How We Reduce Risk
With two of the worst bear markets in history occurring in recent years, reducing risk is the uppermost concern for investors. After all, it's keeping what you earn that counts. Failure to take action in falling markets leads to large losses that can be avoided.
Without a plan, an actual sell strategy, emotions take over when markets are falling. The emerging field of behavioral finance has studied the impact of emotions on investment success. The conclusions have confirmed what many observers have known for years, investors often act as their own worst enemy.
One of the biggest mistakes investors make is investing without a plan for selling. At some point markets will begin to fall, they always do. Without a plan for when to sell the typical investor will hang on until markets bottom. Unfortunately, it's at that point that many will sell and lock in large losses.
Muecke Financial understands these obstacles to success. Our approach to risk management recognizes the importance of having a pre-determined sell strategy. In the end it's selling, more than anything else, that preserves principal and produces a successful outcome.
More importantly, it's selling at the right time. To accomplish this we use well established technical indicators. By continuously monitoring the markets health, and the up and down trends that occur, we can reduce risk in client accounts. Selling investments according to a plan prevents large losses.
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