What Drives Investment Decisions
What drives investment dollars? Greed? Yes. Fear? Yes. Conservative/aggressive tendencies? Skepticism (who's trying to steal from me?) Anxiety? We are all intrinsically tuned in to WWIFM (What’s In It For Me).
How often have you or someone you know held on to an investment for emotional reasons out of FOMO (fear of missing out) or FOL (fear of losing)? I know I had. I’ve made the worst investment decisions when emotions were involved. Isn't that human nature though?
I've heard it said that the best investments are the ones you have outside advisors help you make. Ultimately, you make the decision, and the advisors are there to help you remove the emotions from your decision-making.
It's also been said that the worst thing you can do is allow someone else to manage your money so that you can do better on your own. Yes, in many cases that may be true. In others, perhaps not.
The other problem is that oftentimes, investments are being sold by someone. They stand to make a fee or commission and that tends to rub investors the wrong way. "Why should they make that kind of commission on MY MONEY?"
Let's think about this for a second. The "advisor"/salesperson has a full-time role of putting deals together that may take the better part of 6 months to a year before presenting an offer to invest. They haven't been paid and have often laid out a hefty sum of their own money to put the deal together.
When a five or even a six-figure commission is paid on that deal, that money is the individual’s wages. The investor is putting money that he is not living on into the deal for a handsome reward. There would be no stock market, no real estate market, no storage units, no crypto, or any other type of investment if someone hadn't put it together first. Yes, they get paid for their work too.
Right now FEAR is winning the day. Investment decisions are being made out of Speculative FEAR. Only a few months ago, decisions were made from Speculative GREED. Yet, the same unwritten future lies ahead. Most economists can project within a margin of error, into the next 2-3 years comfortably. Look 5 years out and a lot of stuff can happen.
Stop relying on FEAR or GREED as they are your worst advisors. You will make your biggest mistakes with them at the helm of your decisions.
To learn more about alternative investments that are “Done For You”, meaning truly passive, drop us a line. We would love to connect and share how we are putting deals together that are beating Wall Street.
Welcome back to Main Street! It's time to put your money to work for real.
