Filosophical Insight_Client Update

Difficulty with Staying the Course

As a trusted advisor, I have two main responsibilities to my clients:

1.      To understand the client's envisioned life and develop a plan that allows for achievement of that life.

2.      To assist my client with dealing with uncertainties that arise from either market movements or unexpected life changes.


Developing and explaining a plan on paper, even implementing the plan, is a key step, but not the most important.  While this step can be complicated, there is little emotion involved.  For the most part this step in the process appeals to your intellect, reasoning and rational thought. Everything is clear and makes logical sense.


The difficulty is staying the course in the face of uncertainty.


Once implementation occurs, your investments go from the nice, clean, white pages of your financial plan to the ups and downs of the market.  Some time goes by, you open your statements and you see that you have less than before, or there has been an unexpected tragedy sending the markets downward.  Now, the intellect is gone, and the emotions take over.


You work hard for your money, and you want it to work hard for you.

I can hear you saying to yourself, “Losses!  That cannot be.  Move the money to what IS making money.  Chase the hot investment.  Find something else; this is not working.”


The problem is markets are unpredictable.


What we know with certainty about the market is that the investor is rewarded for the risks taken over the long run.  Markets do not move in a predictable pattern, but as long as the portfolio equals the market, then you will achieve the market rate of return.


Moving money around to “go after” or “chase” the hot investment may bring temporary emotional relief.  “You’re invested in something that is doing well” you tell yourself.  What has this new investment done to your risk exposure?  Now, it may go up, or it may go down.  What happens if it goes down?  Do you move your money again?  Each movement of your money costs you in transactions fees and possible taxes.

Is your money invested or merely running for its life?


The key is to remove emotion from the investment process.  Develop a plan, a set of actions and when to make changes.  Stay the course in the face of uncertainty, only changing course when the plan calls for action or your life changes.


The purpose of this newsletter is to educate.  Each month, Filosophical Insights will tackle current investment topics in the news.  We will also discuss issues that assist the client in dealing with the uncertainties of investing.  Most of all we will be a reminder to you that your money is working toward the live you envision.


If you would like a copy of this newsletter sent to you via e-mail, please send an e-mail to Subject: Filosophical Insights


If you would like to further discuss your financial affairs, go to the Contact Us section of the website or call 917-916-2207

  • Worked Hard, Saved, Now What?
  • A Life of (Re)balance
  • Difficulty with Staying the Course

  • ©2020 financial filosophy. All rights reserved.