Visualize the attainment of your retirement security and comfort. See your children and grandchildren educated. Visualize your pursuit of lifelong dreams with the time and finances that allow for it. All of that, and more, springs into our minds with the phrase achievement of life’s goals.
That is pleasant to imagine, and it is motivating. But how will that happen? As we have often written, Pure Dumb Luck is not a chapter in financial management textbooks. The chapters that are in those guides list the tools we employ in guiding you in your financial planning and in the management of your investment portfolio. While nothing is guaranteed, the textbook principles that we employ, which are commonly accepted in our industry, are the best methodology for achieving those goals that you fervently hold in your mind’s eye.
Those steps include a methodical analysis of your goals translating them into concrete objectives that include adequate savings and investing, proper portfolio management, wise tax strategies, adequate insurance coverage, estate planning and calm and measured reaction to the inevitable movements of investment markets.
But what gets in the way? Unfortunately, many things do, and they can be debilitating. Inadequate or improper planning, emotional reaction to market movements and harmful portfolio reactions all conspire to sink your financial future and goals.
Proper planning is a necessity. Even if you are on the brink of retiring, you still must plan so that you can confidently move through retirement and transition assets to the people and organizations that you care about. You must test your assumptions regularly as you move forward toward your objectives. Only in that way can you know how much to spend, what you can afford to gift to family and charities and what trips you can take without wrecking your finances.
Reacting emotionally to market movements will cause you to disrupt your careful plan and miss the inevitable recovery of those markets. Markets fluctuate, always have and always will. But the trend line has always been up over time and markets have never gone to zero. If they do it won’t matter where you have placed your funds because every bank and insurance company along with the federal government depend on markets’ continuance. Thinking that “this time is different” or that you can catch market tops and bottoms will lead you astray.
History remains our best guide to future economic activity. Successfully timing markets is not possible and you will hurt yourself trying. Staying with a properly allocated portfolio that is professionally managed and monitored remains your best course of action. Fifty years of investment management experience and study convinces me that this is true.
Your financial advisor here at Fragasso is your guide, our full-time portfolio management department can devote the time, expertise and judgment that you likely cannot. We are here for you now and will be so for you and your family into the future.