Are your windows clean?

First law of window cleaning…the dirt is always on the other side.” Anonymous

With the arrival of spring, I find myself thinking of this quote. It’s too true for me. And in my profession, I regularly meet people who tell me they feel the same way about making financial decisions. Just when they decide to get into the market, it plummets. When they sit on the sidelines, the market roars back to life.

Many people feel they’re on the wrong side of the financial markets—the wrong side of the glass.

How do you keep the proper perspective, seeing clearly the course of action that will lead you to success? We recommend the following:

  • Understand your time horizon. The longer the term you use to make decisions, the greater the probability you will achieve your preferred outcomes. Don’t make short-term, reactive decisions based on the latest news when you’re preparing for the longer term. (In other words, believe the sun will come out tomorrow. It always has.)
  • Initiate and monitor your progress. First, adopt the proper process (including asset allocation and family communications) to reach your desired outcomes. This should take into account the risk you’re comfortable taking and the return you’re targeting to accomplish your goals. This process, properly considered, will give you the greatest likelihood of seeing beyond a passing financial storm with a focus on the horizon.
  • Stay the course. In challenging weather conditions, pilots can’t trust their senses to direct the aircraft. Instead, they follow their instruments, the prearranged plan, to help them reach their destination. Likewise, in times of market volatility, it’s dangerous to trust your gut. (In fact, statistics show that in inclement weather, pilots trusting their instincts over their instrument panel crash nearly 50% of the time.) When the view outside the windshield is too clouded to be relied on, it’s the plan you create ahead of time that will allow you to remain properly oriented to your goals.

At Highland Consulting Associates, we’re privileged to help people see through the windows of their present situation to imagine and achieve their future. We avoid focusing on the smudges of uncertainty that can distort the view. (Or, worse, the distractions that can take our eyes of the goal altogether and lead one astray.)

We can help you with the plan and processes that will allow you to take the long view in achieving your financial goals.

Randy Fairfax, CFP