While your neighbors are trying to keep their resolutions for the new year, we suggest you take a slightly different path. Think about the financial behaviors you want to AVOID in 2018. By resolving to NOT do a few things you can reduce your financial stress and improve your investment results. Here are some suggestions as the year begins.
Sometimes it’s what you don’t do that matters. In a previous article, we introduced the idea of “anti-goals” — undesirable outcomes you wish to avoid. Pursuing anti-goals can help you steer your actions and decisions away from potential trouble spots. For instance:
I will not check my portfolio balance every single day. It’s been fun watching balances grow during the long bull market, but paying too much attention to daily market moves can be very stressful when markets slide. If you’ve made a habit of checking your portfolio every day, this is a good time to break it.
I will not try to guess market moves based on headlines. Trying to jump in and out of the market to take advantage of short-term rallies and pullbacks is a great way to reduce your returns. Trying to time these moves based on the current news only makes it worse. The disconnect between headlines and market performance can be confounding. Read or watch the news to stay informed, but leave it out of your investment decisions.
I will not sabotage my retirement by overspending today. If you haven’t talked with your advisor about how much money you’ll need to fund the retirement you envision, you should. That conversation will help put into perspective the trade-off of spending today versus having money when you need it later in life. Yes, purchase a dream vacation home. Perhaps two residences is enough. Make sure you pay your retired self first.
I will not fall in love with an asset class because it has outperformed. “Past performance is no guarantee of future results.” This familiar disclaimer can be easy to ignore when stocks or gold or crypto-currencies are on a hot streak, but it is true. Yesterday’s performance does not predict tomorrow’s. That’s why we always suggest holding a diversified portfolio and periodically rebalancing to keep it aligned with your risk tolerance.
I will not keep financial secrets. Being fully transparent about financial matters can be difficult or embarrassing, but the alternative is usually worse. Don’t let hidden debts, secret accounts or other surprises damage relationships with the people you care about. Make a habit of open and honest discussion of your financial situation and goals.
We wish you a great 2018 and hope you achieve all of your anti-goals!
This communication may include forward-looking statements. All statements other than statements of historical fact are forward-looking statements (including words such as “believe,” “estimate,” “anticipate,” “may,” “will,” “should,” and “expect”). Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Various factors could cause actual results or performance to differ materially from those discussed in such forward-looking statements.”
“Historical performance is not indicative of future results. The investment return will fluctuate with market conditions.
Past performance is not indicative of any specific investment or future results. Views regarding the economy, securities markets or other specialized areas, like all predictors of future events, cannot be guaranteed to be accurate and may result in economic loss to the investor.
Investment strategies, philosophies, allocations and holdings are subject to change without prior notice.
This communication is intended to provide general information only and should not be construed as an offer of specifically tailored individualized advice.
While the Adviser believes the outside data sources cited to be credible, it has not independently verified the correctness of any of their inputs or calculations and, therefore, does not warranty the accuracy of any third-party sources or information.
Adviser does not endorse the statements, services or performance of any third-party vendor.
Unless stated otherwise, any mention of specific securities or investments is for hypothetical and illustrative purposes only. Adviser’s clients may or may not hold the securities discussed in their portfolios. Adviser makes no representations that any of the securities discussed have been or will be profitable.
Any IPO alerts are purely informational and should not be construed as recommendations to invest.
Adviser is not licensed to provide and does not provide legal, tax or accounting advice to clients. Advice of qualified counsel or accountant should be sought to address any specific situation requiring assistance from such licensed individuals.
Any case studies or hypothetical client profiles are for demonstration purposes only. They illustrate the breadth and depth of the many clients we represent at various life stages. Any similarities to actual Adviser’s clients past or present are strictly coincidental. Individual advice and results will vary based on each client’s circumstances, objectives and prevailing economic conditions.