4. Where does fear come into play?

Women often fear ANY loss or fluctuation in their investment principal. Far scarier however, is the effect long-term inflation has on a fixed-income portfolio.  Women also tend to fear that they will make an irreparable financial mistake, which is VERY hard to do, with the singular exception of irrevocable retirement plan distribution decisions.

5, Is there a way to not invest with my emotions?

Yes, strategize a plan with a defined asset allocation–for example, 60% invested in stocks & 40% invested in bonds; then invest in various types of stocks and bonds within those percentages. For example, your 60% stock portion may include:

• 35% invested in United States Large Capitalized stocks,

• 15% in Foreign Large Cap

• 4% in US Small Cap

• 3% in Foreign Small Cap

• 3% in Real Estate (REITs)

So also your 40% in Fixed income would be invested in both US and Foreign bonds–some very short duration, and some 5-yrs, for example, and then stick with those investments.

Annually, you will systematically sell off the excess winners–if after 1 year in your 60% stocks/40% bonds original asset allocation, your portfolio had shifted to a 70% stocks, 30% bonds allocation for example, you would sell off 10%–the excess percentage of stocks over your target/original 60% allocation–and buy bonds with that 10%, for example. This is called re-balancing, which is done void of emotions, period.

Invariably your current winners will cycle and perhaps drop in value, whereby the current depressed assets may in fact be on the upswing. This allows you to sell high and buy low, just like our mothers told us.

6. Is it bad to have a male financial planner/advisor due to the difference in emotions and the like relating to your question?

The gender of your advisor is less important than how your advisor is compensated. There are commission, commission + fee (also called fee-based) and fee-only advisors.

• The commission salesperson gets paid a percentage commission of your purchased annuity, mutual fund, insurance policy, etc., and thus has the most conflict of interest.

• The commission & fee salesperson also gets paid a commission on the products sold you, and also receives a fee for a written financial plan. Conflict of interest is palpable here, especially when the financial plan recommends your buying a fat life insurance policy, on which substantial commissions are paid.

• The fee-only planner, however, has NO conflict of interest, acting instead as a fiduciary; your financial goals are their goals. They typically charge a percentage of assets under management, so when your account goes up, they make more money, and conversely they receive less compensation when your account drops in value. Fee-only advisors are highly and exclusively recommended.

Next, determine whether your advisor listens to you, incorporates varying risk tolerances into the investment allocation, if you are part of a couple, and then gauge your overall comfort level; It is a relationship-built business.

7. What do fund managers do?

Decide which specific stocks or bonds to buy or sell within the scope of the mutual funds prospectus definition of that particular mutual funds investment objective.

8.  How do I come back from a massive loss, or a really bad investment pick/strategy?

One mistake investors make is to stay out of the market for an extended period of time after a loss, or to abandon future investments where the principal value fluctuates, and flee instead to Certificates of Deposit, whose underlying value is guaranteed not to go up–gotcha!  It is guaranteed, yes, not to go up or down.  Alternatively some investors take unwarranted risks to make up for lost time.  Dollar cost averaging back into the market will allow you to average the cost of re-entry, generally resulting in a lower annual cost than choosing to invest a lump sum of money all in one day.  Investing is long-term; time leeches risk out of the market.

9. What should I currently be investing in?  I’m nervous I’m going to lose it all.

You will never lose all your money, unless it is all invested in one particular security and that security goes bankrupt with no insurance; VERY rare indeed. Diversification protects investors from huge price fluctuations, in that historically when one type of investment is under-performing another type is out-performing, giving your portfolio much needed balance.  Select a mix of stocks and bonds that historically have given returns that you (and perhaps your fee-only Certified Financial Planner™) decide is necessary to meet your goals.