There is a ton of noise in relation to investing, investments, markets, Bulls, Bears, crashes, recessions, expansions, gloom and doom, etc. etc. etc. My wish is that everyone simple stopped paying attention to any of it and instead focused 100% of their time and energy on things that they can control.
I liken it a lot to the 3 Concentric Circles philosophy where the innermost, and smallest, circle contains things that I can both “Control” and “Influence”. The next ring contains things that I can only “Influence”. The final ring, which is by far the largest, is full of everything that I can neither “Control” nor “Influence”. I should spend 95% of my time working and thinking about things in the innermost circle. 5% of my time on the 2nd circle and 0% of my time on the last and biggest circle.
Why spend any time on things that I cannot impact at all? It simply is not rational.
In the field of financial planning there are all sorts of things that are in that innermost circle. Things such as:
- Estate Planning – Is my estate planning up to date as I’d want it to be?
- Insurance – Is my insurance coverage appropriate for my situation?
- Spending – Where am I spending my money and am I being realistic about my discretionary choices?
- Debt – Do I have a good plan in place to manage my debt and is it being executed each day?
- Investments – Is my allocation in alignment with my Goals, Risk Tolerance, and Timeframe? If not, why not?
- Investments – Are my individual choices within my portfolio appropriate? Do I have a good reason to hold each of the various stocks and mutual funds that I own?
I truly believe that if everyone concentrated on that inner circle of things that they can both control and influence there would be a lot less stress and much more satisfaction with how things are going and the progress that is being made.
Fortunately I have very few clients who allow themselves to get caught up in temporary topics such as the 2016 Presidential election or the UK leaving the EU. Most everyone that I work with understands the idea of using long-term investment strategies based on diversification. I try not to get too frustrated with the small group of clients who want to worry about things that are completely out of our hands… heck… anyone’s hands.
Let’s focus our time and energy on things that we can control and influence. Let’s not be scared into putting all of our money under our bed because Hillary is going to get elected and the World is going to end… She will and it won’t… Now if Trump gets elected… that is another story 🙂