Andy Upchurch, RHU, REBC
Throughout my career, I have dealt with a number of preconceived notions regarding “prudent” financial decisions. But as the title of this article suggests, many of these widely held beliefs are not entirely accurate. The following are five of the biggest myths I have dealt with among clients and prospective clients in the past 25 years.
“Market timing is the way to go. Buy low and sell high.”
I’ve often told clients, “If there were actually a formula for successfully timing the financial markets, there would be a lot more rich people.” I once heard Peter Lynch, one of the most famous institutional investors of our time, say, “I can’t recall ever once having seen the name of a market timer on the Forbes annual list of the richest people in the world. If it were truly possible to predict corrections, you’d think someone would’ve made billions by doing it.” It’s hard to argue with that logic.
What is the solution here? Long-term, properly-diversified, and disciplined investing. Take advantage of institutional investment platforms that are available to you. Those platforms can help you obtain a level of diversification that is nearly impossible for the individual investor to capture alone. In a recent portfolio review for a client, I was able to show how he could invest in a portfolio that would own more than 11,000 different securities, 35% of which were outside the United States. These types of platforms are available for as little as a $10,000 investment, and they take market timing out of the equation. They offer you the ability to diversify your portfolio both globally and with an increased number of holdings, which is very difficult to achieve alone.
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