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Portage County Farmers Market

Words Matter

By Portage County Business Council

By LouAnn Schulfer, AWMA®, AIF®
Accredited Wealth Management AdvisorSM
Accredited Investment Fiduciary®

I’ve had some highly productive meetings recently with new clients.   We are in the process of moving their accounts to our firm.  When discussing their IRAs and other investments, each told me they lost a lot of money earlier this year when the stock market went down.  I asked if they sold their shares at that point: in both instances, they said no.  We went on to discuss market volatility and how if they didn’t actually sell out of their holdings when the value was down, then they didn’t actually LOSE any money.  In order to lose money, one would have to sell something for less than they bought it for.  In the case of an investment account, some would argue they lost money even if they sold for less than the highest value.   Importantly though, one does not lose money when one does not sell something,

With market-based investments, volatility is expected.  People generally own investments to reach a certain goal, such as retirement.  Our self-talk is important in how we feel, and our feelings will influence our actions.  If we wrongly tell ourselves we are losing money, chances are we won’t be as enthusiastic in our actions to add money to the account.  If we fail to add money to an account intended to help reach a goal such as retirement, we may miss the mark of hitting that goal.  I asked both, that when volatility to the downside affects their accounts going forward, to change up their language, and accurately say their accounts went down in value.  This is highly productive in their thinking about the accounts they own, their money, and overall financial success.  Words matter.

LouAnn Schulfer is co-owner of Schulfer & Associates, LLC Wealth Management and can be reached at (715) 343-9600 or
Securities and advisory services offered through LPL Financial, a Registered Investment Advisor.  Member FINRA/SIPC.