“How is the Market Doing Today?” This is a question I am often asked by clients when we meet to review their financial plan. I am sure that advisors, brokers, and financial planners around the world are asked this very same question every day. What may not be usual, and is often a surprise to my clients, is my response, “I have no idea.” They may be taken aback at first, but then I explain that for those with appropriate long-term financial goals, a properly diversified investment portfolio, and a well-crafted financial plan, the market’s performance on any given day is irrelevant! Furthermore, it is a distraction from what is truly important.
Just as the value of your home on a particular day has no relevance to the enjoyment and utility you receive from owning a home, the value of your portfolio on a given day is immaterial to the role your investments play in your overall financial plan. You have to get past the mental image of a group of investors poring over a stock ticker and then dashing off to effect trades. That is just not how long-term wealth is built.
For those with appropriate long-term financial goals, a properly diversified investment portfolio, and a well-crafted financial plan, the market’s performance on any given day is irrelevant!
Our team of portfolio analysts are constantly monitoring economic conditions and market trends, and they are gauging how these factors will affect our clients’ portfolios. This information is carefully analyzed and used to make strategic investment decisions for our clients. Likewise, our financial advisors are routinely meeting with their clients, gathering information about any changes in their lives that may affect their financial plan, or changes to their goals. Their financial plans are then revised to reflect the new information, the changes are implemented, and the results are monitored. And then the process begins again, for a financial plan is a living document; it is never finished. But among the hundreds of factors that are considered in the creation of a financial plan, I can assure you that how the market is doing today is not among them.
Turn off the financial news channel, relax, and follow your financial plan. If you don’t have a plan, contact CPS Investment Advisors to speak with a fiduciary financial advisor who will help you chart a path to financial freedom.
Rick D. Bernard | MBA, CFP®