What’s Your Investment Objective?

by | Nov 30, 2021 | Blog, Videos

In this week’s video, Casey discusses how “making as much money as possible” is not an appropriate investment objective.

When the investment objective is unclear it can often lead to a mismatched amount of risk taking. Which is never a recipe for success.

Through our financial planning process we help folks decide what their investments are actually for. That way we can invest accordingly.

Show Notes

Rich Millennials to Financial Advisors – Wall Street Journal

https://tpmullooly.wistia.com/medias/f4ofjh3xqf?embedType=async&videoFoam=true&videoWidth=640

What’s Your Investment Objective? – Full Transcript

**Click here for a full downloadable PDF version of this transcript**

Casey Mullooly: In episode 281, we ask what’s this all for anyway? Keep watching. Welcome back to the Mullooly Asset Show. I’m your host Casey Mullooly and this is episode 281. Thanks for tuning in. But trigger warning, recent article from the Wall Street Journal was titled Rich Millennials to Financial Advisors: Thanks for the Golf Invite, But You Can’t Manage My Money. Got them.

All kidding aside, the article went on to talk about how quote unquote rich millennials prefer not to work with investment advisors. One of the people interviewed in the article prefers to invest 90% of his assets into cryptocurrency while another one prefers to invest in his business partners, neighbors hedge fund.

So the point being that younger people of the millennial generation prefer to invest in things that are fun and interesting. And as both millennial myself and an investment advisor, I understand both sides of this story. I enjoy talking with my friends and hearing about what they’re investing in in their Robinhood accounts.

Casey Mullooly: More interesting to me is why they’re doing it in the first place. I also know that as an advisor taking some of the risks that these young rich millennials are taking would number one, get me fired and number two probably cause me to lose my license.

When we’re making investment decisions, we of course want to consider what we think is going to do best from an investment performance standpoint, but there’s also a risk management side of the equation. And I think marrying both of those two things together is what makes a sound investing decision making process.

Casey Mullooly: I also think that part of the benefit of working with an advisor, and this is a totally unbiased opinion, is part of going through the financial planning process is it helps folks decide and figure out, well, why am I doing this in the first place? Why am I investing this money? What’s it for? What are my goals? What am I trying to achieve later in life?

We, going through the financial planning process, usually we’re investing this money for people to live on later in life and to draw down when they’re no longer working and no longer making an income like these younger folks in the journal article are. So that’s the most common why we’re investing this money.

Casey Mullooly: And I also know that one of the best ways to learn how you quote unquote should invest is by learning how you should not invest. And there’s only one way to learn that lesson. So do I think it’s necessarily a bad thing that younger people are taking on maybe more risk than they should? No. I think that that’s all part of the process.

But when quote unquote financial goal is to just make the most money as possible, that tends to lead to more risk taking than necessary and tends to skew into the dangerous side of investing. So that’s the message for episode 281. Know why you’re doing it in the first place, figure out those goals, whether that be in the short term or the long term and we’ll talk some more about it in episode 282. We’ll see you then.