Sometimes the best investment strategy in theory isn’t the right investment strategy for you. If you are unable to sleep at night worrying about the outcome of the election, or that market event is going to derail your whole retirement, then no matter what the “experts” say is the appropriate allocation, it isn’t the right one for you.
An investment strategy can be sound in theory, but if it doesn’t align with your objectives, risk tolerance, and time horizon it isn’t going to be the best strategy for you in reality. The best investment strategy for you is one that you will stick to, not one that will cause you to worry about returns from the market or events beyond your control.
The recent election was a contentious contest between two very polarizing candidates. Many client’s felt that if their candidate didn’t win it would be Armageddon for the market and the country as a whole. Although these clients weren’t behaving rationally, we had to adjust their investment strategy so that they were comfortable that no matter what the outcome, they felt safe. For many clients, this meant raising a large amount of cash, even though that may not be the best allocation for their long term returns it allowed them to remain invested and stick to the revised plan through the uncertainty.
That is why we believe there is immense value in doing financial planning as the first step to establishing the investment plan that is right for you. Specifically tailored advice can only be provided after looking holistically at all aspects of your financial situation and formulating an investment strategy that is the best for you.