Course Description - CFP Board Course #268361
Many of the most important rules of investing in the stock market – the arena of financial gladiators, are completely non-financial in nature. They have nothing to do with money. They do, however, have to do with behavior; psychological preferences ingrained in many of us since childhood that can return to monetarily haunt us when investing. Some of us will have more baggage than others to address when it comes to investing in the market. Rest assured, however, that whether it’s simply an overnight or carry-on bag or an oversize piece of investment luggage that triggers a surcharge on the performance scale, no investor is 100% immune to the behavioral issues that arise in so many types of investing climates which test the temperament of investors around the globe day in and day out. Knowing oneself, and how you’ll react to rapid changes in the investment landscape and market volatility when your hard-earned capital is on the line, not to mention a host of other investing variables, is often a key determinant in investment success or failure. Emotions are a crucial and underdiscussed component of the investment process, and this 60-minute course will review some of the key questions that investors should consider asking themselves before investing. Remember, not everyone is suited to invest in the stock market. By constructing an emotional investment profile and “taking stock” of oneself in this area, investors will hopefully have a checklist to help guide them in an area that doesn’t receive nearly the investment attention it deserves. Some of the questions we’ll address are:
What are the limits of your tolerance for financial risk and pain? Do you set boundaries
What’s your plan not to let something totally unexpected, even a once in a century negative investment event, negatively impact your standard of living?
Can you take multiple losses in stride? Can you admit mistakes and not make excuses?
Do you act on your investing decisions, or tend to freeze and second-guess yourself?
Are you more apt to have a shorter, intermediate, or longer-term view?
Are you generally nervous, complacent, or somewhere in between?
Do the market’s movements affect you outside of trading hours?
Are you generally an optimist or pessimist by nature?
Does crowd psychology affect your thinking?
Do you tend to look backward, or deal with the situation at hand?
Is investing in the stock market even for you?
Learning Objectives
Explore investors’ psychological profiles,
Review non-financial investing scenarios; discuss responses,
Offer non-monetary tools to potentially improve investment performance,
Expand on the bullet points above and offer additional considerations,
Construct an emotion-based investment check list and profile,
Relate the course to the prevailing market climate,
Review examples from my book.
Primary Principle Knowledge Topic: Investment Planning
Complexity: Intermediate
Instructor Marguerita Cheng, CFP®
NEXT DATE
To be determined
Location
Online