Weather Alert  

FLASH FLOOD WATCH REMAINS IN EFFECT FROM THIS EVENING THROUGH TUESDAY AFTERNOON CCA The Flash Flood Watch continues for * Portions of southern Connecticut, northeast New Jersey and southeast New York, including the following areas, in southern Connecticut, Northern Fairfield, Northern Middlesex, Northern New Haven, Northern New London, Southern Fairfield, Southern Middlesex, Southern New Haven and Southern New London. In northeast New Jersey, Eastern Bergen, Eastern Essex, Eastern Passaic, Eastern Union, Hudson, Western Bergen, Western Essex, Western Passaic and Western Union. In southeast New York, Bronx, Kings (Brooklyn), New York (Manhattan), Northeast Suffolk, Northern Nassau, Northern Queens, Northern Westchester, Northwest Suffolk, Orange, Putnam, Richmond (Staten Island), Rockland, Southeast Suffolk, Southern Nassau, Southern Queens, Southern Westchester and Southwest Suffolk. * From this evening through Tuesday afternoon. * A rapidly developing low pressure system south of Long Island will likely produce heavy rainfall across the region. Rainfall totals of 2 to 4 inches with locally higher amounts are possible. Rainfall rates may exceed one inch per hour at times. * Heavy rain may produce areas of flash flooding.

When Good Markets Go Bad

LongIsland.com

We know markets will cycle - we just don't know when. Having professional advice and an investment plan can keep emotions in check when panic and confusion threaten. The markets have nearly rebounded to the ...

Print Email

We know markets will cycle - we just don't know when. Having professional advice and an investment plan can keep emotions in check when panic and confusion threaten.

The markets have nearly rebounded to the historic highs reached in 2000, but investors haven't forgotten the emotional devastation of the tech bubble burst and its aftermath. History tells us the markets will cycle down again eventually; we just don't know exactly when. When that downturn comes, a financial plan (the big picture), an investment strategy (how you get to the big picture) and a trusted financial advisor can make the difference between staying the course and bailing out too soon.

Not surprisingly, researchers have found that the human brain wants to be happy and will in fact bend our perceptions of reality to that end. Faced with evidence that we have made a mistake in judgment, our brain denies, rationalizes, blames and defends, because admitting mistakes damages our self esteem and makes us unhappy.

Faced with investment decisions, our brain goes looking for ways to support its quest for happiness. We envelope ourselves with information - from the media, from the stock ticker, from cocktail party conversations - and gain a sense of satisfaction that we have superior knowledge. We don't. We have a glut of information.

That false sense of knowledge leads us to make an investment based on past performance - despite prospectus disclaimers warning us that past performance does not guarantee future gain. We buy what's popular - because our brain tells us that many people can't be wrong. We resist selling investments when performance indicates we should - because we don't want to admit we were wrong. And we invest in stocks simply because we recognize the name or, worse yet, because we work for the company.

If you've fallen victim to these financial foibles in the past, now is the time to evaluate your financial strategy. That starts with a financial professional you can trust to be a sounding board - maybe even the voice of reason - when you start to panic about your portfolio. That trusted advisor should be helping you develop a financial plan that starts with determining your life goals, not just a target amount for your investments. Be upfront about your assets, your liabilities, your hopes and your fears so your advisor gets a comprehensive picture of what you hope to accomplish.

To implement your plan, you need an investment strategy that fits your time frame, money needs and risk tolerance. With your financial professional, determine which investment vehicles are most suitable to your profile. That includes understanding what criteria or scenario should prompt you to sell an investment, hold it or buy more.

When the inevitable happens, and the markets retreat, don't look to the media, your friends or even the major indexes for your next move. Look to the financial plan and investment strategy you and your financial professional developed and evaluate if those should change in the current climate. Good markets will always, eventually, go bad. With preparation, planning and professional financial counsel, that doesn't have to be true of your portfolio.

Lawrence D. Sprung, CFP of Mitlin Financial Inc., is a Registered Representative with Securities America, Inc., a Registered Broker/Dealer, member NASD/SIPC. Advisory services offered through Securities America Advisors, Inc., A SEC Registered Investment Advisory firm. Lawrence D. Sprung, Investment Advisor Representative. Mitlin Financial, Inc. and Securities America are unaffiliated. He can be reached at 631-465-2017 or by e-mail at lsprung@mitlinfinancial.com. Feel free to forward any questions, or future topics you would like to see discussed to info@mitlinfinancial.com and put longisland.com in the subject line.