The last several years of good times meant that people are asking just one question - what is the next higher target for prices. This makes the evaluation of various assets and investments a difficult task and hence one has to be careful when looking at various kinds of expectations from investments. There are a few things that need to be kept in mind in the current scenario.
Consider the downside
Today the position is such that most investors are looking only at the higher end of expectations. There has to be some sort of change in this kind of position and investors need to consider as to what can be the downside if things do not go per plan. This is important because an investor might need to bear losses when things do not turn out well and should be ready to face such a situation, rather than going into the denial mode.
Even experts can lose money
Other important thing is to realise that when things go bad is that there is no magic wand to correct it. This means that it is likely that most people operating in the area will have to bear the consequences and one major impact of this entire thing will be that several well performing fund managers or experts will also take a hit. This means that just because a person has done well in the last few years, it does not meant that even in tough times they will deliver a positive return.
One has to understand that these kinds of situations affect everyone in the field, and this is actually the time when the good are separated from the others in the field.
Professionals can help only to an extent
In several situations, there is only so much that you can do to improve your position. It might help you to be in a position such that you are better off than the others but you might still end up taking a bit of a hit. This is where the role of professionals comes in.
The professional will be able to help you guide your fortunes but they too might not be able to stop you from falling short of your targets if external conditions are not favourable. The role of such people has to be seen in the proper light otherwise there might be quite a bit of disappointment that follows.
The writer is a certified financial planner