When it comes to our financial nest eggs, we all want to make the best decisions possible. Scouring information sources often seems like a good place to start – if you know how to sift what you find.
A common question: “What book, paper or website do I read to better understand retirement planning?” In this era of unprecedented access to data, information can be a tricky resource.
Books, blogs and news sites aim to explain varied aspects of investing such as how options, stocks and even trading exchanges work. We refer to such content as resource information, and this fundamental core knowledge is largely timeless.
Other investment information is more subjective. Books exploring past market events are naturally mixed with facts as well as with author bias.
Several books about 2007’s Great Recession, for instance, address the same historic happenings but draw dramatically different conclusions. Similarly, books about the Great Depression of 80 years ago offer disparate perspectives on the conflux of economic events and outcomes.
Guard against viewing one author’s opinion as the ultimate authority. If his or her premise is flawed or downright wrong, you might inadvertently jeopardize your nest egg.
Information accessibility doesn’t always equal information integrity; just because you can click an article open doesn’t mean it’s all true. Search engines such as Google often retrieve the most relevant, not necessarily the most updated and timely, data for a given term.
No one can digest all of the information available online and on paper these days. As advisers and analysts, our team filters the flow of data, focusing on sources that we trust and verified over time. Similar to placing trust in a particular brand name, our research analysts rely on independent sources that earned our trust.
What should you, the non-professional investor, read? We can recommend no single title or news source, as every situation is unique. The fees that professional advisory firms pay for trusted sources are also too expensive for the average investor. Sure, free research abounds, but you very much often get what you pay for.
Focus on building a process of investing, rather than accumulating data. In The Millionaire Next Door, a perennial bestseller among amateur investors, author Thomas J. Stanley studied individuals who bought and held stocks for many years or even decades. These individuals became rich buying and holding, not through trading.
Stanley failed to look at the poor folks who bought and held stocks that tanked. Next Door delivered a great tale and encouraged many to follow one path of investing success. A lot of copies sold.
Not everyone who buys and holds will win.
Regardless of the many contradictory sources and viewpoints tugging at your attention, your best strategy is develop and stick to a methodology of saving and investing. Above all, reading some of the daily avalanche of financial news and opinion must support your intentions to put money toward your long-term goals.
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Joseph “Big Joe” Clark, CFP, is managing partner of Financial Enhancement Group, LLC, an SEC-registered investment advisor. He is the host of “Consider This” on Indiana’s WQME and is also is a former adjunct assistant professor at Purdue University where he taught the capstone course for a degree in financial counseling and planning.
Securities offered through World Equity Group, Inc., member FINRA/SIPC, a broker dealer and SEC registered Investment Advisor. Advisory Services can be provided by Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated and are not affiliated. Tax advice provided by CPAs affiliated with Financial Enhancement Group, LLC. Big Joe can be reached at [email protected], or (765) 640-1524.
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