One of the key differences between successful long-term investors and those who aren’t is that successful investors learn from their mistakes and make a commitment to never making the same mistake again. Even when a mistake results in a large and painful loss, it’s necessary to take a step back and review the actions that led to your loss. Learning what went wrong in your thinking or your planning must be reviewed so you can educate yourself on what to do better next time.

Also, never compound the errors you made by taking bigger risks in an effort to recover your money. This is addictive gambler’s behavior, not rational and emotionless investing, which is the best way to make decisions. Determine where you went astray and ensure you avoid the same mistake in the future.

Many common investing mistakes can be attributed to emotional decision-making. Whenever you make financial or investment decisions, you will have the challenge of overcoming fear and greed. Fear can cause you to run for the exits when markets decline or your portfolio starts taking losses. Greed can encourage you to chase fads and take on too much risk in the pursuit of a big score. By recognizing your emotional triggers and engaging your rational mind, you can overcome your impulses and cultivate discipline. Taking unnecessary risks can quickly destroy your portfolio.

In today’s markets, a successful long-term investment strategy can often benefit from flexibility and proper diversification. Diversification is one of the pillars of modern investment theory and can be a powerful tool for reducing certain types of risk in your portfolio. Be sure your overall portfolio contains a variety of quality investment types, including stocks, bonds, international securities, and a few alternative investments, but only if your risk profile and investment goals support them.

No matter how careful or prudent you are, you cannot predict or control future market movements. Investing by guessing and predicting is also likely to leave your ship beached. Much of the market’s volatility has been driven by economic events that are outside any investor’s control. Global economic events, natural disasters, and government activities can all cause large-scale market movements. While an investor can’t diversify away from all forms of risk, a flexible strategy can help you find investment opportunities in many different market conditions.

Since it’s impossible to predict these events, it’s important to implement an investment strategy that diversifies by industry, by risk level, by country, by investment type, and by other factors. While diversification can’t always protect your assets in times of widespread market declines, by spreading investment risk among a wide variety of securities, any one part of your portfolio may not have as much ability to bring down the value of your entire portfolio.

Working with a Certified Financial Planner® (CFP) can help avoid emotional decision-making and many other pitfalls commonly encountered by amateur investors. It’s the CFP’s job to remain focused on the long-term strategy and act as a voice of reason when emotions run high. In today’s world of high-tech investing, major financial decisions are only a click away and investors pay a high price for short-term thinking. A Certified Financial Planner® is often invaluable for answering questions, providing reassurance, and keeping financial strategies on track despite volatile conditions. A CFP is a trained professional with experience…hire the best fee-based one you can find to guide you with your investments. Why would you trust your financial future to chance?

At Synergy Financial Management, your financial goals are our priority. We start by listening to your plans for the future, and then set your dreams into short, midterm, and long-term goals.

We then create a financial plan to achieve your goals, and monitor and manage your customized financial plan for steady but cautious growth, loss protection, limited taxes, and estate preservation … assuring your financial future.

Please contact us so we can review the possibilities for securing and increasing your personal wealth while enhancing your retirement.



Synergy Financial Management, LLC

701 Fifth Avenue Suite 3520

Seattle, Washington   98104

ph: 206.386.5455

fx: 206.386-5452