Cocktail Talk Is Very Revealing

Cocktail Talk Is Very Revealing
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Cocktail Talk Is Very Revealing

dinner-is-servedPeople often approach me at cocktail parties asking for my view of the investment climate and/or sharing theirs. While I go to such functions purely seeking to enjoy great friends, food and drink; I’m always happy to oblige.

To tell you the truth, cocktail talk almost always reveals one of the biggest investment mistakes on the planet: trying to be right. What do I mean? Well, these days, 24/7 news cycles can very effectively convince someone they absolutely know everything the need to about a topic when in reality they are viewing a whole lot of opinion and a very incomplete amount of evidence.

Case in point: last year, an acquaintance came up to me at a party and said he put $1 million in a bear market fund four years ago because he’s been absolutely convinced the stock market is going to collapse. He said it was now worth a mere $300,000 (this holding goes down when the market is going up and will only go up when the market goes down) but he’s convinced the market was going to collapse. Since the market is up over 15% since then, I’d estimate his $1 million investment (assuming he still has it) is now valued at $250,000 and he will need a 400% return from this point to get back to even. Ouch!

I’m not trying to make fun of this investor. While this is quite an extreme example, I see various forms of this same mistake made regularly by amateurs and pros.

One of my all time favorite investors, a gentleman by the name of Ned Davis, taught me the concept of investing to “make money” instead of “being right.” Simply put, it’s an approach that demands a constant look at the weight of the evidence and using it as a guide instead of developing an opinion and protecting it at all costs. This is what Evidence Based Investing is all about.

Joseph Janiczek, ChFC, MSFS

Joseph J. Janiczek, ChFC, MSFS is Founder and CEO of Janiczek® Wealth Management, which exclusively serves high net worth investors (individuals with $2 to $20 million portfolios) and ultra-high net worth investors (individuals with $20 million+ portfolios) across the country. After founding and serving as the president of an oil company, Mr. Janiczek recognized that financially successful individuals were greatly underserved by the investment and wealth management industries.

Mr. Janiczek spent decades in the trenches with those experiencing life-changing liquidity events and ultimately developed and patented Systems and Methods of Optimizing Wealth. He is a pioneer in the disciplines of Evidence Based Investing (EBI) and Strength Based Wealth Management™ (SBWM), award-winning author of Absolute Financial Freedom (Prosperity Press) and Investing from a Position of Strength. Mr. Janiczek’s education includes Master of Science Degree in Financial Services (MSFS) and Graduate Certificates of Specialty in Asset Management and Income and Estate Taxation from the American College. He also has his Chartered Financial Consultant designation. Mr. Janiczek has served as a Board of Governor of Legatus International, President of Rotary International Club and Foundation and Board of Director of Spitzer Center for Ethical Leadership. Mr. Janiczek is the majority shareholder of Janiczek® and leads its executive Leadership Team.
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