7 Minutes
When markets are going crazy and you’re hearing lots of noise in the media, it’s hard to stand your ground. After all, as humans, we’re hard-wired to avoid the pain of loss. And, if everyone else is reacting to the noise, there must be some truth to it, right?
But in fact, investors often shoot themselves in the foot when trying to ‘time the market’ because:
- When the market is going up – we’re greedy. We want in on the next best thing. But we can often end up paying too much.
- When the market is going down – we’re scared. We’re panicking – we want out. We end up selling for less than we bought, cementing our losses and missing out on the opportunity to take advantage of any future upswings and corrections.
In today’s hyper-connected world, it’s increasingly hard to tune out the noise. So, having a trusted investment partner by your side, who understands your values and goals, and can help you avoid costly ‘emotionally-charged’ decisions is a very smart move.
The typical financial advice we have seen been given to doctors is recommending a Wrap Account solution and usually the narrative conveyed to doctors is that they gain more “transparency” on their investments implementing these recommendations.
As a busy clinician, when was the last time you checked your super? Other than an annual review from your financial adviser (if that), do you have a clear objective and direction on what your investments are for and what they are doing? How are they going to help you when you retire?
You would much rather to remain in your industry super fund if your current financial adviser/accountant cannot explain any of these to you. We have seen a very common, blanketed and numerous trends for recommendations for SMSF and acquisition of properties by other advisers when clients come to us.
Specially when doctors accumulate a reasonable balance in their retirement account. Often, these recommendations were given to doctors by selling the statements such as “property will perform”; and lacks significant objectivity.
Our investment recommendations for our clients at Elixir Wealth Advisory follows a crystal clear and comprehensible methodology; and are based on
The financially aware medical professionals generally are not influenced by recommendations and opinions with no grounds of research and demonstrated value. They avoid the significant cost of emotionally acting when it comes to acquiring investments or assets including real estate.
Most financial advice firms discuss the “potential” performance of investment recommendations to an arbitrary benchmark or some doctors compare their investment performance with their colleagues. We have even recently noticed some IMGs look for investment advice on “closed social media” groups from their colleagues or people who have no expertise or background in finance, taxation laws or essentially anything to do with money.
Investing is Simple, But Not Easy.
This is an illustration of a dynamically designed portfolio with strategic asset allocation. It is for demonstration only and should not be taken as financial or investment advice.
Savvy doctors:
- Are clear about why they invest in the first place (and minimising tax is not a good enough reason)
- Ignore the noise
- Have a plan
- Have an exit plan (particularly if they own and run their own practices)
- Are wary of ‘popular’ investments – but engage with investment professionals and stress test their decisions
- Are open to bargain
Talk to us about what we can do for you, particularly if you are an IMG and have been reading “social media” advice.
