Page 26 - Waterfall City Issue 5 May 2023
P. 26
Waterfall City News
COMMON MISTAKES
THAT COULD COST
YOU MILLIONS
Why investors should leverage the experience of
their financial advisor when making decisions.
By Nirdev Desai, Head of Sales, PSG Wealth
‘Everyone has a plan he role of the financial advisor
until they get punched T in uncertain times is to help
investors take proactive
in the face,’ were the steps towards ensuring that
words of boxing legend their financial plans are realised
Mike Tyson. Nowhere while responding rationally and
appropriately to market volatility.
is this sentiment more
appropriate than in Developing “financial
fitness”
the world of financial Investing can sometimes be
markets, where even an emotional rollercoaster and
the small changes can unfortunately, the urge to act
impulsively when markets show signs
undermine the success of volatility can be difficult to resist.
of a financial plan. An overwhelming body of evidence Nirdev Desai
continues to demonstrate that when
investors try to time the market and
make snap judgements in response to movements. However, the net loss of
fluctuations, the resulting decisions these switches amounted to nearly
can have far-reaching negative R100 million, leaving these investors
consequences. worse off when a degree of stability
returned and markets started to
Recent research by Momentum recover.
indicated that between March and
December 2020, investors reacted A big part of the value proposition of
hastily to the onset of the pandemic, a financial advisor is in sharing “non-
initiating R1.5 billion in switches technical” skills with their clients, such
based on ‘gut reactions’ to market as how to avoid acting impulsively in
24 Waterfall City Issue 5 2023
