Summer Leisurely Lessons for Your Investments

Recently my family enjoyed some relaxing leisure time, with adventures that took us from Southern California beaches and amusement parks to Arizona's mountains and dessert valleys.

My kids' favorite day – mine too! – was when we escaped the scorching, 118 degree Phoenix heat by heading into the Sedona mountains. There, we found a magical place called Slide Rock.

Picture a cool mountain stream forming a natural water slide through beautiful rock formations. Ahhhhhh. As we savored the outdoor paradise, I couldn't help but observe the happy families all around us, enjoying the incredible views and refreshing mountain water. Life's everyday cares and worries slipped away.

It's nice to have that memory now, to revisit whenever I need a little mental break. Then again, I'm glad to be back at my day job where I get to help other families avoid the sometimes scorching heat involved in planning for their retirement and similar financial goals.

Here are three tips I'd like to share, for the next time you could use some financial refreshment:

1 – Be Realistic.

If you're ever feeling financial fatigue, remember that your investment journey is a marathon, not a sprint. Along the way, expect to experience temporary set-backs, moments of jubilation and everything in between. Either extreme can be emotionally (and sometimes financially) draining, so consume moderately in each. Stop trying to "beat the market," which is the equivalent of swimming upstream. Instead, patiently go with the flow, capturing the market returns that endless sources of human innovation and consumption are expected to deliver over time.

2 – Diversify Against Life's Turmoil.

As we have said before (here and here), trying to outsmart the markets usually exposes you to unnecessary risk by tempting you to overload your money into a few big "bets." To avoid scorching your investments, stop over-concentrating on hot tips. Keep cool with a well-diversified portfolio you can stick with through every market climate. By spreading your investments widely and broadly among different kinds and levels of market risks, you may never hit the big jackpot, but you shouldn't ever go bust, either. This frees you to focus on your long-term goals, like funding your kids' education and retiring in style. This brings me to my final point …

3 – Avoid Getting Bogged Down in the Minutiae.

As my family and I enjoyed our summer vacation, it also reminded me of how important it is to step away from the vicious daily news cycle, and the seeds of doubt it can plant. I'm not saying you should bury your head in the sand, but don't let breaking news weigh too heavily on your decades-long plans. As Sir John Templeton once said, "The four most expensive words in the English language are 'this time it's different.'" By tuning out the constant, negative news, you're better able to think long-term and invest long-term.

Want to know more? One of the joys of being an advisor is going on this journey with investors, helping people experience more leisure time in their personal and financial lives. Call us today for a leisurely conversation.