It is easier to spend money than it is to save money. Take the harder path now so you can relax later.
Happy 2014! I used to take the New Year very seriously, and have successfully upheld several promises or resolutions. December is a time when I put my nose to the grindstone and work on business objectives and strategy for the year, and also put thought into what I can do to improve my mind, body and spirit in the coming 12 months. This year, in a spate of weakness, I have committed to “temporarily” give up sweets, deserts and deep-fried food. An admitted sugar and french-fry junkie, this temporary ban on sweets and fried food will help kick-start a good year. I have reserved the right to lift the ban when I chose, and will do so sometime in early 2014. This is a text-book study of how NOT to set a resolution or plan to improve health! 🙂
As 2013 came to a close, I watched Facebook, Twitter, and the news feeds as all the large financial firms put forth their checklists of financial to-do’s for the New Year. Nestled within all of this information you can also find several predictions for what the stock market will do in 2014, and forecasts for the economy. Last week during a client meeting, the topic of Congress arose, and in a quick moment of frustration I blurted out “I do not care what happens in DC” (of course I care!). I have said over and over that I work to build portfolios that will perform well in a myriad of economic and market environments. By building a sound portfolio of quality investments, you will more likely reach your financial goals. I do not make predictions, because it is an incredibly risky strategy and virtually impossible to do accurately on a consistent basis. The economic cycle grows and then contracts, and repeats itself over and over again. The cycle takes years to process, and while it is important to understand where we are historically, I think it is more important to build an investment process that selects high-quality stocks, bonds and mutual funds. We have no control over what will happen in DC, outside casting our votes during election time and making our voices heard. It does not change the fact that everyone still needs to invest, and have a long-term strategy to work towards financial goals. But it certainly makes for good conversation, as does trying to dissect the stock market and economy. Financial and news organizations are more than happy to provide us with enough information to choke a Budweiser Clydesdale horse.
Herein lies the problem…we are news junkies. Now, instead of just reading the morning paper and gluing ourselves to the television for just an hour to watch the nightly news, we are bombarded 24×7 with information that hits our computers, tablets and phones. It is fun to gather knowledge, but when it comes to your investments, it can become a huge distraction. I have referred to these times overs the years as “cupcake moments.” It is akin to being on a diet and having that chocolate cupcake tempt you (my personal favorite, with white frosting). Reading negative news stories about your favorite stock can make you stomach sink, but often has little to do with how the stock will preform for the year. Likewise, it is fun to watch a stock price pop, driven by a singular news event, but this can lull us into euphoria, and cloud objectivity.
Resist temptation, and resolve to give up getting rattled by the bombardment of both good and bad news that can distract you from your long-term plans.
© 2014 Pawleys Investment Advisors, LLC. All rights reserved.
Preparing for a half-marathon isn’t nearly as daunting as preparing a lifetime investment plan. Over the years, I have completed oodles of half-marathon races, and was crazy enough to run the Cape Cod full Marathon in 1998. I followed Hal Higdon’s training program, and was religious about completing the scheduled training runs in preparation for each event. I never broke any records, but I had a lot of fun, and was healthy and in good shape. In the past five years, however, I have completed just two half marathons, one in San Francisco and one in Myrtle Beach. Might I add I was grossly unprepared for both. The runs were not much fun, and borderline torturous. Luckily I didn’t get injured, because as those of you who are runners know, it is highly likely you will get hurt if you are untrained and go run 13.1 miles. One good thing that came out of the Myrtle Beach race was that my dog, Camper, got her picture in the Myrtle Beach Sun Newspaper:
This year, I am signed up for the Kiawah Island Half Marathon in December, and I am determined to enter the race well-prepared. I want to get back into a good level of fitness to improve my overall health. This means running 5 times a week instead of the 2-3 times I have been able to fit in over the past few years. What I have noticed over the past few weeks, is that the most important thing I can do is get out the door and complete my short runs. Five years ago, my shortest runs were 4-5 miles, and now they are about 2. Five years ago I could easily finish a 10-12 mile run at a solid pace, with plenty of energy to spare. Now my longest runs are 4-5 miles, and I am ready to hit the couch for the rest of the day when I am done.
Whether you are in your 30-40’s and worried about saving for retirement, or in your 60-70’s and unsure if you will have enough money for your lifetime, take heart! There is a plethora of historical data from which to build a reasonably accurate plan for any investment goal. It might seem daunting, but if you put a pencil to paper, you really can map out the small, incremental things to do so that you reach your goals with comfort and confidence. When you map out a written plan that breaks a large goal into smaller, incremental pieces, you know exactly what you need to be doing on a weekly and monthly basis. Hal Higdon’s program tells me how many miles I need to run each week (broken out into daily short-medium runs and one long run on the weekend) for the last 12 weeks prior to the Kiawah 1/2 Marathon. The mileage increases very incrementally each week so that by the time December 14th rolls around, I will feel both comfortable and confident about doing the race. And for the first time in 5 years, I will have fun doing it! Investing in the stock market and planning for retirement is fun if you have the right plan in place. Instead of obsessing with the onerous goal, focus on the baby steps so you can have fun and relax.
© 2013 Pawleys Investment Advisors, LLC. All rights reserved.