Have you been focused on the market’s day-to-day gyrations over the past couple of weeks? If so, you’re not alone.
Like the crowd at a tennis match, investors have been looking back and forth, one moment at a market selloff, the next at a market rally. And that makes this a perfect moment to discuss an investing truth.
What you measure matters.
Are you focused on the true purpose of your saving and investing endeavors – achieving your financial goals? Or are you caught in the moment, looking back and forth, succumbing to the temptation of trying to figure out when to get out of the market, and then, when to get back in? Those who have a plan know what their goals are, and it’s not to venture guesses at timing the market.
Those who have a plan measure their success in terms of achieving their goals with the least risk. What gets measured gets discussed.
Reflect on your discussions. Do they focus on how well your investment strategy is helping you achieve your financial goals? Or do they revolve around measuring short-term results or what the market might do next? Do you parse investment manager or mutual fund performance analyses? If you do, you are at risk of losing your sense of purpose and falling into a behavior trap.
What gets measured gets managed.
Look at your investment reports. Do they measure your probability of achieving your goals, such as like generating a sufficient and rising income for 30 or more years in retirement? Or do they measure how well your accounts are doing compared with institutional market benchmarks that have precious little to do with you?
Measure your plan, not the markets.
The antidote to uncertain and volatile markets and emotional investing is a prepared mind. A plan always results in mental preparation, which is invariably better than the mental strain of short-term, market-driven judgments and maneuvers.
A plan helps you to navigate an uncertain future and prepares you for what may be coming. A plan helps to expose impulsive, poorly thought-out ideas, and it lights the way toward better choices.
At Intelligent Capitalworks, we can help you plan and invest. Work with us and we’ll help you focus, discuss and manage your savings and investments to help pursue your goals. We have been planning, investing and managing individual accounts, trust accounts, retirement plans and charitable funds for two generations of clients just like you, spanning three decades.
If you would like help measuring what matters, we may be able to help. That’s just part of what we do.