I didn’t coin the phrase, but I like the title. Not because it’s salacious, but because it describes investor behavior. Financial pornography:

  • Sets unreasonable expectations of what your investment portfolio should look like and how it should perform.
  • Makes us disappointed when our expectations are not met: We blame our portfolio or our advisors rather than looking at our own behavior
  • It’s addictive: Once you start reading it, it is difficult to ignore.
  • Feeds our ego: We feel smarter than everyone else when we pick correctly. Strangely it never reminds us of our failures.

Case in point is the market in 2013. Late 2012 showed prognosticators calling for a new recession in 2013. Time had an article headline that read “Why Stocks are Dead.” So what did 2013 actually do? It only had it’s the best single year since 1997 with a total return in excess of 32%. One Forbes article had 2013 DROPPING 42% (that’s more than 100% inaccurate for those of you keeping score at home).

So what is an investor to do? Consider your trip to a professional financial advisor your first step to recovery, like a 12 step meeting. Even if you’re just as smart as they regarding investment matters, you will be better off taking yourself out of the equation. Statistics show that individual investors buy when they should sell, and sell when they should buy. It’s that whole emotion thing (think greed and fear). If you don’t have an investment advisor, Core Wealth Management would love to talk to you without obligation. In fact, if you contact us here, and we’ll send you the book The Investment Answer free.

You can further about predicting markets in my article What are 7 Billion People Eating for Breakfast.

You can also continue in our Spring Core Wealth Management Newsletter

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