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Luna's Lessons:  How to manage your FOMO

Luna's Lessons: How to manage your FOMO

| June 01, 2018

FOMO = Fear Of Missing Out

From time to time we are asked about “hot” investments.  They come in many forms, such as trendy stocks, new industries, commodities, or even currency. Clients are looking for the green light to invest in the “hot” investment, even if it’s contradictory to their overall risk tolerance. It’s critical that you simply categorize them for what they are....speculative investments. Is it possible to earn a high rate of return in a speculative investment?  Yes, but they all have some kind of significant downside risk. For most investors, the best advice is to pass and let the trend play out. Keep in mind that, the fast price swings in commodities and currencies will result in significant volatility in an investor’s holdings.

However, if your financial plan allocates a small percentage of invest-able assets for speculation, then knock yourself out, but keep no more than 1-2% of your liquid net worth. There’s no reason to add unnecessary risk to your nest egg. Stay true to a sound, well-developed financial plan, that puts all of the financial puzzle pieces together for you and gives you the clarity you need to sleep well at night. 

The next time we meet, I'll be sharing the Waypoint Investment Process.  We've developed and refined this process to help you chart a course to and through your retirement.

Enjoy the rest of June! 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.