I was recently interviewed for a Crain’s Cleveland on “DIY Investing.” It’s funny how each time I’m quoted, regardless of the publication, it tends to be more of a editorialized quote to paraphrase what I said and fit into the story. Perhaps I’m too picky, but regardless, it’s nice to be asked to contribute.
Kevin Kroskey, a financial planner and president of True Wealth Design in Akron, said emotional discipline is the key factor.
“We are not always rational when it comes to investing, and basically our brains act very subjectively when we are dealing with our own money,” Kroskey said. “What has changed now is that we have more information at our disposal, but in investing, a little information can be really dangerous.”
Kroskey said that often individuals lose sight of the fact that a diversified approach is important.
“The money that is being invested has a purpose behind it, and both the planner and the client have to understand that purpose,” he said. “If you’re not staying with that purpose, you might as well be throwing darts at a dart board as a way to choose your investment options.”
Perhaps this is a better quote:
“No one in his right mind would walk into the cockpit of an airplane and try to fly it, or into an operating room and open a belly. And yet they think nothing of managing their retirement assets. I’ve done all three, and I’m here to tell you that managing money is, in its most critical elements (the quota of emotional discipline and quantitative ability required) even more demanding than the first two.”
William Bernstein, MD – 2008
Bernstein holds a PhD in chemistry and a MD; he practiced neurology until retiring and beginning a career in Financial Economics. He has written several best-selling books on financial economics.
