the proper standard. This will allow the prudent investor to make the necessary changes to his or her portfolio.
Understanding and avoiding these traps is a great start to achieving the retirement you have always envisioned. You must begin to think about these traps and how to avoid them immediately. You cannot replace lost time and getting started too late will cause you to not achieve the retirement you want no matter how you invest your money.
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