The GP&A Wealth Management Team
June 04, 2021
Don't Get Caught with Bad Advice
Chances are, at some point you have had a friend or relative suggest a “great investment”, or read an article in the national paper touting a company as “the next big thing”, or perhaps even read a few annual reports for a company and determined that it had “strong financials in a growing industry, and must be on its way up”. 2020 was a very unusual year for many of us, but it was no different in the fact that it brought to many peoples’ attention a number of companies that that were likely described in the manner mentioned above.
Roll forward to 2021, and not all those same companies are being talked about in such a flattering way. In his post “Bear Sighting in the New Economy”, the author points out a number of previously-hot, prominent companies that have suffered significant declines in value over a short period of time since becoming media darlings. That’s not to say that those declines won’t reverse, but more so to point out the dangers of becoming overly attached to a great idea or bit of news or advice; people who took the advice of that friend near the peak of those companies’ stock prices certainly aren’t pleased with their “great investments” at the moment!
The author goes on point out that folks with a well-balanced portfolio likely haven’t even heard about these significant declines; that instead of chasing a hot idea (and trying to time the purchase AND sale of such idea), a diversified portfolio (like the ones we construct for our clients here at Girard, Pilkey & Associates) will help you to avoid having to worry about getting caught in the same situation as that well-meaning uncle!