Skip to main content
A Clear Direction
rss feedour twitterour facebook page linkdin
Financial Advisor Brisbane - AdviserScott Keefer - A Clear DirectionBuilding Investment PortfoliosPortfolio Management ServiceUpdated ContentContact Us - Brisbane Financial Planning
A Clear Direction Financial Planning logo

 Financial Happenings Blog 
Thursday, March 01 2007

A small segment broadcasted on the ABC's Midday Report, Thursday 1st March, gave an interesting insight into the psychology of investors.  The report focussed on a recent US study which found that investors tend to sell better performing assets to meet cash flow needs and hold on to poorer performing assets.  The theory goes that investors do not like admitting failure and hold on to poor / negative performing assets in the hope that the results of these assets will turn around in the future and at least beat the price that they were bought for.  Sound Familiar!!!


Actually, the investor would be better off holding strong performing assets and cutting their losses and running from poor performers.  This is not only on the basis of future performance but also on the basis of tax.  Selling poorer performing assets will have a smaller or even negative capital gains implication for the current year  Sounds easy in hindsight but who can be sure whether poor performers today will be outperformers next year?


What do we say at A Clear Direction?


If there is a need to get extra cash flow then hopefully an amount of cash has been left aside to cover this scenario.  If not, then we are not in the business of picking asset winners and losers, rather selling down  across a client's portfolio to maintain what we together have decided as the right mix of assets.

Posted by: Scott Keefer AT 09:02 pm   |  Permalink   |  Email
Scott Francis' articles in the Eureka Report 
Request for Information 
If you have questions, or would like more information, please go to our Contact page and leave your name and contact information.

Plan Well, Invest Well, Live Well! Financial advice providing a clear direction

A Clear Direction Financial Planning and Portfolio Management ABN 85 147 572 870

Level 19
10 Eagle Street
Brisbane QLD Australia
Ph: (07) 3303 0269

Authorised Representative (398444) and Credit Representative (403292) of FYG Planners Pty Ltd AFSL/ACL 224 543.

ASIC - Financial Advisers Register

All content of this website is copyright © A Clear Direction Financial Planning Pty Ltd, 2017

FYG Planners Pty Ltd & A Clear Direction Financial Planning Privacy Policy