I wonder how many investors are financial tourists.
What do I mean by a financial tourist? Well, that would be someone who has an interest in investing and, consequently, kind of sort of, window shops a bunch of different investments and chooses some here and some there. Their portfolio is like a grab bag of random souvenirs. Imagine someone on a casual vacation; a person goes somewhere and just kind of looks around and decides to see whatever moves them at any given moment and, perhaps, buy some bric-a-brac to remember what they did.
The financial tourist is a dabbler. The financial tourist is a dilettante. The financial tourist has no plan other than knowing they need to be saving money and investing. Unfortunately, they do this in a chaotic way. Certainly, they are better off than the folks who save no money at all. However, they have no real plan as to what they should be doing. And the results speak to that.
When it comes to travel, what happens to lots of tourists who have no plan? They end up visiting tourist traps. They end buying low quality merchandise at schlock souvenir shops, for too much money. Or they end up buying low priced items, thinking they got a bargain, only to get home and find what they bought is already broken, owing to its low quality. Additionally, they miss out on having visited some incredible sights, because they failed to plan.
We go on vacation to get a break from our day to day grind. We go on vacation to relax. We go on vacation to get away from it all. Should we be blamed if we do not plan our vacations with the kind of precision that NASA adheres to when planning and executing a space mission? We know the answer to this. True, it’s better to plan a vacation then not, yet this is not the most important thing on earth.
Sure, if we plan our vacations – at least to some extent – they will probably end up being more enjoyable and we are less likely to get taken advantage of, at least in my experience. So planning can serve as a plus, even when it comes to traveling.
That said, investing isn’t vacation! We do not have the luxury to make our investments by the seat of our pants, not if we want a portfolio that will really accomplish what we want it to. Investing willy-nilly, without contemplating how a new investment vehicle fits in with our current investments does not seem like an optimum way of going about things. An investment portfolio works best – in my humble opinion – when it is properly planned and properly diversified.
Remember that old expression about proper planning preventing poor performance? Take that to heart and begin planning your investments and working toward understanding how to best to blend them for the results you are looking to achieve. You may want to discuss this with a financial services professional, whom you trust, to get this done.
Act now. You will be glad you did.
Scott R. McGimpsey July 27th, 2018
This material was prepared by Scott McGimpsey and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources, however, we make no representation as to its completeness or accuracy. Neither Summit Brokerage Services Inc. nor Scott McGimpsey is engaged in rendering legal, accounting, or other professionally services. If such assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any federal, state, or municipal tax penalty. Moreover, a diversified portfolio does not assure a profit or assure protection against loss in a declining market. UNIFIED PLANNING GROUP is an independent firm with securities offered through Summit Brokerage Services Inc., Member FINRA, SIPC