When financial decisions are made from your
authentic heartfelt space, decisions will always have better long-term consequences.
When made from fear, decisions will eventually be regretted. For example, when the market declines and the fear gremlins start beating their drum, if you’re unable to connect to a place of peace and harmony, you’ll make a fear-based decision to sell out of investments and move to cash. When the market returns, as it invariably always does, the greed gremlins direct you to get back in the market. Selling low and buying high, is a dance that’s not sustainable. Decisions that are based on fear and greed inevitably will not serve you well. There is no other part of your economic life, where you will purchase a product of equal value, at a higher price given the choice. Yet that’s exactly what happens when selling low investments, and then buying back investments when they are high.
From September 1986 - October 2008, Dalbar’s Quantitative Analysis of Investor Behavior Study found 70% of average investors sold at the wrong time and as a result, underperformed others who stayed in the market. The study found 8 out of 10 of these periods would have produced better returns as soon as one year later. During the 2008 financial crisis when the market declined 30%, the investors that didn’t make fear-based decisions to sell would have fully recovered their investments by 2010.
There are seven key issues of wealth I callMoneyCapsules® which can be used as a guide to financial harmony.
Values- Cash- Return-Tax-Risk-Time and Giving.
The next time you have an important financial decision to make, here’s what I suggest.
1- Settle down by taking some deep breaths. Listening to music that settles you also can do wonders.
2- Use your heart-felt “Values” to guide you. Are your values guiding you? Fear-based decisions tend to “feel” different, than when they are values-based. With practice, you’ll become aware of the difference.
3- What are the potential consequences of this decision on key parts of my financial life- Cash- Return-Tax-Risk Time and Giving.
Have a conversation with your personal decision partner—spouse, family member, friend, or professional decision partner— financial advisor, business advisor, or accountant.
Making a heart-felt decision will always reflect your authentic financial voice.