This Week’s Blogger: Scott D. Heins, CFP®, IAG Chief Investment Officer
Hiking through deserts poses a real threat to your physical and mental well-being if you do not plan ahead. High temperatures, low humidity, and a noticeable lack of bubblers create just the environment to whither with your body and mind.
For those who choose to hydrate ahead of time, wear appropriate clothing, and pack sufficient quantities of water, a hike through a desert area can be both beautiful and safe.
For those who fail to take the necessary precautions, it can lead to hallucinations or death.
In the movies, the most common hallucination for ill-prepared desert wanderers is an oasis. As the sun bakes the sand, waves of heat distort the horizon into what your mind wants most – water and shade.
This mirage brings temporary hope and joy followed by bitter disappointment.
A market fearage is the opposite of a mirage. It brings temporary panic followed by bitter disappointment.
Fearages are created by unending pessimism baking the logic out of one’s mind. This causes waves of panic to distort the horizon into what the mind fears most – account values that decline forever.
Fearages are powerful hallucinations that can cause usually stable investors to liquidate the assets that have temporarily declined in value, leading to bitter disappointment when those assets eventually bounce back in the following years.
Fearage victims are typically unprepared for the environment they are experiencing. Perhaps they have failed to set aside enough boring cash to make it through this temporary financial market drought. Perhaps they never bothered to craft a plan and consider themselves a victim of circumstance. Perhaps they simply forgot that markets regularly go down before they eventually go up.
As we travel through this barren wasteland of a year, be thankful for the well-laid plans you had the foresight to develop for times just like these. Your steady plan should be all you need to avoid falling victim to a fearage.
Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through IAG Wealth Partners, LLC, (IAG) a registered investment advisor and separate entity from LPL Financial.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.
Any opinions are those of IAG and not necessarily those of LPL Financial. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. No strategy assures success or protects against loss. Investing involves risk including loss of principal.
Quote of the week:
Warren Buffett: “Be fearful when others are greedy. Be greedy when others are fearful.”
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