posted on October 4, 2019 by Peggy Doviak

Ask Peggy How to Avoid Investment Nightmares!

Thinking about your investments can give you nightmares. Most people focus on events that impact their daily lives, giving their financial situation hardly a thought. Then, something happens—an event that makes them look at their investment decisions directly. The results can be frightening.

Do you dread seeing the envelope of your 401(k) or IRA statement? Do the words and numbers on the pages chill you as you realize you don’t understand what they mean? Do you lie awake at night looking at your half-opened closet door, wondering if your investment strategy will ever allow you to retire?

Well, get out of bed, pour yourself a glass of apple cider, scoop up your favorite black cat, and keep reading. I can help you create a strategy to keep investing from disrupting your sleep. Here are a few tips to keep the monsters away.

  • Always work with a fiduciary. Your adviser should put your interests before his or her own. Unfortunately, a range of acceptable behaviors exists for different types of financial professionals. Additionally, recent changes to policy have muddied the water even further. Talk about a bad dream! A true fiduciary holds a legal standard, and you should ask anyone working with your money to agree to one in writing.
  • Know what you own. Review your investment portfolio to be sure that you understand all your holdings. You probably own mutual funds, but remember funds are only wrappers. The investments inside are what matter. Do you own stocks, bonds, real estate, commodities, or other types of items? These categories have different risk/reward profiles, so dig into your holdings. You want to find any unexpected vampires.
  • Keep your risk tolerance profile up to date. Sometimes, your situation changes—you get married, have a baby, or get divorced–and your investment portfolio might need to be adjusted. By keeping your risk tolerance profile current, your adviser will have the information he or she needs to make appropriate changes. You should have completed a questionnaire when you opened your account, but your answers may no longer apply. You don’t need them trailing you like zombies, derailing your financial goals.
  • Know the costs. Everyone gets paid, and all investment products have fees associated with them. You should know whether your financial professional receives a commission, gets a fee, charges an hourly rate, or is paid a combination. Additionally, I don’t think there’s anything wrong with asking about their level of compensation. Further, look at the costs associated with any annuity, mutual fund, exchange-traded fund, or other financial product. They can be hard to find, so put on your Sherlock Holmes cap, get your magnifying glass, and read the prospectus!
  • Participate in your company’s retirement plan. Retirement is expensive. Not only are general costs high, but care for the final years of your life can set you back hundreds of thousands of dollars. Even worse—you could be living in retirement for as many years as you were saving for this stage of your life. With advances in medical care and the advantage of safe living conditions, assuming you retire at 65, you could be in retirement for 30 to 35 years! That could be as many years as you were funding the retirement account. Cue Janet Leigh’s scream of horror in Psycho. To help write your own happy ending, participate in your company’s retirement plan, especially if your employer offers a match. Additionally, talk to a CERTIFIED FINANCIAL PLANNERTM practitioner to determine how much money you will need in retirement.

Once your investment plan is in place, you may find that the horror you were experiencing was just a bad dream brought about by stress. Don’t you feel better? If only there wasn’t something sneaking up behind you……

Happy Halloween!


Peggy Doviak

Peggy Doviak

When Peggy Doviak’s mother got taken to the cleaners by an unscrupulous stock broker, Peggy got mad. She was so angry that she changed careers from corporate training to financial planning because she wanted to ensure that what happened to her mother never happened to anyone else. She has been committed to putting her clients first through a fiduciary relationship from the first day, not even knowing then that her position was optional and unpopular to many so-called financial advisers. But she’s learned a lot. She earned her CERTIFIED FINANCIAL PLANNERTM practitioner designation and went on to earn a Master’s in Finance with an emphasis in Financial Analysis even though she already had a Ph.D. in education. Active in her profession, Peggy works with financial literacy organizations, hosts a Knowledge Circle for the Financial Planning Association, writes a column for the Journal of Financial Planning, and is a member of the Women in Finance (WIN) Initiative of the CFP Board. She is a consumer advocate for fair financial practices both locally and nationally through her membership on the Legislative and Regulatory Issues Committee of FPA, and she enjoys meeting with lawmakers in Washington, DC. However, perhaps Peggy’s greatest shaping of the profession has come through staying in education. She has taught literally thousands of financial advisers in classes covering advanced certifications, the preparatory curriculum for the CFP exam, and master’s level courses in financial planning. Although Peggy Doviak can’t keep every consumer safe, she keeps trying.

Peggy Doviak Contest

Peggy Doviak is giving away a copy of her award-winning, #1 bestselling book, 52 WEEKS TO PROSPERITY: ASK PEGGY DOVIAK. Reading one short chapter a week and completing the activities will help you plan your prosperity in a year!

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