Last weekend we finally made the time to take out our motor home out and headed to our favorite ocean spot over on the east coast.
During the summer we hit the road quite regularly and have an established system for preparing for departure. Since it had been awhile since we’d gone out I had to think back to the early days of our RV career when we consulted a detailed checklist prior to rolling down the driveway.
The first RV was a gently used 1984 Georgie Boy Class A gas-guzzling dinosaur with a zillion miles. We started out with a small financial commitment to this new adventure to make sure it was really for us. The phenomenon of “Big-Boatitis” also exists in the RV world. It wasn’t long before we traded up for something shinier and bigger.
Over the years we’ve had a few big-rigs but ultimately down-sized to something better suited to our needs as they are today.
Whether we’re heading across the state for a weekend or planning a longer trip, the importance of preparation is the same. Once the destination is decided we need to map out our route. Hold on, here comes the investment analogy.
Pilot to co-pilot
Longterm investing is a little like a cross-country road trip. You may be the driver but a navigator will certainly come in handy. Do you want to do all the driving or will you be sharing the responsibility with someone else? Pete is the pilot of our rig but he knows that I’m capable and willing to jump in the driver’s seat if he needs me which takes a great deal of weight off of his shoulders.
What route will you take? Choices between the most direct or the fewest tolls come up when I program the GPS. It’s hard to imagine going back to the self-service days of maps. We do have a great guide called “The Next Exit” that takes a lot of the guess work out of what to expect along the way and tells us what will be at that next exit.
Too bad there isn’t something like that for our investment journeys. Even with the “set-it and forget-it” GPS autopilot mentality we still need to have a visualization of the big picture and be ready for the unexpected.
Taxes and fees can be viewed as the tolls along the investment road. How do you negotiate your way through these in the most efficient manner? There will certainly be traffic and road construction to contend with along the way much like the market turmoil that we’re navigating right now.
There will always be turns, hills and detours; count on it. Resiliency in the face of adversity allows us to overcome challenges we find on the journey. Being aware of potential pit falls before they occur gives us a much better chance of steering through them with the least amount of stress. Watch out for these on your lifelong investment journey.
‘Top ten trading mistakes’
1. Getting greedy — There’s three kinds of animals on Wall Street — bulls, bears and pigs.
2. Trading on emotion
3. Not having a plan
4. Paralysis of analysis — Overdosing on information in our society is a temptation to watch for.
5. Get rich quick mentality — There is no easier softer way. Beware if bumps, bruises and sharp turns along the way.
6. Ignoring risk — There is no riskless investment — do your homework and understand.
7. Short attention span — Beware of the flash in the pan, look for commitment.
8. Putting all your eggs in one basket.
9. Trading on rumors.
10. Investing money you can’t afford to lose.
An important concept we thankfully adhered to at the beginning of our RV career was to start out small and to remain teachable. The first part of the learning curve is the steepest. Know when to make necessary modifications to adapt to lifestyle changes, whatever they may be. Remember to modify, rebalance and reallocate when necessary.
The good news is that you always have choices. When faced with an obstacle, you can turn around and go home. You can pull over to the side of the road. You can try a different route. Or you can continue.
You have the same options with investments. You can turn around and sell everything. You can pull over into a money market fund. You can try different investments or you can continue. Determining what the right answers for you are is the challenge.
The bottom line is that there are people available to help you make this journey — but we can’t make it for you. Find the right people to help you with the ride of your lifetime.
Darcie Guerin, Financial Advisor & Branch Manager, Raymond James & Associates, Inc. located at 606 Bald Eagle Drive, Suite 401, Marco Island, and FL 34145 provides this article. If you have questions please contact Darcie Guerin via e-mail at Darcie.Guerin@RaymondJames.com. Phone (239) 389-1041, toll free (866)-343-0882 or at RaymondJames.com/Darcie. Past performance may not be indicative of future results.