On the Beat 4/8/20 - Financial Concepts on Investing

Troy chats with Scott Ferguson of Financial Concepts about the most effective ways to go about investing for your retirement.

Troy: welcome back to on the beat, everyone.

I'm over here with scott ferguson from financial concepts, and we're talking about a great concept about doing nothing or doing something when it comes to investing.

Welcome to the show, my friend.

S.

Ferguson: thank you.

Glad to be here.

Troy: what do you mean by that?

Doing something or doing nothing.

S.

Ferguson: that's right.

So all too often we feel like, when it comes to our investments, we've got to be doing something.

But in reality, to me, doing nothing is doing something because sometimes sticking with what you've got is the right thing to do.

Even with all the noise that we hear, we should be doing this, we should be doing that, if we've got a plan-based investment portfolio, sometimes doing nothing and just sticking to that plan is the right thing to do.

Troy: so when you say it's already a plan in place, when you say doing something or doing nothing, you've already invested.

S.

Ferguson: that's right.

Troy: instead of playing the market, as an example, on a daily basis, sometimes it's good just to take a breath.

S.

Ferguson: i'm a big believer in making sound investment decisions, and so you want to be plan-based in those decisions.

So if you've got a plan and your plan says you need to be doing this, even if the market is topsy-turvy or you've got noise in your ear saying you should be doing something different, you need to stick to your plan and make those decisions based on that.

Troy: when your parents are saying you should be doing this.

S.

Ferguson: that's right.

Troy: you should be listening to scott.

S.

Ferguson: that's right.

That's right.

I like that idea.

Troy: okay.

Now we put out a call to some of our viewers, and they have some questions for you.

You ready?

S.

Ferguson: yeah.

Great.

Troy: all right.

What are some ways folks can cope with the ups and downs of the market without making reactionary investment decisions?

S.

Ferguson: an important thing is keeping perspective, right?

There's all the noise.

We see it everywhere, right?

We live in a world of 24-7 news everywhere.

It's on our phones.

Troy: it doesn't stop.

S.

Ferguson: it doesn't stop.

It's everywhere.

So sometimes we've got to take that information, sure absorb it, but we need to make sure that we're not letting it make reactionary emotional decisions.

Every decision that you make when it comes to investing, i believe, should be based on your plan.

You shouldn't be reacting.

It should be a plan-based decision.

So keeping perspective is the biggest key.

S.

Ferguson: looking back at the history of the market, the history of your investments, what they've done through good and bad times, having that perspective.

Because if it's in a topsy-turvy moment when the market is dipping or declining, it's very emotional.

It's not fun to see it.

But if you can look back and remember, okay, we've been at a point in time like this before, typically that can give us some peace of mind of knowing, okay, we've seen an event like this before.

What happened, and what should i be doing now?

Troy: all right.

You ready for the next one?

S.

Ferguson: yes.

Troy: alrighty.

Would you agree one of the biggest factors to successful investing is making plan-based investment decisions instead of reactionary ones?

S.

Ferguson: yes.

I'm a big believer in putting a plan in place, right?

I mentioned that at the very get-go.

You want to always have a plan when it comes to your investments because otherwise you're just picking something for really no rhyme or reason, right?

If you've got a plan in place, you're picking investments based on what that plan is.

So putting that plan in place gives you the keys.

Troy: how do you get rid of the noise?

Because we do react to the noise.

S.

Ferguson: that's right, and well, successful investors can get rid of that noise, right?

You've got to remind yourself.

You've always got to be thinking, "you know what?

I've got a plan in place."

Have an advisor, somebody that you can lean on, to talk to in those moments when the noise does ramp up and start to get to you.

Having somebody you can lean on to talk to, i think, is a really big key because you've got to push that noise out.

Because if you make reactionary decisions, history and statistics show us investors who react as the market goes up and down have statistically done less rates of return than investors who didn't react.

Troy: okay.

All right.

I've got one more for you.

If the ups and downs of the market have someone worried, well it can be, and they are contemplating making a change to their investments, can you offer them any input on what steps they should take, or if any?

S.

Ferguson: yeah.

Well, it just depends, right?

If you've got an advisor, talk to your advisor.

Let your advisor know, "you know what?

I'm worried.

This headline has got my attention, and it's making me think, what should i be doing?"

If you don't have an advisor, i strongly encourage folks to seek one out and put that financial plan in place.

Because we've got a plan you can lean on, you've always got something you can go back to and look at in those moments of emotional strife.

Troy: can i ask you just a question off the cuff?

Is saving 10% of your gross salary enough?

S.

Ferguson: it depends.

Each person is different, right?

Because each of us have different incomes, and we may have different dreams and goals.

Some of our dreams and goals we may be able to attain off of 10% of our salary.

But if we've got really lofty, high expectations of what we want down the road, well, in all reality, we may need to be saving more than 10%, right?

I always encourage first- time investors or folks who are just getting started, shoot for that 10% mark, but then let's increase it steadily over time.

Troy: i got you.

I like that.

Again, thank you, buddy.

If you want to find out more information about scott, there it all is up on your screen, everyone.

Financial concepts is the place to go for financial advice.