Nicole Heales

  • Why Nicole?
  • How I help you
    • Take Control
    • Insurance
    • Superannuation
    • Debt Reduction and Mortgages
    • Wealth Creation
    • Retirement
  • Success stories
  • Education
    • Podcasts
    • Ebooks
    • Explainer Videos
  • News
  • Contact

Is there really safety in numbers?

As humans, we’re instinctively attuned to follow the mindset of the crowd. In fact, it wasn’t that long ago that prevailing wisdom dictated that the world was the centre of the universe.  While we all know that to be eminently false today, at the time it was accepted as a widely held, and undeniable fact. At the time “group think,” as it is known, seems right and logical, and generally only becomes flawed after the passage of time and with the benefit of hindsight.

What might seem like common-sense behaviour simply because others are doing it, can become a costly exercise in the long run. Essentially, following the herd, especially when it comes to investing, seldom pays off. It can be uncomfortable to stand apart from the crowd. The more people who believe in a widely-held belief, the more valid their behaviour seems, and as such, more people feel compelled to do the same.

Renowned investor Warren Buffett once said “Be fearful when others are greedy, and be greedy when others are fearful.”  In short, following the crowd when it comes to investing, is more often than not, a bad move.  As the following graph illustrates:

The herd mentality isn’t aided by the constant “noise” emanating from the mainstream media which often acts as a distraction and diversion from what should be an investor’s long term investment goals and strategies.

Following the pack, and/or basing your investment decisions on the ever-changing commentary from the financial press is a poor way to plan for the future. In fact, you are more likely to increase your risk and reduce your overall returns. For example, if there is a sudden surge in interest in one particular share, there will be a sudden increase in demand for that stock thereby increasing demand and in turn the price of the stock. By the time most people get on the band wagon the stock no longer represents good value, but many investors will continue to buy up due to fear of missing out.

The more you pay, the lower the likely return, and the greater the risk you take on. This is a big price to pay for being part of the crowd. And this represents rule number two – don’t let emotions guide your investment decisions.

Speak to Nicole Heales about what investment decisions are right for you and your individual situation, rather than just going along with ‘what everyone else is doing’.

Source: Capstone Financial Planning.

News

Can’t find what you need?

Newsletter

Subscribe to my newsletter and get regular updates on ways to make the most of your finances.

sign me up

INDUSTRY AWARDS

  • Winner – Most Influential Financial Planner 2019
  • Power50 – 50 Most Influential Advisers in Australia 2019, 2018 and 2017
  • Finalist – Female Excellence in Advice 2018 and 2017
  • Finalist – Industry Thought Leader of the Year 2018
  • Finalist – Holistic Adviser of the year 2018
  • Winner – Most Inspirational Woman in Financial Planning 2017
  • Finalist – Financial Adviser of the Year 2017 and 2016

OUR LOCATION

Level 14, 461 Bourke St Melbourne VIC 3000
Postal: P.O. Box 361, Balaclava VIC 3183
Mobile: 0417 167 024

Let’s Connect!

  • Email
  • Facebook
  • Google+
  • Instagram
  • LinkedIn
  • YouTube

What’s news for you

  • 2021 – A list of lists regarding the macro investment outlook
  • Creative holiday ideas to inspire you 
  • Five ways to shop a little smarter this Christmas  
  • The right times for financial advice  
  • Review of 2020, outlook for 2021 – from Pandemic to Recovery
  • ESG: Putting it all together and making decisions
  • Nine keys to successful investing
  • Responsible and ethical investing

Adviser Profile | Financial Services Guide
Privacy Policy | Disclaimer

Nicole Heales is an Authorised Representative of Capstone Financial Planning Pty Ltd ABN 24 093 733 969. AFSL 223135 (Authorised Representative Number 312479).

Copyright © 2021 Designed by GWD - Developed by Weblicious Solutions