Weekly Financial Wisdom 7/17/24

This weekly dose of financial wisdom is brought to you by a registered investment advisor and CERTIFIED FINANCIAL PLANNER? with over five years of experience in financial services. As a reminder, it is important to consider the source when receiving financial advice. You can research a practitioner's credentials by visiting www.brokercheck.com. It is also important to remember that there is a difference between personalized financial advice and financial education. The topic discussed in this blog is intended to be educational in nature and should not be construed as personalized financial advice.

I have spoken with several people over the last couple of months who say they 'set it and forget it'. They were talking about their investments and their contribution amounts. In one regard, this is a good practice. Good in the sense that putting a certain amount of money away each month and 'forgetting about it' is both a disciplined habit and establishes a foregone conclusion that the money no longer exists present-day....it is meant to be used for a future goal. Similarly, with investments that are allocated for the long term, it can be useful to set it and forget it, which is the opposite of biting one's nails looking at the stock market everyday and obsessing over every little dip in performance. The latter is often useful in day trading, not so much for longer term investing.

Where the 'set it and forget it' mindset could become problematic is in the case of assuming it's just as easy as 1-2-3. Let me assure you, it's not. For example, let's consider the double-digit market decline in 2008. The stock market is cyclical, just like the economy is. It's important to take several factors into consideration: being attuned to market trends, personal risk tolerance, time horizon and financial goals. Each of the factors I just listed are a deep well of consideration in their own right and in my experience, less than 20% of the population has enough knowledge to properly manage their investments.?

Take a moment to pause, reflect and ask yourself if 'setting it and forgetting it' is an adequate practice for your financial goals and perhaps worthy of further consideration.?

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