What Are You Buying?
Have you ever been asked this question?
I hate this question- for three primary reasons.
1. The cart before the horse: The question presupposes that you have an investment strategy in place. This question should only be asked once you understand your investment style.
2. Context is everything: A 35 year old single person is in a different life situation than a 42 year old married person who is in a different situation than a 58 year old widow. Where you are in life should ideally dictate what you buy. This reason dove-tails with reason #1.
3. Missing the boat: How many people tell you about their investment losses? I suspect very few. But people will tell you about their successes. However, by the time they do so, the investment product will most likely be a lot more expensive than when they bought it. In many respects, the answer to the question will be: a really expensive product.
Because of what I do, I always believe that you should always answer "where do I want to be?" before "how do I get there?" but we sometimes chase the glitter before knowing whether we want it or not.
So before we ask others what they are buying think about a strategy first. In the next post, I'll share my worse investing mistakes- many starting from the fact I asked "what are you buying" before figuring out what I wanted.
I hate this question- for three primary reasons.
1. The cart before the horse: The question presupposes that you have an investment strategy in place. This question should only be asked once you understand your investment style.
2. Context is everything: A 35 year old single person is in a different life situation than a 42 year old married person who is in a different situation than a 58 year old widow. Where you are in life should ideally dictate what you buy. This reason dove-tails with reason #1.
3. Missing the boat: How many people tell you about their investment losses? I suspect very few. But people will tell you about their successes. However, by the time they do so, the investment product will most likely be a lot more expensive than when they bought it. In many respects, the answer to the question will be: a really expensive product.
Because of what I do, I always believe that you should always answer "where do I want to be?" before "how do I get there?" but we sometimes chase the glitter before knowing whether we want it or not.
So before we ask others what they are buying think about a strategy first. In the next post, I'll share my worse investing mistakes- many starting from the fact I asked "what are you buying" before figuring out what I wanted.
Labels: Investment strategy
0 Comments:
Post a Comment
<< Home