NATURAL Nutmeg
Finance
Ask Dana! Losing Sleep Over Your Investments or Personal Finances? By Dana R. Mascalo, CFP®, RLP®, AAMS®, C(k)P
JULY / AUGUST 2022
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“Financial security, retiring comfortably, investing with peace of mind, or even designing your estate plan are very important concepts that connect our finances with our personal lives and emotions, along with the uncertainty and ongoing change in the world around us.” —Dana R. Mascalo, CFP ®, RLP ®, AAMS ®, C(k)P
R
ecently, someone I’m close to confided that they were having trouble sleeping. The reason was clear to them—it was due to the recent stock market volatility and risks they were seeing all over the news as well as seeing their account values come down from peak levels reached within the last year. When I learned that Natural Nutmeg’s topics for this issue revolved around sleep and peace of mind, I was inspired to share some helpful hints and personal observations from the last 15 years of advising private clients with their investments and overall financial well-being. Each of us have our own relationship with money. Over the years, I’ve tried to drop into the unique perspectives out there and understand what it feels like, emotionally, for the many and varying clients and personalities I’ve been blessed with the opportunity to advise. Financial security, retiring comfortably, investing with peace of mind, or even designing your estate plan are very important concepts that connect our finances with our personal lives and emotions, along with the uncertainty and ongoing change in the world around us. To this end, the following are five areas where raising your financial awareness may help you shift
from an anxious mindset to a more comfortable and grounded perspective.
1
Time in the Market vs. Market Timing
As a holistic-minded individual, I must admit that I do keep a crystal ball at my desk, and citrine crystals abound in my home and office. When considering markets and investment allocations, though, relying on a hunch or emotional jitters is not recommended when deciding whether to go to cash or to invest. There have been countless statistical studies done around the concept of market timing. The sad truth is that it seldom works. Generally speaking, the longer an investor stays the course in the market, the probability of meeting their long-term investing goals increases.
2
Buy Low, Sell High
This concept is huge and ever-present…but is much easier said than done by your average investor. I have typically observed that when people feel most comfortable investing is when the market has been in a positive, upward trend. When people want to sell, it is generally during a sharp or prolonged market correction or decline.
