Rumblings of rapid gains and hot new investments can lure even the savviest of investors into making poor choices for the long-term health of their retirement plan.
The fear of missing out (FOMO) on lucrative potential gains can be completely overpowering. Remembering that financial health in your retirement years is about maintaining and sticking to a plan rather than chasing every potential growth hack being spewed by headlines will help keep you centered, avoiding potential missteps that can be detrimental to your future retirement years.
Reasonable Goals
The thought of double-digit returns and stock prices that go up and up is alluring to all investors, but it’s important to remain grounded in what is realistic in the long term.
Your financial goals and risk tolerance should guide all of the decisions you make surrounding your retirement investments. After accounting for living expenses, potential health care costs, and revenue streams that will remain consistent after retirement, you should have a clearer picture of what more you need or what you must maintain to make it through your retirement years.
If you have enough, why take a bigger risk than is necessary for the potential of higher gains, putting the comfort you’ve already achieved at risk? If you don’t have enough, and need to continue building for your retirement years, why risk what you have saved, possibly burdening yourself with an even harder road to a comfortable retirement?
Avoid Emotional Decision-Making
We’ve all done things and said things in the height of emotion that we wish could be taken back. Investing is no different.
A long-term retirement plan with long-term goals is built from your personal circumstances and what your retirement years will look like. Sticking to the strategies developed over time and with careful consideration is much more reasonable and impactful in the long-term than is allowing headlines and buzzy investments to cloud your judgment and direct your investment choices.
Speaking with financial professionals, consuming financial resources, and developing your knowledge of economic development, market trends, and varying investment vehicles will allow you to distinguish the pull of FOMO from something truly worthwhile and aligned with your personal goals.
Diversification
Diversifying your portfolio across varying asset classes will assist in reducing your risk without being detrimental to your overall ability to see returns.
A diversified portfolio might contain real estate, bonds, annuities, CDs, savings accounts, etc. Each of these assets performs differently and is grounded in different financial sectors, allowing for less risk to your portfolio should some sort of economic crisis arise.
By considering your portfolio as a diversified means for achieving your retirement goals, you can weigh the pull of FOMO-driven investment tactics and further-consider whether they align with your ongoing strategies and risk tolerance.
Even after weighing the pros and cons of a hyped-up investment opportunity and comparing it against your ongoing retirement plan, it might still be difficult to decide whether or not to pull the trigger. When needed, an experienced financial professional can help you make the final decision by offering additional perspective.
To schedule a complimentary financial review with Moore’s Wealth Management, click here or call our office at 770-535-5000, where a staff member is awaiting your call Monday through Friday, 9AM to 5PM.
Sources:
[1] https://www.kiplinger.com/retirement/sensible-retirement-planning-tips-to-fight-fomo
[2] https://mooreswealthmanagement.com/financial-planning-for-a-longer-life/
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