Fear Factor- Stocks, Bonds and Losing Principal

Fear Factor

by admin on January 28, 2010

Let’s face it: the decade from 1999 to 2009 stunk for investors (and the economy in general).

It’s kind of a lost decade, with two recessions (including the worst recession in 70 years), millions of jobs lost, and a wipeout in the stock market. Not only did most investors lose whatever profit they had made by buying and holding, stocks, bonds, mutual funds or ETFs, many lost principal as well.

When it comes to investing, the fear factor is strong. It’s easy to be afraid when you watch all of your earnings melt away in a stock market crash. And if you’re in your 50s and 60s (or older) and were counting on that 401(k) cash to see you through your golden years, your stomach has probably been churning for months.

Add the significant loss of home equity on top of your stock market losses and it’s easy to see the depths of your financial fears.

A good financial advisor is there to listen to your fears and help you think your way through them. Financial advisors (and we’re talking fee-only at the moment) are there to help you make the tough decisions and help you set aside your fears and take a more objective look at what you have and how you’re going to invest it.

Everyone panics. The trick is you have to see through the fear factor and allow your investment strategy to work for you.

Don’t have an investment strategy? Well, don’t let your fears govern your investing philosophy. Learn how to navigate today’s choppy investment waters and be a smarter, less fearful investor.

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