I’ve heard the title of this article (or a variation of it) quite a few times from those who might consider themselves “knowledgeable” in financial matters and, of course, from those who would probably not be considered part of the “in-the-know” financial club. I’ve been following investing since my early 20’s and been a practicing financial planner/advisor for 9 years now, so this one always grabs my attention no matter how many times I hear it. Recently someone I know heard someone else (not using names to protect identities) utter the familiar phrase, “we talked to so-and-so and they know that the stock market is going to crash”.
Biggest question that I have for that person: When?
By the way, the “so-and-so” authority this person spoke to probably has NO experience in these matters at all (not by profession certainly) and how come his/her crystal ball works so well & mine doesn’t? Reality check: anyone who claims to know for a fact that the stock market will crash can only be right once in a blue moon. Anyone who keeps guessing the market will crash EVERY single day will be right eventually (what about all of those positive days, which far outweigh the negative market days?). Those are people who should not be trusted because they belong in the same category of “advisors” who guarantee certain returns for their clients on equity/bond/mutual fund/ETF investments – not possible to know for sure, people!
Unfortunately, too many people – those not wise enough to know how to invest properly – invest based upon feelings of fear & greed, which will always cause rash decisions to be made AND $ to be lost. If you randomly listen to anyone with an opinion on the market, stock investments, etc., you’re bound to get some bad and (possibly) some decent advice.
Never base your financial future on what some random person thinks the stock market may or may not do. Talk to a true financial professional – a fiduciary such as a CPA who is knowledgeable in investing matters (ex: my business partner), an experienced financial professional who works for an RIA firm (NO pay via commissions & has a fiduciary responsibility to all clients – ex: the author of this article) – these are the types of people to help guide you properly with your financial plan in mind.
If you don’t have a financial plan, what good are those market investments going to do you if you don’t have a realistic goal with a target date and a dollar amount? Oh wait, they are DEFINITELY going to crash so it doesn’t matter! Sounds like sound advice, right? Think about that next time you hear someone say that they know WHEN the market will crash!
Do yourself a favor – make yourself a budget (I know – it’s hard but so is anything worthwhile) and after you do that, construct a financial plan for your future (see above blurb about being difficult). Get help from a qualified financial professional (ex: fiduciary) if you need it (reality check: most people who read this WILL need help, whether they’d like to admit it or not) because you can then be prepared for that market crash that will definitely come….someday.
Find an experienced financial advisor who helps clients create budgets AND financial plans on a regular basis, works for an RIA firm, earns his/her money from fees (NOT commissions), believes in having an abundance of investment choices for clients, and has the heart & demeanor of a teacher – NOT a salesman – and chances are you’ve found the right financial advisor to help you prepare and plan for your future.
To learn more about Martin Federici, view his Paladin Registry profile.
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