Dan Williams, CFA, CFP, Investment Analyst
The holiday season is simply the most complicated (or is it the most complexly simple?) time of the year. The logistics of getting the right presents to and being present at the right places at the right times is headache inducing. Yet at the same time, this is family time. We as a species spent the vast majority of our time on this planet living and dying with our tribe. This time of the year is an attempt to return to that way of living for a little bit as the concerns of modern living are put on the backburner. What does any of this have to do with investing? Simply that, much like the holidays, we often make them much more complicated than they need to be. But, investing and saving for the future, much like family, is among the most important things in life.
Consider the volatility that we often find ourselves focusing on with our investments. Focusing on the movements of our investments on a daily basis for goals 10+ years in the future is similar to asking if “are we there yet” 10 minutes into a 6-hour drive to grandma’s house for Christmas. There may be detours and alterations made to our trip but always the end destination should be in mind. While the journey may not be as smooth as we like, the end goal is a long ways off for most of us and obsessing about the minutiae of the interim will only add stress.
Consider the alarm that many feel with evidence that China may soon surpass the United States as the largest world economy. Given that the Shang dynasty ruled over a well-organized and civilized northern China over 3,500 years ago and China has a population almost four times that of the United States, the question is not how China is positioned to be the world’s largest economy but rather what took them so long. Being envious of China is like a three-person household in the largest house on the block being alarmed that the overflowing 10+ person household down the street is getting an addition put on their house. It is about time frankly and life is still very much better on a per person basis where you are! Also, economic success is not a zero-sum game. If the house of the US is in good order and prospering, we should welcome the success of the households of our economic neighbors. With that said, this is not to excuse our neighbors taking our stuff (whether it be a snow shovel, hedge clippers, or intellectual capital). We all should strive to be good neighbors.
None of this is to say we should be complacent regarding investment management and economy. Rather we should keep perspective on the time horizons of our goals and judge our success in the absolute terms of how we are improving and not on a relative basis of keeping up with our neighbors. Also, remember what is truly important and enjoy the holidays. I hope we all get to spend them with the important people in our lives.
The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a registered investment advisor.