Focusing on the Big Picture, Despite the Short Term!

​This has been one of the most challenging markets for both stocks and bonds that I have ever seen!  Never during my investment career have both stocks and bonds lost so much on a combined basis in the same year.  In other words, bonds usually act as a safety net for equities, but not this year.

​Even though equity losses are quite contained, overall investor sentiment seems worse because of those bond portfolio losses.  Throw into the mix the extreme losses on crypto assets and the general feeling that we are headed for a recession and it’s no wonder that the average American is feeling down about their financial futures.

However, just like investing is for the long haul, so is staying rooted in the bigger picture.  Markets move up and down and always have.  Some years are better than others.  Some years are just plain painful!  However, time generally heals all wounds and allows us to achieve our larger goals.
 
The key is to keep focused on the prize and that is your personal financial goals or the big picture. 

• Maybe your goal is to retire and travel the world by age 65? 
• Maybe your goal is to be debt free by age 45. 
• Maybe your goal is to have $1.5 million in net worth by age 50, or
• To own a successful business that can be sold to support your retirement.   

I could go on and on.  Whatever the goal, that should be your focus. 
 
You should be making progress towards the goal and course correcting along the way.  A bear market, like the one we are currently in, can set you back in the short-term, but hopefully your plan was built on longer-term assumptions.
 
Here are five things you might want to examine to make sure you are still achieving your big picture goals:

1. Do I have a plan?  If so, am I executing on that plan including the required contributions to that plan.  If you don’t have a plan, now is the time to develop one.
2. How am I doing on that plan vs. where I projected I would be at this time?
3. Were my plan assumptions reasonable?  Do I need to make any course corrections to reach those original financial goals or objectives such as saving more, spending less or investing more wisely.
4. Are there one or two things that I can do today that will enhance my chances of reaching those goals?
5. Am I diversified enough?  It has been too easy over the past 40 years to just choose a 60% equity and 40% bond portfolio and win.  My guess is the next decade or more will revert to a mean where it is important to factor into the investment side of your plan assets that are not as highly correlated with stocks and bonds including precious metals, currencies, private equity, and more.

 
If you are like most Americans, you probably have not revisited your plan in some time.  It is like all things in life, you must revisit it from time to time to see how you are doing in moving towards the big picture goals.
 
If you need help with the process or maybe you haven’t ever even developed a plan, please feel free to give us a call or click here to reach out to us.