The recent observations of human behaviour surrounding the tropical low that formed into Cyclone Kirrily before crossing the Townsville coastline were very much the same as what we know as behavioural finance.
We no longer have the luxury of a limited number of sources of media fighting for our trust by producing quality, consistent and well-verified news for us in a timely manner.
On the contrary, we now have an abundance of sources all competing on ‘speed to market’ and then the ‘most viewed/commented on’ posts light up the algorithms and get the most reach, regardless of accuracy or depth of journalism. Unfortunately, what that means for the majority of the community is confusion and complacency. Who should we trust and where do we take the directions from?
When it comes to finance, the situation is often the same for many people. The media hype, sometimes even advice from a colleague or neighbour, has a lot of us investing in ‘the next big thing’, checking our investments often and deviating from proven wealth strategies, sometimes resulting in wealth-destroying decisions.
How many people have you heard panicked and sold their investments to cash during the volatility of COVID-19 only to miss the following uplift? Or bought junk stocks only hoping to make a fortune only for them to become worthless? And how many do you know have no idea about their financial situation or where their superannuation is invested? These types of behaviours mimic those of us who either clear the shelves at Woolworths in a panic or alternatively, do absolutely nothing to prepare for a cyclone.
The reality is, that finances can be simple and don’t have to cause anxiety. Seeking advice from an experienced financial adviser and setting strategies aiming to achieve your goals can alleviate anxiety and confusion, avoid complacency, and reduce the likelihood of those wealth-destroying decisions.
Like preparing for a cyclone, seek advice from real professionals, put your strategies in place and be prepared to weather the storm, whether it heads our way or not.
Ashleigh Thompson (BBus(FinPlan)) is an Authorised Representative of Alman Partners Pty Ltd, Australian Financial Services Licence No: 222107.
Any information provided to you was purely factual in nature. It has not been taken into account your personal objectives, situation or needs. The information is objectively ascertainable and is not intended to imply any recommendation or opinion about a financial product. This does not constitute financial product advice under the Corporations Act 2001 (Cth). It is recommended that you obtain financial product advice before making any decision on a financial product such as a decision to purchase or invest in a financial product. Please contact us if you would like to obtain financial product advice.