Avoid Inquiring About Incorrect Financial Matters

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Navigating Financial Decisions: Why “Should I Buy” Questions Are Problematic

Financial institutions often use misleading questions to lure consumers into making transactional sales, rather than providing educational information. One such question that is commonly used is, “Should I buy gold?” This question, along with others like it, is often a sales pitch in disguise, rather than a genuine inquiry into financial decision-making.

The problem with these types of questions is that they focus on the “what” before addressing the “why” or “who” behind the decision. Without understanding the personal purpose or goals of an investment, investors may end up with a collection of disjointed securities rather than a purposeful portfolio. This lack of purposeful investing is a key reason why the “behavior gap” persists, where investors don’t receive returns as high as their investments.

To combat this issue, financial advisors and investors should focus more on asking “who” questions, such as defining financial success, understanding investment objectives, and aligning investment strategies with life goals. By understanding what is most important to an individual personally, financial decisions can be simplified and tailored to meet their specific needs.

Ultimately, by shifting the focus from generic “should I buy” questions to more personalized and purposeful inquiries, investors can make more informed and meaningful financial decisions that align with their values and goals.