No Pain, No Gain.

The phrase “No Pain, No Gain” is likely a familiar one to you.  We most often associate this phrase with exercise.  In many areas of life, if we want long term success then we battle through short term frustrations or forgo short term pleasure.

There are times when we feel like everything is going our way!  There are other times when we can’t buy a break.  This is life.  The lucky and unlucky times balance out over the long term and time-tested principles of good habits, hard work, respect for others, and responsible spending typically leads to a successful life!  This is not guaranteed, but our odds go way up if we are disciplined and focus on long term objectives.

Your long-term investment portfolio success may also present difficult short-term choices.  It may take courage to invest in asset classes that have recently underperformed or to sell investments which are doing well.  In my almost 35 years helping people make planning and investment decisions, I’ve read countless studies about retail investors chasing rate of return.  “Chasing rate of return” means the amateur looks at past performance and buys the investments that have recently done the best.  To raise cash to buy the “best”, they sell investments that have recently done the worst.  This ‘sell low, buy high’ approach often leads to frustration and disappointment in the long term.

At PCA, we are a strategic planning firm.  Our clients take investment risk consistent with their comfort level and the purpose for their money.  Stock market declines can be healthy for well managed investment portfolios over the long term.  That’s right, healthy!  Volatility shakes out the amateurs and causes fear among investors focused on the short term.  This results in great opportunities for institutional investors like PCA and clients focused long term.  Quality strategic planning should prevent any lifestyle impact if there is a 10%, 15% or 20%+ downturn in the stock market.  After all, you are in total control of how much of your portfolio you expose to losses. This is not guaranteed, but our odds go way up if we are disciplined and focus on long-term objectives.

Here’s a quick test.  When you meet with your advisor, do you talk more about specific investments and performance, or do you focus on what is going on in your life and the future you want?  If you are talking about products, then you are probably working with a product salesperson and not a Fiduciary.  Performance is important.  However, short term performance is not something that can be controlled.  Let’s discuss the purpose for your money, emphasize what you and PCA have control of, then implement tax-efficient strategic planning for your long-term financial success!

Disclosures: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Past performance does not guarantee future results.