The Questions Not Asked, The Decisions You Don't Get To Make & The Toll They Take On Investors

Questions Not Asked,  Decisions Not Made, 

& The Toll They Take On Investors

                              by: Brendan Magee

Last week, I was having a conversation with a very nice man during which I asked what he did for a living. He informed me he was on his second career. He retired a view years back after the company he worked for downsized the work force and he wound up as one of the casualties. Being close to retirement, he and his wife decided they had enough money to last the rest of their lives and it was time to start enjoying their lives.

Things started out o.k., but along with 2008 and the company's downsizing came the stock market crash. In a bit of a panic, Tom called his financial adviser and told him he wanted his money out of the market. Despite his adviser's advice to stay the course and the penalty that Tom would have to pay, he went with his gut and got his money out of the market and went on his merry way, which didn't prove to be as merry as he thought it was going to be. With the significant loss of his investments, his finances were not going to allow him to stay retired. He had to go back to work. 

My heart sank as he told me his story. Nobody likes to hear about someone struggling and realizing that their life's work won't be enough to fulfill on their hopes and dreams. 

Honestly,  I do not know the details of Tom's finances. I don't know how he had invested his money nor have I ever been privy to the meetings he had with his adviser when the money was first invested or withdrawn from his investment. The one thing I am taking notice of is that Tom's behavior isn't necessarily consistent with the rules for investing, buy low/sell high. So my mind and the questions I asked Tom went back to when he was first deciding how or where to invest his money. I was wondering if he was prepared to live with a downturn in the market or if he know how volatile his investments were. Were his expectations properly aligned with what he invested in?

So I asked him when he first started, did he get asked if he could come up with a mathematical measurement for how diversified his portfolio was? He said, "No, I was never asked questions like that." With that I surmised that Tom, like a lot of investors, made a decision without being able to fully answer and decide on one of the most fundamental questions anyone could be asked about investing and their financial security. Now he is paying the price and quite frankly is still in the dark as to why things have gone so wrong. 

Diversification is the cornerstone upon which all successful investing rests on and Tom was never given the opportunity answer this question. He was/is in the dark and not fully able to make the proper decision for him. I will lay odds he never got to fully answer questions about risk or cost either. 


To right this wrong and for investors not to find themselves in the same boat, more attention has to be given to the questions that need to be asked. The right questions are going to show investors what they aren't seeing and whether or not they are making decisions based on facts or dangerous assumptions.   

How does the stock market really work? Plus,Where do returns truly come from? These would be a just a couple additional questions that need to be answered as well.  The results Tom and his wife have to live with now most likely are not a coincidence. Nor would they be for any investor who wasn't given the opportunity to be asked the necessary questions and make the decisions that are most appropriate to their situation. 

Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions or comments e-mail brendan@coachgee.com or call 610-446-4322.