There’s a common mistake most investors make. They buy long term investments and then check on them every day.
The 401k, Simple IRA and Roth investor doesn’t do it. You don’t need to. You’ve done the best thing you can possibly do. Educate, automate, and forget it mate. You’ve taken out a big layer of risk when investing which is market timing, or as I call it trying to outsmart the market. If you know something no one else knows then by all means, go ahead and make your move. Most people who know something no one else knows end up spending time in their state’s 0-star accommodations wearing the same outfit.
For the rest of us who don’t know how to make an algorithm, or have a crystal ball, we leverage the time-tested strategies.
Those of you who are participating in retirement plans are either leveraging a fund that is appropriate to you age (target date funds), or are averaging your purchase prices by investing periodically and automatically. And then…..forgetting about it. Or at least only checking it periodically when you get a notification of a statement. You guys are the ones set up for success. Even in a period like the last quarter that was relatively flat, you may have seen some increase in account values because you added to your contribution. If your company matches then bam, a bigger value.
My point here is this: Even when the markets this quarter don’t give you the same results as the previous quarter, as long as you’ve got your investments in line there’s nothing you need to do. This is where doing less can give you more.
Measure yourself against your benchmarks and see how your quarterly performance compares.
Mick Graham, CPM, AIF
Branch Manager Raymond James
Financial Advisor Melbourne, FL