Rollercoaster of Life
It seems that all of humankind can be placed in two groups: those that love rollercoasters and those that hate them. Some willfully seek the thrill of hurtling toward the ground and being whipped around tight corners, while others would be just fine watching from below. For rollercoaster fans, the reward is a (hopefully) safe thrill and the rollercoaster non-fans get to enjoy a peaceful break.
Which group are you in?
As with rollercoasters, some of us seek controlled risk because we anticipate a thrilling reward. Others, avoid the risk and still enjoy the rewards of calm and peace. The ultimate determinate is how we view fear: is it a friend or foe?
Note: The photo above is actually of an art installation, and is a walkway, not a rollercoaster.
Fear = Friend
Fear is an industry. People seek a thrill through movies, amusement parks, escape rooms, and all manner of extreme sports. Why? Fear can help us feel strong emotions and even feel more alive. Fear is also known to improve our performance on the athletic field and in the classroom or office. It provides some necessary adrenaline and focus that we simply cannot prompt on our own. Fear is a great motivator and catalyst to improvement, change, and success.
Fear = Foe
Fear can hinder us and cause us to literally freeze at an important time when action is required. Fear rattles us and holds us back when we are on the brink of improvement or success. If we allow fear to dominate our thoughts, it is unlikely we will be able to think and act rationally. Once irrational behavior sets in, we stumble.
Fearful Thoughts and Reflections
So is fear a friend or foe?
Obviously, it is both. The key is to recognize it, use it, and master it in order to harness it for our advantage. That can also mean we learn to negate it so that it does not hinder us.
How can investors address fear?
Goal
The first and best way to address investing (or financial) fear is to determine the goal you want to fund. Are you saving for a new car or for retirement? Those are radically different goals time-wise which will greatly affect how the investor positions their funds.
Timeline
With any goal comes a timeline. Will you purchase a new car in six months or five years? Are you about to retire or do you have another forty years?
Risk Tolerance
Next, the longer-term investors (i.e., retirement), should complete a Risk Tolerance Survey or other questionnaire that allows them to both objectively and subjectively determine how they should allocate their investments. A typical survey will provide a ratio of stocks and bonds that match the investor's tolerance for volatility.
These three steps (goal determination, timeline and risk tolerance), help remove uncertainty and mystery by determining the critical variables that lead to investing success.
Stay the Course
The final step is the most important: stay the course. Too many investors have allowed market turmoil, investing fads, or a "sure thing stock tip" from a friend to sidetrack their plan. Countless research papers have determined that investors' irrational actions leads to financial loss.
This reminds me of an event in the New Testament when Peter encounters Jesus walking on water. Peter shows courage by saying, "tell me to come to you on the water." Peter climbed out of the boat, walked on the water, and approached Jesus. But then something happened that (metaphorically) happens to ALL investors. In Matthew 14:30 we read, "But when he (Peter) saw the wind, he was afraid and, beginning to sink, he cried out, 'Lord, save me!'" Note that it was the wind that Peter noticed, not the water. Note also that Peter had to take his eyes off Christ to "see" the wind. Unfortunately, this kind of experience is all too familiar to investors.
Summary
As investors, we can anticipate and mitigate fear. By taking a rational, structured approach in your financial planning, you can make substantive progress in your goals. Along the way, it will be critical to ignore the distractions and fluctuations and the "wind" that is certain to occur. In the end, you will be rewarded.
Laissez les bons temps rouler
Mary's Recipe Corner
Monster Munch
With fall and football season upon us, we thought it would be good to share a recipe that is designed to be shared.
Definitely a family favorite. So easy! The first time I made it was for a Halloween Party several years ago, hence the name, but it can be themed for any holiday or occasion. The amounts are just suggestions, as this can easily be adjusted to your preferences.
• 12 oz white chocolate or almond bark, melted (I always get more since I don’t really measure this and put the amount that looks right)
• 1 Bag pretzel sticks
• 1 Box Golden Grahams
• 1 Bag M&M’s (regular, special flavored, or colored for the holiday)
• Optional:
o Sprinkles
o Marshmallows (only good the day made, as they get stale the next day)
Place some of the pretzels, cereal, and M&M’s (and if desired marshmallows) in a large bowl and pour over melted chocolate or almond bark. You are looking for it to lightly coat the ingredients, avoid putting too much. This is where I add more of anything I think it needs. Pour out on wax paper (top with sprinkles, if using) and refrigerate until solid. Break apart and store in an airtight container.
Bon appétit!
For Art's Sake
As some of you may know, I am an art enthusiast. If you grow up in New Orleans you learn to appreciate art (and food and music and parades, etc.), so it seems appropriate to share a bit of our culture with our readers.
Roy Lichenstein (1923-1997), is considered one of America's premier pop artists. Sometimes using parody and comic strips as inspiration, Roy captured many mundane and common images, yet with an emphasis on raw emotion and drama.
The image depicted here, Blam, captures every aviator's worst fear -- falling from the sky. Yet it is that same fear that prompted the pilot to safely eject, (as seen in the almost ghostly black figure emerging from the open cockpit).
As in all things in life, fear can be both a friend and a foe. Sometimes, the choice is ours to make.
