View Mobile Site

Ask the Expert

Signal Photos


Busting misconceptions about investor perceptions

Posted: March 31, 2013 2:00 a.m.
Updated: March 31, 2013 2:00 a.m.

We all know that perception often influences our decisions, yet we catch ourselves and become reminded that what we perceive isn’t always what’s really going on. With the constant barrage of information available in today’s 24/7 world, it’s important to not get caught up in the day-to-day market volatility and news headlines. That daily hype doesn’t always dovetail with what Wells Fargo Advisors top strategists are observing in the financial marketplace.

To wade through the information and make smarter decisions, it helps to clear up a few common misconceptions. Making investment decisions based on emotion, short-term market activity or perceptions that don’t reflect reality diminishes the ability to achieve desired long-term investment goals. However, establishing and maintaining an investment plan that considers your goals, concerns, risk tolerance and financial circumstances affords greater long-term success while still providing the flexibility to make changes when necessary.

The U.S. economy continues to grow

Many people fail to realize that, although it has been at a slow pace, the U.S. economy has been in recovery mode for more than three years and is actually doing modestly better (based on current gross domestic product values). We believe the underlying fundamentals remain positive with some rebound in the housing and auto markets, as well as progress in consumer confidence.

The stock market is up over 100 percent since the recession ended in 2009

Investors remain cautious surrounding uncertainties related to the "fiscal cliff" and debt ceiling debate. However, we can’t ignore that the stock market is reaching record highs. For many individuals, accumulating wealth over time is still made possible through having the right investment mix, which includes allocations in stocks.

Successful market timing is seldom a viable strategy

Poor-performing or volatile markets often tempt investors to just pull out of stocks completely. But then what? Investors with cash may sit on the sidelines waiting for the market to go down before investing at all. How low does the market have to go before you finally jump in, and what if the market continues to climb? Investors should look past short-term market swings, focus on the long-term picture and maintain a well-diversified portfolio.

Cash is expensive

By holding cash, investors are potentially missing out on strong investment returns. Most cash and cash alternative investments provide little if any return in the current environment.

Diversification is key

Managing risk and return requires planning. Diversification is a strategy designed to work over time to reduce the tendency of a portfolio to make extreme moves, whether down or up, so that investors can focus on making progress toward their long-term goals.

It’s never too late to start saving for retirement

While it’s always best to start saving early, late is better than never. Even starting at age 50, you can accumulate a significant amount. Just adding $1,000 each year to your $5,500 IRA provides the potential for a significant amount of additional retirement income by the time you are 67 years old.

DISCLOSURE: The investments and investment strategies mentioned in this article are provided for informational purposes only. They are not personal recommendations.


No comments have been posted.

You need to be a registered user to post a comment. Please click here to register.

The Signal encourages readers to interact with one another, following the guidelines outlined in our Comment/Moderation Policy. Click here to read it.

To report offensive or inappropriate comments, e-mail The content posted from readers of does not necessarily represent the views of The Signal or Morris Multimedia. By submitting this form you agree to the terms and conditions listed above. Thank you in advance for your cooperation.


Powered By
Morris Technology
Please wait ...