There’s a common misconception amongst investors at all levels that financial service providers offer a secret path to beating the market. In reality, beating the market is a game of luck at best, and most advisors, no matter how good, will not be successful when trying to beat the market.
When it comes to financial services, the focus should be on long-term strategy and determining clear financial goals. If you plan to retire in the next five years, your advisor might start to recommend moving your money to stable investments that won’t gain or lose much over time, keeping your money “safe.”
On the other hand, young investors often have a bit more room to take risks. When trying to build wealth, advisors might focus on healthy ETFs that are known to have double-digit returns over a 10- or 15-year period.
Every investment strategy will be different; a tailored approach is what the best advisors will offer. However, smart advisors and savvy investors know that investment strategies should have common threads no matter what the financial goals are: calculated risks, financial hedging, and non-emotional trading.
Sometimes, the job of any financial service professional is to talk their clients out of making a decision based on fear, excitement, or any other emotion. Stop thinking of the market as your adversary and start thinking of it as a tool to reach your financial goals. Once investors and financial advisors align on that mentality, success will come.
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