Post January 2008 and more specifically September 2008, many investors were left to wonder whether one could avoid asset bubbles.

We believe there is a way out. Personal Financial Planning is it.

Yes! Focusing on ‘goals’ rather than ‘returns’ could help us avoid asset bubbles.
This in turn detaches the investors from the ‘greed and fear’ experiences in the market.

An interesting study done by Dr Conrad S Ciccotello of University of Atlanta, Georgia bears some very interesting observations:

1. Returns estimation expected by clients varied from overly optimistic during bull runs and overly pessimistic during bear phases.
2. How could one avoid the herd mentality?
3. Goal setting as part of the financial planning process holds the key to avoiding asset bubbles.

Most importantly, the study showed that people would always want to achieve their goals.