What Are Your Retirement Expectations…?
In the story of Alice in Wonderland, Alice arrives at a fork in the road and asks the Cheshire Cat which path to take. The Cat asks where she wants to go, to which she replies, “I don’t know.”
The toothy cat then proffers the only possible response: “Well, then it doesn’t matter.”
While it’s not the type of exchange that might actually occur in our lives, it should, especially as we consider our financial future. For many people who have yet to clearly define their financial destination, it probably doesn’t matter which track they choose, if they choose one at all. This may explain why many Americans are not on track to meet their retirement goals or, worse, why most couldn’t tell you where they stand today.
When You Don’t Know Your Destination…
This would also explain why so many investors focus on the latest mutual fund returns or finding the next hot fund instead of looking inward at their own personal financial goals. It might also be the reason investors follow the herd—fleeing the market after it crashes or buying into it only after it has recovered.
These are investment traps that academic research has verified can cause poor portfolio performance. Because they have no destination, nor a path to get them there, these investors are easily enamored by biased sales presentations and disingenuous educational seminars.
If your investment expectations are driven by the current performance of the markets, biased media, or product-focused sales pitches, it probably means you have yet to clearly define your long-term financial objectives. What happens today, tomorrow, or next year in the markets will have little if any bearing on those goals.
The Only Performance Measurement That Matters Is Personal…
If, however, your portfolio expectations are based purely on its ability to get you to your specific destination, it means you are ready for a solid investment strategy. The only way to measure the outcomes of your investment decisions is to compare them to your specific objectives, not to arbitrary market indices. Your goals should not be susceptible to alteration based upon slick sales pitches from selfishly motivated brokers and planners.
Only through an honest, personalized planning process can you choose the path that will get you to your destination. As a matter of course, it is advisable to proceed through a comprehensive process that includes:
- Reviewing your financial situation and goals without outside sales influence.
- Clearly defining your short-term and long-term investment objectives.
- Applying a strategic investment approach customized to your investment profile with experienced, unbiased professional guidance.
- Monitoring and rebalancing your strategically designed portfolio.
- Reassessing and adjusting your goals and objectives annually.
From there, you can expect your portfolio’s performance to keep you on track to your desired destination without assuming any more risk than is necessary.
With unbiased, Fiduciary Standard-based planning and investment coaching, you will choose patience and discipline over hot stock tips and biased sales pitches, because you will know what actually leads to long-term investment success.
So, then it does really matter after all! You will never arrive at your destination unless you know where you are going and how and when you want to get there. The first step in defining that destination is a proper discovery process.
Our Westlake Village financial advisors specialize in helping clients define their destination. If you’re ready to build your strategic plan, the conversation starts here.
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Investment advice offered through MD Wealth Partners Inc., a Registered Investment Advisor in Westlake Village, California. The information and opinions expressed in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. It should not be considered a solicitation for the purchase or sale of any security.
Please consult your own legal or tax professionals for information regarding your individual situation. Investing involves risk, including the possible loss of principal, and past performance is not a guarantee of future results. Information throughout this site is obtained from sources which we and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information.