Sketch

You and The Big Mistake

At some point, all investors face what New York Times Columnist Carl Richards calls “The Big Mistake.” Otherwise known as buying high and selling low. It’s only natural. When the market drops, our instinct is to sell now and stop the pain. When the market shoots up, we tell ourselves it’s time to buy, buy, buy. However, our odds of avoiding The Big Mistake go up dramatically when we have a good advisor. In fact, according to Richards, preventing clients from making The Big Mistake is an advisor’s primary job. Investors can (and do) make lots of small mistakes: failing to rebalance on time, owning a mediocre investment, or being a little tax-inefficient, for a few examples. These are all things people can survive and still reach their goals. But if an advisor isn’t using every ounce of persuasion they possess to convince their clients not to make The Big Mistake, then there is a major problem.