Why working with a planner when investing is more important than ever

May 10, 2022

In recent months, it can feel like the headlines are full of bad news. From the coronavirus pandemic to the war in Ukraine, it can be easy to worry about how these major global changes are going to affect you and the wealth you’ve worked so hard to build.

Of course, when you’re stressed, it can be easy to get into a defensive mindset and make knee-jerk decisions regarding your finances. Needless to say, while doing so can help you to feel more in control, it could seriously affect your progress towards your life goals.

At a time when there’s so much going on in the world, working with a financial planner can really benefit you, so read on to find out how.

It can be easy to feel overwhelmed by major world events

In theory, being a successful investor is the easiest thing in the world. Do some careful market research, invest in some reliable and profitable companies, and then sit back and wait for your wealth to grow. As you’ll know, however, things are rarely so simple in practice!

One of the many benefits of the internet is that it is easier than ever before to stay informed about financial affairs. With a few clicks of your mouse, you can access more information in just a few moments than a stockbroker in the 1980s could have in several days.

Of course, this is something of a double-edged sword as it can be easy to get overwhelmed by the sheer amount of data. With breaking news delivered right to your phone and various financial experts giving their varying and often contradictory views, it can be hard to know what to think.

This is especially true when you take into consideration the human element. In recent months, there have been a variety of major world events that have startled markets, from the coronavirus pandemic to the ongoing conflict in Ukraine.

When you’re stressed, it’s understandable that you might make some emotional decisions when it comes to your finances. Of course, while this might give you a sense of control, this could mean that you don’t make a fully rational decision that’s right for your needs.

In fact, sometimes the biggest threat to your finances isn’t actually the events themselves – it’s your reaction to them.

Making knee-jerk reactions can hurt your progress towards your financial goals

While the internet can help you to overcome the mathematical and logistical aspects of investing, it does little to help the emotional ones. As the economist Benjamin Graham famously put it, “The investor’s chief problem, and even his worst enemy, is likely to be himself”.

As we touched on in our previous article about loss aversion, if you want to build your wealth over time, one of the most important skills is the ability to keep a cool head in stressful situations. This can help you to avoid panic and make clear and rational choices when you need to.

If you can’t, you may find that you make spontaneous reactions when problems arise, and this can affect your progress towards your financial goals. For example, if the value of one of your assets falls suddenly, you might be tempted to make a spur-of-the-moment decision to sell it.

While doing so can avoid the risk of it falling in value further, this may not be the right decision for you. Instead, it may be better to hold onto it, as its value may recover in time and continue to grow.

With so many major world events happening around us, it’s understandable that you might be concerned about your financial future. If you are, and want to gain more peace of mind that you’re making the right decisions, it can be beneficial to seek professional advice.

Working with a financial planner can help you to make informed decisions

There can sometimes be many bumps on the road to success, but how you navigate through them is what really matters. If you want to be able to reach your long-term goals, being able to make clear and rational decisions about your wealth can really help.

Working with a financial planner can enable you to make informed decisions, giving you a greater sense of confidence when you invest. For example, they can act as a useful sounding board when you’re considering an investment, weighing up the pros and cons of the decision.

When you do encounter a disruption, such as market volatility, a planner can also help you to see it in the wider context of your financial plan. This can be useful to avoid making knee-jerk decisions based on emotion, rather than logic.

Above all, working with a financial planner can enable you to grow your wealth with confidence, secure in the knowledge that you’re on track to reach your goals.

Get in touch

If you want to be able to make informed decisions when investing, we can help. Email us at hello@ascentawealth.com or fill in our online contact form to organise a meeting and we’ll get in touch.