How to stay focused in a divided world (and other ways to keep politics from messing up your investments)Submitted by Financial Planning Solutions, LLC on July 26th, 2018
We’ve had a pretty good run (until recently) in the US stock market since Donald Trump was elected. The Dow Jones Industrial Average has risen over 32% since Election Day on November 8, 2016 through July 16, 2018. Yet, for many investors, it has not felt quite as good as it should.
The US economy has improved and investment returns have been great, but the political discourse has been divided, confrontational, and often rough. This backdrop can be difficult for people to process because of the disconnect between good investment returns and how people feel things are going in the broader context.
As humans we consider what we hear, see, and know and then draw conclusions or make decisions based on those inputs. After considering this information, people often make the final decision based on their overall sense, e.g. “going with your gut”. Right now many investors are having trouble with this part. If you are struggling with this dissonance, you are not alone.
What can you do?
The same principal of good investing still applies: focus on the long term. It is a well-worn statement but perhaps one of the hardest to stick with. Today our phones are constantly buzzing and there is an endless stream of economic and market news available 24 hours a day, seven days a week. Sometimes it is just too hard to turn it all off—but you’ve got to.
Our happiest, most satisfied clients are the ones who are not watching the hourly movements of the markets. They are the ones that are focused on their quality of life, their families, and their goals. They know that their finances are very important but not the end objective.
A few other thoughts on keeping cool about your finances:
- Watch less news – Unless you are waiting for the weather, sports or the perfunctory “feel-good” story of the day, it’s all bad news. Why fill up your mind with it?
- Turn off your Twitter, Facebook, Instagram, Snapchat notifications - Your phone will still be there and you’re going to check it every few minutes anyway. So, why do you need a machine telling you to look at it? Who’s in charge here? Your phone or you?
- Start your day with meditation - Okay, I have not quite mastered doing this one yet. I believe that meditation is calming, centering and helps to set the stage for your day. My current form of meditation involves taking a little more time to drive beautiful back roads past Babson College and the Wellesley Country Club to get to work. I don’t listen to music or the news during that ride. I just take it all in.
- In the morning, get your most important task done first - Often this task is your least favorite or hardest. But once you are done with it, you’ll have an excellent sense of accomplishment for the day. This also means you should not open your email inbox at the beginning of your day. Okay, I did open it this morning but I answered one email that I was expecting and then closed it out. I will respond or delete the rest later.
At the beginning of every client relationship, we map out our clients’ goals and then build the roadmap to get there. Sometimes we are taking a direct route; other times we have to take a detour before completing an important goal. But we always remind them where they are going and help them get there. To us this is dividing the everyday noise from the really important stuff that matters most.
We believe focusing on long-term goals leads to happy, satisfied clients who are less stressed out about investing and life in general. We can’t make the political discourse go away but we can help you keep your eye on your big and most important priorities.
How do you feel about the investing climate? Let me know. We’re here to help.
Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. FPS provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client. Information herein includes opinions and source information that is believed to be reliable. However, such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.