Are you always asking the right questions to make the right financial decisions?

Your journey to financial success can often appear to be fraught with anxiety and uncertainty as you struggle to identify the most effective path towards your desired lifestyle.

With countless investment options, complex economic conditions, and unique personal financial situations, selecting the best course of action can feel overwhelming.

As an investor, you may also have to contend with contradictory advice, misinformation, and your own behavioural biases, while all the time knowing that decisions you make today can profoundly affect your future financial security and aspirations.

In these moments of confusion, it’s understandable for you to seek financial advice for guidance and clarity.

However, in my own experience, the key to overcoming such struggles often lies not in new and better answers but in asking different and better questions.

The wrong questions can emanate from different sources

Unfortunately, many investors frequently approach their financial decisions by asking the wrong questions.

They do this influenced by the financial media, well-meaning but misinformed friends and family, and generic rules of thumb that fail to account for their individual circumstances.

The wrong questions can trigger common behavioural biases, such as loss aversion, the fear of missing out, and mental accounting, that steer investors down dangerous paths.

Some of the questions I am often asked by investors in this position are:

• Where is the stock market heading in the next few months?
• How can I maximise my returns in the short term?
• Should I invest in the latest hot thing?
• Is now the right time to buy or sell a particular investment?
• Is now a good time to keep my money in cash?

I understand that being too closely involved and financially invested in your situation can make it challenging to view matters objectively.

Financial clarity often requires an external perspective, which is one of the underappreciated benefits I like to think I provide to my clients.

Focusing on the previous questions tends to result in anxiety and myopic decision-making, undermining your long-term financial stability.

When investors approach me for help, they expect to receive good answers to their questions, and I’ll certainly have strong opinions on them. But from experience, I understand that what they need is to start asking better questions.

Asking the right questions can provide you with better outcomes

From my work with clients, I have found that asking the right questions can quickly guide you towards a healthier mindset and more positive outcomes.

These questions will usually alter your focus from the tactical route you need to take and redirect it to consider the strategic considerations that will allow the practical answers to become fairly obvious.

While the most relevant questions vary depending on your individual scenario, a selection of ones that you will find it helpful to ask are:

• What are my long-term financial goals, and how does this decision impact them?
• How will this decision affect my ability to reach or maintain financial independence?
• What is the historical performance and volatility of this asset?
• Can I hold onto this investment for the long term, even in market downturns, without panicking?
• What effect will this investment choice have on my wider financial strategy?
• What upcoming transitions am I likely to go through that affect this decision?
• How will this decision affect those who are financially dependent on me?

Compiling a set of high-quality questions can be an invaluable tool for navigating the world of investing, whether you’re doing it alone or with the help of a third party.

Take a step back and reflect on the questions you should be asking

In pursuing financial clarity, asking better questions is essential for you to navigate the investment landscape confidently and effectively.

I am confident that if you focus on asking the right questions you should have greater understanding of your financial situation, increased confidence in decision-making, and improved long-term outcomes.

As you approach your financial decisions, I encourage you to reflect on the right question to ask.

Of course, if you are already a client of mine, I’ll continue adding unique insight into your decisions by playing the role of a thinking partner as you continue on your financial journey.

Get in touch

If you’d like to talk through your financial planning arrangements then please get in touch.

You can call me on 07769 156 250.

Please note

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Equity investments do not afford the same capital security as deposit accounts.

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.