The Investors’ Dilemma: Understand the Psych

Have you ever worried about getting high enough returns on investments? Maintaining your standard of living at retirement? Affording high quality education for your children? Have you ever worried about the next market crash, missing out on the latest, greatest stock tip? Making sense of the all the information available or someone else having a better portfolio than you? Have you ever worried about not having enough money to care for loved one, getting bad advice and, worse yet, paying for it? Have you ever bought an investment when it was doing really well, when it was high, and later sold it because of bad performance at a low price? If you can answer yes to any of these questions, then you are in the right place.

Investing is usually done in an effort to have money to accomplish life goals and realize dreams. Knowing that we have money for the future can offer a sense of peace in the present. However, instead of bringing peace of mind, investment decisions are often complex and confusing, leading to distress, worry, and anxiety.

The Investors’ Dilemma is a cycle that explains why many investment decisions are driven by emotional and psychological biases that may be inconsistent with an investor’s long-term goals. On the one hand, investors want assets to grow to the point where enough wealth has been accumulated to meet personal financial goals. Yet, for most, this will only happen by investing money prudently. Therefore, investors need to make decisions and select strategies to maximize investments year after year. Unfortunately, the actions investors frequently take are likely to be self-defeating. Check back next week where we will review the seven parts of The Investors’s Dilemma.

About Paul Nichols

Paul is the founder of Financial Abundance, a Registered Investor Advisory firm and EDI, an Estate Planning Firm with offices in State College and Lewisburg. He has been working with individuals, families and businesses for over twenty years, including many Fortune 500 companies. He has educated tens of thousands of people through seminars, workshops and various international speaking engagements where he shared the stage with many notable individuals such as Ronald Reagan, Robert Kiyosaki (author of Rich Dad, Poor Dad), Mike Ditka, General Schwarzkopf, and Newt Gingrich to name a few.

In 2000, after many years of traveling to consult companies and individuals, Paul decided to relocate from Colorado to State College, PA (his wife’s hometown) to develop a local advisory firm.

Paul operates under the core belief that education plus understanding leads to clarity and confidence; resulting in peace of mind. He is a proud father of three and devoted husband of 20 plus years.

Some of Paul’s accomplishments:
Regular contributor to the Centre Daily Times, via the “It’s Your Money” blog
Featured in the movie Navigating the Fog of Investing
Regular contributor to Town & Gown as the publications Investor Coach
Host of the weekly iTunes Podcast, It’s Your Money
Member of the Western PA Better Business Bureau
Member of the Centre County Chamber of Business and Industry