A Better Experience
Unfortunately for my son Coleman, he had to have a tooth extracted last week for the second time in is short life. The first time was because he banged his mouth on the side of a coffee table and caused one of his front teeth to die (Ouch! It hurts to even write that!). That tooth needed to be pulled in order to avoid infection. This past week, Coleman had to have a baby tooth pulled to make way for an adult tooth, which was quickly growing over the smaller one.
The pediatric dentist to whom we take all of our children really does a great job creating a comfortable environment and making the experience as painless as possible. She doesn’t use words like “pull” or “extract,” both of which have a negative connotation. Instead, she asks if the child is ready for a magic show or some similar, friendlier form of distraction. Yes, my son did wince a little with the Novocain injection, but he was otherwise completely comfortable and had a positive experience. He even got to pick what flavor he wanted to ‘smell’ for his anesthesia mask. For what it’s worth, he chose apple.
Recently, Dimensional Fund Advisors put out a great piece titled “Pursuing A Better Investment Experience – Key Principles to Improve Your Odds of Success.” The article highlights 10 key market and emotional factors that investors should consider and employ in order to maximize return and their experience overall. The 10th point, ‘Focus on What You Can Control,’ is the most pertinent and pretty much encompasses the other 9 points. The other points, such as don’t chase performance, let markets work for you, and don’t try to time the market are all things we can control and should focus on.
One undeniable fact is that the markets will go up and down. Attempting to figure out exactly when and in what sectors this will happen is a fool’s errand, so why focus on that? Instead, we should all focus on making sure our investment mix is appropriate for our situation and stick to that plan. Certainly, a planner or advisor can help you formulate and adjust as needed. And, I think much of our job as advisors is making sure our clients don’t make any sudden moves that would hinder long-term goals. We absolutely make adjustments based on research and valuations, but we will never make drastic moves ‘in’ or ‘out’ of the market like we hear from so many individual investors. Study after study has shown that most investors hurt themselves with these types of moves more than they have helped.
So, short of inhaling your own apple-flavored laughing gas, try to remain calm in the face of volatility and uncertainty. And, know that focusing on what you can control is the best possible solution to a positive investment experience.