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timing

Target Date Planning- The Fallacy of Better

Investing on "auto pilot" presupposes that the auto-pilot is focused on you. It's not, it's focused on the mode of transportation, not the occupants. 

Investing on "auto pilot" presupposes that the auto-pilot is focused on you. It's not, it's focused on the mode of transportation, not the occupants. 

Don't worry, things will get better.

At least until they fall apart again.

We live under a great misconception; that there's a path in life that leads to an evenness of things. We're confident that during that time when most if not all of the tumult is gone, that we'll do our best work, accomplish our biggest goals and gain the foothold we need to make genuine and worthwhie progress.

Reality is that life won't ever be in that place for more than a fleeting moment. Just as assuredly as things will come together is the knowing that at some point, they'll all fall apart again. It's the cycle of life that we all face.

Our peace and resilience comes not in finding that special place where it all fits, but rather in learning to prosper in the search for it, mainly because the search for it is our lives.

We can forestall progress and growth forever waiting for the day that it all fits or we can build our lives in spite of the fact that it won't. If we can learn to focus and do our best work when it's hardest, then we'll just be that much better when the brief time comes when it's all seemingly hanging together. Ever hear a singer/songwriter or author talk about how they do their best work during times when it's all coming unglued?

Bottom line is, don't wait. Don't wait till you have things all lined up before you start whatever it is you need to get started on, whether it's investing, saving or abandoning an old strategy in favor of a new one.

As hard as it might be to believe, our peace lies amidst the chaos of change.

Planning for transitions is imperative because our lives will be almost nothing but them.

"The Optimists Greed"

If you've worked with a stockbroker you're familiar with the phone calls about the next "can't miss" investment. Your optimist mind kicks in and your sense is to "go for it." The rationale behind the investment sounds reasonable and after all, your brokers got access to all that research.

Is it really about making as much as you can, or is it about making what you need?

Is it really about making as much as you can, or is it about making what you need?

Every trade results in your broker making money, the brokerage firm making money and if you're buying mutual funds or insurance products, there's a company in that profit chain too and they make money as well. But what about you, do you make money?

Just like sitting at the black-jack table...sometimes yes and sometimes no.

When we walk into a casino, everything around us tells us that we can win. Even though we know in our hearts that the odds are stacked against us, the thought of winning big overwhelms our decision making. Advertisers, marketers and slick ad agencies understand this and that's why they spin their message to play on our optimist mind. Optimists trade more stocks/gamble more money, create more commissions and transaction costs/lose more money than pessimists do. Many investors have more in common with gamblers than they think; gambling that they can pick the right investments and someday reach their goals.

So the odds are stacked against us from the start.

As if this weren't daunting enough of a task, let's take the next piece of the puzzle.

We'd like to think that the stock market is a free market. That with expertise and information we can make informed decisions that will win the day. Well, it doesn't work exactly like that. Often times, your investment company has figured out how to profit on your investing even if it doesn't make you any money. The sub-prime mortgage debacle was a classic example and surely not the only time that investment companies have been the direct benefactor of their investor's failures. So now we've come to realize that we're not playing the investment game pitted only against the market as we thought. We're playing against the market and our adversaries. Yes, it's true that there are people out there that are betting against you, betting that you'll lose your money. And they're smart, talented and experienced at beating investors out of their money.

What is an investor to do? Is there actually a way to prosper and "win the losers game?"

First thing is to stop gambling and start investing. Develop long-term goals and then tailor a plan to get there. Part of that plan should include an investment policy designed to help you make consistent progress towards your goals by enhancing your decision making not clouding it. Navigating the world of investing for the uninformed may be treacherous, but for the true investment professional armed with unbiased advice the effort is much simpler.

Second, do some research and find out who you can trust. There are investment professionals that are basing their success and reputation on their ability to put your best interets above all others. That's as opposed to investment professionals who have done everything within their power to fight any regulation forcing them to put any interests above their own and why exactly is that do you think?

This sounds like a lot of work and it is..getting it right takes some real effort. In the end, you'll find all your work worth it, the payoff outweighs the work involved to make the right choices.

In conclusion, optimism is a good thing, but don't let yourself be manipulated by your own positive thinking. Hire a professional who can protect you from yourself and your adversaries.