It is customary in the financial services industry for companies to publish their predictions on what they think the markets will do over the next 12 months. So naturally, at Client Care, we would love to sound as smart as these “experts”; however, conscience prevents us from joining the circus, even after hours of staring into our crystal ball (yes, we have one).
This practice of forecasting the markets over the short term continues mainly for the following 2 reasons:
- clients want comfort and certainty, albeit false and baseless
- advisers/brokers think that this is how they add value to their clients and what is expected of them
The irony is that most people know that investing is a long-term game of temporary lows and permanent highs, but still, they want short-term certainty. This is an emotive issue. A good lifestyle financial planner will have educated their clients that these lows will happen from time to time and then help them through these trying times.
The graph below shows a client’s monies which have been invested in very basic inflation-targeting funds for the last 20 years through many market crashes, which very few saw coming. The outcome shows that simply focusing on the long term has reaped fantastic results.
Start the new year by ensuring that you have a long-term lifestyle financial plan that is entirely personal for you and your family. A plan that reflects all your wants, needs and desires that make you unique. This should be the first thing you have in order before considering your investment strategy, which should ensure the outcomes that will make you live your best life.
Beware the “experts” who claim to know what will happen in the markets; their focus is your money, not you. While your money is very important, no one controls the market.
It’s never too late to start planning, and as we know, failing to plan is planning to fail. So give us a shout. We can help.
Dirk Groeneveld, Certified Financial Planner
t. 083 261 9287
Client Care Lifestyle Financial Planning
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