“Begin with the end in mind.”

This quote from Steven Covey is one of my all-time favorites. One of the most important things that you can do to help you realize your financial goals is to develop a strategy to help you reach those goals, and then stick to that strategy. It is much easier to change course at every sign of difficulty than it is to stick with a long-term strategy through the ups and downs of the cycle.

I know, our personal and professional problems are overwhelming, competitors’ muscle into our industries, our desks piled high with papers and our inboxes overflow with messages. The grind of work wears us down and seems to never stop. We’re overfed and undernourished. Overstimulated over scheduled, we feel that we must act at all times 

 

This NEED to act often serves people poorly when it comes to the markets and their financial plan. People watch a strategy do well, and they end up getting greedy. They buy in at the top of the market and when that strategy has some difficulty, they get fearful and sell near the bottom. Then, they wait on the sidelines for that perfect moment to know it’s safe to invest, usually near the next top, and repeat this step until broke. 

We saw this type of human action in full effect several times over the last few decades. In the “Dot-com Bubble” of the late 1990s and early 2000s, and once again in the Great Financial Crisis. 

We have seen this pattern of behavior over and over again throughout the history of humankind. It is simply human nature to get greedy and to double down and then lose all ability to look back into the last time there was a downturn. 

It is also only natural for us to get fearful when we see negative reactions in the market. 

These are the type of instincts that served us well when we were prey ourselves. When we were the ones being hunted on the plains without the access to modern medicine to help us recover from an animal attack. 

Fear may be as old as life on Earth. It is a fundamental, deeply wired reaction, evolved over the history of biology, to protect organisms against perceived threat to their integrity or existence. 

Our brains are not naturally equipped to deal with the ups and downs of the markets. We need to act appropriately and be able to overcome that part of our brains. It is not easy to do.

It is only natural to feel anxious when the market has a downturn. It can cause us to panic, and we begin to enter our fight or flight response, and that can often lead us to poor decisions. When this situation comes up, we need to have a thoughtful plan that has been laid out to help us reach success. We need to stay true to our plan. The worst time to jump out of a ship is in the middle of a storm.

If our end destination has not changed, it is unlikely that we should change our course of action just because the world around us is throwing us additional stimulation.

It is easy to take action for actions sake. But is rarely that the best course of action at a time like now, when markets are at increased volatility 

This is not to say that we should not adjust your plan over time. The only thing that is constant is change. However, we should make those changes when our minds have clarity. In the heat of the moment, we often lack that clarity, that stillness hat is essential to proper planning.

If you are a couple in your 40s, focus on what’s going to happen over your next five decades not what’s going to happen over your next five days, and you will be better served

I opened with the quote from Stephen Covey, “Begin with the end in mind.” Your plan should begin with where it is you want to end up, with your values, your true goals. It is that plan that should lead your decisions, not the news headlines or what the neighbors are doing. Stay true to your own values and goals, despite the obstacles laid out before you, and you will find that you will get to where you truly want to be and have enjoyed the journey to get there.

I am Christopher Clepp, and this has been your bridge towards wealth