I often hear people say, “My investments are OK.”
It sounds reassuring, but it isn’t proof.
If your investments were on trial tomorrow, and you had to stand in front of a judge and jury, could you actually prove they were OK?
Could you show, with evidence, that:
Most investors would struggle under that kind of cross-examination. And the truth is, very few ever test their investments in this way.
Why not? Because it’s easier to take comfort in a friendly voice saying, “Don’t worry, you’re on track.” It’s easier to accept reassurance than to dig into the uncomfortable details.
But “OK” is not evidence. “OK” is a feeling.
And feelings are a dangerous foundation for something as important as your financial future.
When markets are calm, it’s tempting to believe everything is fine. But calm waters don’t test the strength of the ship. The real test comes in a storm. If you haven’t prepared, if you haven’t stress-tested your portfolio, if you can’t prove it’s built to last, then “OK” may quickly turn into “not OK.”
If you’ve ever thought “My investments are OK”, stop and ask yourself: “Can I prove it?”
If the answer is no, here are three simple steps you can take today:
~Check your risk. Do you know exactly how much risk you’re taking? Would your portfolio survive a major market fall?
~Check your costs. Every 1% in charges you save can add thousands to your long-term wealth. Do you know what you’re really paying?
~Check your performance. Are your returns being measured against the right benchmark, or are you being shown numbers that look good but don’t mean much?
Nic Round is a Chartered Financial Planner and Chartered Wealth Manager, authorised and regulated by the Financial Conduct Authority.
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