Comments on: 3 Principles of Successful Investors Part 2

By: Ed Rempel

Ed Rempel — Thu, 26 Nov 2009 04:49:06 +0000

Hi saveING,

It’s hard to put a number on it, because you can’t really separate planning someone’s financial life from their emotional life. Finances aren’t really about the money itself – they are about what it does for your life.

We actually have a life coach in every meeting with a new client. We find it very helpful as part of creating a financial plan in order to help the client figure out their goals and to understand the emotional reasons for them.

Emotional discussion about investments varies a lot with the markets. We have an education process about investment risk that we go through with every new client, but we still spent a fair amount of time reassuring clients early this year. We always say we have the best clients. None sold and only one switched partly to money market, although a couple skipped their regular RRSP contribution.

Early 2007 was the opposite, with quite a few clients wanting to get more aggressive or invest large amounts after the big gains in the last half of 2006.

If I were to guess, I would say 20-30%, but many discussions are a blend of financial and emotional.

By: Ed Rempel

Ed Rempel — Tue, 24 Nov 2009 23:36:33 +0000

Hi Alexandra,

Yes, we’ve had a lot of fun with the “STD” acronym. :) Thanks for your comments.

By: Mrs. Money

Mrs. Money — Tue, 24 Nov 2009 20:54:19 +0000

I think these principles are not only good for investing, but also life!

By: saveING.ca This is why I signed up with ING Direct

saveING.ca This is why I signed up with ING Direct — Tue, 24 Nov 2009 17:53:25 +0000

hey Mr. Rempel, questions for you;

When you sit down with a client to discuss finance, what percentage of your time do you spend doing psychological work, ie educating, and selling people an idea?

By: Jackie

Jackie — Tue, 24 Nov 2009 16:28:37 +0000

I love this way of looking at things. Your emotions really do have a huge effect on your actions — if they didn’t we’d all do all of the right things all the time.

By: Ms Save Money

Ms Save Money — Tue, 24 Nov 2009 15:41:08 +0000

Agreed – patience and faith – but sometimes very hard to have when the market is falling and your money is slashed in half.

By: DG

DG — Tue, 24 Nov 2009 15:24:55 +0000

Great series Ed. You’ve got me interested in investor behavior and psychology now.. can anyone recommend any books on the topic for an amateur investor such as myself?

Thanks,
Dan.

By: Mark Wolfinger

Mark Wolfinger — Tue, 24 Nov 2009 14:03:52 +0000

This series has convinced me that you are not a serious financial blogger. I’m unsubscribing.

By: Alexandra

Alexandra — Tue, 24 Nov 2009 14:03:30 +0000

I love that the struggling investors have been labelled with an STD – lol.

I like this triumvirate. But I think that patience and discipline need to come first ;-).

The “faith” part I still have issues with, only because the investors with STD also have faith – it’s just that they have faith in their own ability to time the markets and pick those winners – even if history and past performance has proven them wrong.

The part that is tough about patience and discipline is that we live in a very “now” society, where instant gratification has become the norm, and delayed gratification is for suckers. Why wait to purchase something if you can get it right now on yoru credit card? We are so used to that model of purchasing, that I think people feel the same way about investments. Why wait thirty years for an investment to slowly grow, if you can just pick the time when a certain stock is going to explode, and become rich overnight?

Great article.

By: saveING.ca This is why I signed up with ING Direct

saveING.ca This is why I signed up with ING Direct — Tue, 24 Nov 2009 13:41:22 +0000

yes, I actually believe patience is a must for investing.

cheers Ed