The Importance of Keeping Focus on the Things YOU Control

If you’ve ever tried to teach a child to ride a bike without training wheels, you’re probably familiar with the following scenario.

The kid is on the bike, feet on the pedals, hands on the handlebars. You the adult are holding firmly onto the back of the bike seat. The strategy is to keep the bike upright as the child starts pedaling until they’ve gained enough speed to balance on their own. Then you surreptitiously let go of the bike seat. And before the child realizes it, they are pedaling the bike on their own.

However, this teaching method breaks down when you have a cautious child who wants to know at all times whether or not you’re still holding onto the seat. Instead of focusing on pedaling and steering, they lean around to keep a good view of your hand. This makes it impossible to balance and steer the bike on their own.

Until they focus on what they have control over, they are not going to learn to ride the bike.

The same principle applies to investing for retirement. Success is most likely when you give much less attention to the things you have no control over.

For example, if you’re constantly monitoring the short-term behavior of the market, with the hope of somehow anticipating what it’s about to do next, you’ll not only fail to outsmart it, but you’ll also inhibit your ability to take action on the things can control.

Cosmo DeStafano, a retired CPA and best-selling financial author, observes that bull and bear markets are beyond our control—simply the luck of the draw. “So,” he says, “it’s crucial to concentrate on the factors that are in your control: the amount of your monthly contribution and withdrawals, setting realistic goals, making informed investment choices, and adhering to a dynamic planning process.”1

In other words, concentrate on pedaling the bike and being ready to steer as necessary.

A falling market can be a strong temptation to abandon your plan and take short-term action. But an even stronger lure can be when you think you’re somehow missing out on market-beating gains. John Pierpont Morgan, one of the greatest capitalists in American history, observed, “Nothing so undermines your financial judgment as the sight of your neighbor getting rich.”2

It’s also helpful to remember that the person who brags about their short-term investing acumen will most likely be quiet when their trades result in a loss.

The prudent investor knows that his or her best chance of success will come from maintaining their focus. They will continue to do the right things even when the results aren’t immediately apparent. And they will take advantage of the guidance of a trusted fiduciary financial advisor to create a dynamic plan, allowing themselves to be held accountable to stick to it.

If you ever have any questions about your investments or retirement plans, please feel free to give me a call at 801-545-0696.

Regards,
Mark Lund
Stonecreek Wealth Advisors, Inc.
11576 S State Street, Bldg. 1002
Draper, UT 84020

Sources:
1. http://go.pardot.com/e/91522/ng-consider-the-entire-journey/95qzfl/2494541669/h/2eQNigT5QGcPU5bxuC9fiKyJhSyxfUuSJ-F-DJ3Nknk
2. http://go.pardot.com/e/91522/jp-morgan-quotes-/95qzfp/2494541669/h/2eQNigT5QGcPU5bxuC9fiKyJhSyxfUuSJ-F-DJ3Nknk

Disclosure:
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by Efficient Advisors, LLC (“EA’) for Mark Lund, Mark is a Fiduciary Financial Advisor in Utah. He is known as a Wealth Advisor, The 401k Advisor, Investor Coach, Financial Planner, Investment Advisor and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment management and retirement planning for individuals and 401k consulting for small businesses. Mark’s newsletter is called The Effective Investor Newsletter. Cities served in Utah are: Salt Lake City, Salt Lake County, Utah County, Park City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, American Fork City. The views expressed herein are exclusively those of Efficient Advisors, LLC (‘EA’), and are not meant as investment advice and are subject to change. All charts and graphs are presented for informational and analytical purposes only. No chart or graph is intended to be used as a guide to investing. EA portfolios may contain specific securities that have been mentioned herein. EA makes no claim as to the suitability of these securities. Past performance is not a guarantee of future performance. Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such. All opinions expressed herein are subject to change without notice. This information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. You should note that security values may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk. These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.

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