Celebrating National Investment Risk Day: A Wake-Up Call for Investors

National Investment Risk Day: A Wake-Up Call for Investors

Every year, on January 19, smart investors acknowledge their past mishaps by observing National Investment Risk Day (NIRD). Established by Toews Asset Management, this occasion highlights a crucial aspect of investing: understanding and managing risk. The objective? To celebrate the investment blunders of the previous year and to recalibrate our approach towards financial decision-making.

As we look back at some questionable investment choices made recently, it’s vital to engage in dialogues with industry experts about the influence of tantalizing narratives and wave-like market trends that often mislead investors. From speculative stocks to cryptocurrencies, many have found themselves swept into hype, neglecting the fundamental truth of risk management.

On January 23, 2025, Toews Asset Management will host a live virtual panel featuring esteemed voices in the finance sphere, including Cinthia Murphy, Investment Strategist at Vettafi, and Dr. Daniel Crosby, Chief Behavioral Officer at Orion Advisor. The event promises to shed light on identifying the pitfalls that can lead to poor investment choices. According to Phillip (Felipe) Toews, the CEO of Toews Asset Management, "While the past saw mania over tulip bulbs, today we’re witnessing similar trends with cryptocurrencies like Dogecoin, which boast market caps over $70 billion."

Toews emphasizes that NIRD is a moment to reflect. Investors must evaluate whether their portfolios are assembled based on meaningful strategies or merely captivating stories with no substantial groundwork. "Engaging open discussions about potential risks can steer investors back to rational decision-making, which is more crucial than ever,” stated Jason Graffius, COO of Toews.

Key Takeaways for Investors

1. Question the Hype: Regularly assess your investments critically. Ask yourself if you are chasing trends that could become infamous in hindsight.
2. Conduct Your Homework: Remind yourself that preserving capital can be just as vital as generating returns. Trends can change rapidly; thus, ensure your investment strategy aligns with your financial goals.
3. Understand Risk Matters: Align your portfolio’s allocations with your risk profile and financial timeframes. Doing so brings a sense of confidence in your investment decisions.
4. Prepare for Curveballs: When something skyrockets, it's wise to consider the possibility of a significant downturn. Develop strategies to manage potential losses.
5. Foster Real Conversations: Transparency between financial advisors and investors holds importance for constructive dialogue about uncertain market conditions.

Eben Burr, President of Toews Asset Management, notes that NIRD serves as a necessary reminder for investors to pause, reflect, and make decisions that truly correlate with their long-term objectives.

Toews Asset Management, founded back in 1994, focuses on innovative risk management strategies through a variety of ETFs and funds aimed at capturing market gains while managing downside risks. The company also provides a program under its Behavioral Investing Institute for advisors and institutions looking to refine their management skills and client interactions. For those interested, registration for the NIRD webinar is available online, encouraging participation from those within the investment community.

In conclusion, as we approach National Investment Risk Day, let it be a time to fortify your investment approaches and learn from the lessons of yesterday, ensuring a more discerning outlook for your financial future.