October 21, 2010
"We cannot direct the wind, but we can adjust the sails."
-Bertha Callaway, historian
It is not for us to choose the times in which we get to invest. It is only for us to decide what to do with our investments in the time that we are given. Most of us have somewhere to be and standing still is the surest way to not get there. So we all must set sail somehow.
By now it is no secret that the past twelve years has been an unfortunate time to invest and especially to retire. The headlines of a lost decade now seem trite yet stir an uncomfortable feeling of lost opportunity and, most damagingly, lost faith. The frustration is still real and it's hard to blame people for their pessimism on the next ten years. Headlines du jour do not help. The new mortgage crisis, congressional elections, global austerity measures all serve to remind us of storm clouds on the horizon. In spite of these, the markets continue to rally.
It is easy for us to understand that if we had not invested in growth assets at many points over the past ten years we would be better off today. However, assuming that our recent experience will be true for the next ten years would have caused us to miss a significant rebound. It is hard to know what to do. It is hard not to believe that the difference between success and failure is luck because we simply cannot predict what will happen next month or even next year.
If we cannot invest based on prediction, all we are left with is investing based on principal. The markets will happen to us. Being disciplined about respecting the investment principals that have proven successful over the long-term is the only reliable difference between our success and our failure. These principals are the tools that will build your ship strong enough to make it through rough seas. Knowing these principals and sticking to them is very hard and is the reason why everyone needs professional advice.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).