How to Avoid when Something Bad Goes Wrong [Video]


So, what do you do when something bad goes wrong?

You may get away with bad investing. As a matter of fact, I ran into somebody the other day who had all their money invested in Apple. Fortunately, that’s been a very good stock. So, that’s bad investing — having a concentration like that — but it hasn’t gone wrong … yet. And it may never go wrong, but that’s a big risk.

On the other hand, many years ago, I was introduced to someone that had most of their net worth in Enron. Enron, the company that used to invest in oil and shocked the world when they went broke in 2001. Thankfully, we were able to reason with the guy and got him out of probably half of his holdings in Enron before it went broke. That is a prime example of bad investing that did go wrong.

Other seemingly good investments that have gone wrong include:

  • Chrysler and General Motors went broke on the same day.
  • Enron, Global Crossing, and WorldCom were all great companies, seemingly, that went broke.
  • Decades ago, Studebaker went broke in 1967. I bet in 1966, there were people sticking around saying, “Studebaker’s going to come back.”

The point is you don’t want to concentrate too much of your investments in any one stock. You may think that you’re diversifying by being in mutual funds, but the mutual funds can have overlapping stocks and that can mess you up, too.

What we try to do as financial planners is help you avoid bad investing before it goes wrong.

The concept of “something bad going wrong” in investing was conceived by the newest addition to our pool of financial planners, Sam De la Cruz. Sam, along with my nephew, Mark Searles joined the Medallion team almost two years ago. They both were college baseball players and they are smart guys. We are excited about the energy, enthusiasm, and perspective they bring to the team.

Sam De la Cruz and Mark Searles- Financial Advisors

Medallion Financial Group is growing. We hope to add another one or two financial planners here in the next year. We are enthusiastic about growing the next generation of financial planners and ensuring that Medallion has a solid future.

We’re here to help you any way we possibly can today and into the future. We want you to be confident that Medallion is poised to be with you for the long haul.

Now, back to our concern of something bad going wrong. I would strongly urge you not to concentrate too much of your investments in any one place. If you have holdings that are not with Medallion, like if you have mutual funds or ETFs or an old 401k hanging out somewhere and you’re not sure whether you actually have a diversified portfolio, we would be happy to do the analysis for you. Sometimes you think you’re diversified when you really have overlap everywhere. So, let us know and we can do an evaluation for you.

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Investing involves risks and there is no guarantee that any particular strategy will work under all market conditions or protect against loss in a declining market. Diversification and asset allocation may reduce some risks of investing, but do not guarantee a profit or ensure against a lass in a declining market, they are methods used to manage risk.

At Medallion Financial Group, we believe financial planning is about Family. We have been helping families invest in the future since 1987 through a holistic planning approach. We recognize there are a variety of needs when it comes to retirement planning, plan rollovers, annuities, college planning, life insurance options, and investment management. It is easy to get lost in a sea of choices. Our financial advisors help with the basics and beyond to enable our clients to get the education, advice and management they need to retire with confidence.

Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.

We strive to exceed client’s expectations – because we have high expectations of ourselves.