Charlie Sheen And Investors Need A "No"

Charlie Sheen & Investors Pay A Terrible Price For Not Being Told “No”

                                                                                    By: Brendan Magee

Charlie Sheen has lost a starring role on a t.v. show  that was paying him over a million dollars per episode. He’s done interviews and sounds nothing short of a blithering idiot, and has put his children in the care of an adult movie star. Charlie has reaped what Charlie has sown. You’d have to be woefully naïve to think that all this turmoil has been an overnight sensation. I would imagine that the trouble has been brewing for years. This is a guy that has to have been engaged in a whole lot of dysfunctional behavior for an awfully long time.

I can’t imagine that growing up the son of a wealthy Hollywood star or becoming a successful actor that Charlie Sheen has often heard the word no. I can’t imagine he’s been told, “not to do that,” by those who have depended on his talents to fill the movie theaters. I can’t imagine the night club owners where he hangs out told him to stop drinking. Make no mistake about it Charlie Sheen is responsible for what is taking place in his life right now, but I wonder how things would be going for him now if on a consistent basis when he was engaged in inappropriate or dysfunctional behavior someone told him to stop and he was forced to toe the line.  Would he and his family be paying the terrible price they’re paying now?

Like Charlie Sheen, investors who don’t hear the word “no” when needed pay a terrible price.  Investing is an instinctually and emotionally driven process. If the market goes up, we don’t want to miss the bull market, so we call up our broker and place the order to buy stocks. If the market is going down, we don’t want to get mauled by the bear market so we call our broker and place the order to sell. Now what’s probably more aggravating than seeing our portfolio go down in value is having our investment decisions questioned or being told by an advisor no “that behavior won’t be allowed.”  After all it’s our money and we worked hard for it. Who is anybody to tell us that our line of thinking is wrong?

Bear in mind that the last paragraph speaks to investors buying high selling low, and I know you’d never do that. However, think back to 2008. Did you sell any stocks after having seen your portfolio go down? Some $58 billion dollars came out of the market that year so investors had to have. Also ask yourself, now that we’ve seen two years growth in the market, are you considering putting money back in the market? If you answered yes to either of these questions two things are apparent. One you have a inborn tendency to break the golden rule of investing (buy low/sell high). Two, you are human and as any human being it is difficult to impossible to not engage in some form of dysfunctional behavior. We need help.

So, if as an investor, you realize that the biggest risk factor you face is your own humanity the last thing you are going to want your advisor to do is rubber stamp every investment decision you make. On the contrary, you are going to want that advisor protect your money from impulsive decisions that sound good in the moment and have lots of data to back them up, but in reality are completely in conflict with your financial security.  Like Charlie Sheen, investors can be blinded by their instincts and emotions. A sound investment strategy will often require an investor to do the exact opposite of what they see as the appropriate way to go. Often times the only thing that stands between them and disaster is someone strong enough to say “NO.”

Brendan Magee is the founder and president of Inevitable Wealth Coaching in Drexel Hill, Pa. With questions, comments, or suggestions call 610-446-4322 or e-mail Brendan@coachgee.com. Follow him on facebook at www.facebook/brendan magee-investor coach.