How to Reach Your Long-Term Goals
As an investor, being uncomfortable at times helps you get to where you want to be and reach your long-term goals.
Warren Buffett once said, “Investing is simple, but not easy.”
That sounds like a contradiction, right? Well, in real life, simplicity has very little to do with ease. Take losing weight, for example. All you have to do is burn more calories than you take in. It’s simple, but not so easy.
The path to our long-term goals is usually filled with conflicting short-term desires. Investors want long-term returns, safety, and security. They want enough income to last them throughout retirement, and they certainly don’t want to go through another 2008 or 2009.
Many investors lack the emotional fortitude and/or the patience to stick with their plan when times get tough. We all have the best intentions, but sometimes we make decisions specifically to satisfy our emotional urges. These decisions may make us feel good at the time, but they can come at a significant cost to our long-term goals.
According to a report by J.P. Morgan, over the past 20 years, six of the 10 best investment days occurred within two weeks of the 10 worst days. If you were an investor between January 1998 and December 2017, your total return would have been 7.2%. If you would’ve missed the 10 best days during that time period, your return would’ve dropped to 3.5%. If you would’ve missed 20 of the best days, your return would’ve dropped to 1.1%. If you would’ve missed 30 of the best days, your return would’ve been -0.9%.
As investors, being uncomfortable at times is the price we pay to get above-average returns. Being uncomfortable sometimes helps us get to where we want to be. I can’t predict the market, but what I can do is counsel you and make sure that you make the best decisions in order to reach your long-term goals.
If you have any questions about how I can help you reach your long-term goals or there’s anything else I can assist you with, don’t hesitate to call or email me. I’d be glad to help you.
Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
Views expressed are those of Jeff Green and Kevin Price and are not necessarily those of Raymond James and are subject to change without notice.
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