Hi, I'm Scott Carter with your Financial Fastlane. Here's the Fastlane tip. With a solid investment strategy, the only thing you have to fear is fear itself. What are you fearful of when it comes to your investment and your retirement accounts? For most of us, I think it's the fear of losing the money we've worked so hard to make. And this fear can paralyze us in ways that stop us from actually achieving our financial goals.
It's why FDR told Americans, "The only thing we have to fear is fear itself." Now savvy investors don't get stuck. They lean into their investment strategies and actually make money. No matter how volatile the market is, they make money. They have a plan and they stick to it. Smart investors don't do what so many mistakenly do, buy the high and sell the low. They know that they can never build their portfolio that way. I find it a very interesting dynamic that when a stock drops, people worry about buying it. So they wait until it actually goes up. On just about every other product I can think of, people actually flock to the store to get a good deal.
Now Warren Buffet says, "To be fearful when others are greedy and be greedy when others are fearful." That's one of the reasons he's a billionaire. Successful investors use this philosophy over and over again to achieve their investment goals. They know that every dollar they can earn by using smart investing principles is one less dollar they have to make in other ways. And one of those principles is diversification. As Jim Kramer you know him, the host of Mad Money, he says that, "Diversification is the single most important concept in investing."
So make sure you're diversified in different asset classes to mitigate your risk. Also make sure you're getting the right information so you can make the right choice. With a better understanding of the financial markets you will develop a more thoughtful, investing strategy that actually helps you achieve your real goals. So even if the market drops five or 10 or even 20 percent, you'll have done all that you can possibly can to ensure your portfolio doesn't drop as well.
So remember with a solid investment strategy, the only thing you have to fear is fear itself.
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