Prophet’s, Profits, & New Year’s Resolutions

For those who watch CNBC, Bloomberg, Fox Business, every day presents a new set of challenges. Some guests tell you that 2020 will be great because….insert any number of reasons. After the commercial break, another guest will let you know why you should run for the hills, stock up on non-perishable food, and invest in….insert any investment.

While entertaining, this can be extremely unnerving for the everyday retirement plan investor. With hindsight being 2020, Google “2019 market predictions”. You will get a whole host of correct and incorrect projections. Many thought the market was set for a major pullback in 2019. That obviously didn’t happen. Remember the major pullback from the fourth quarter of 2018? Fortunately, not many investors do because we are so hyper focused on the latest news.

What about the China/US trade war? You will read a lot about it in those 2019 predictions but it still didn’t prevent the market from providing very strong returns. What about that inverted yield curve? Exactly, it still could be signaling a recession but when is pretty tricky to solve.

So what should you do? Like any investor, you will want to start with the stuff that puts you to sleep. Do you have a basic budget? Are you spending less than you are making? Are you saving at an appropriate rate? If you checked all three of those boxes (most Americans don’t), then we can proceed to asset allocation discussions. Those will inevitably be focused on your time horizon, risk tolerance, retirement income replacement needs, and all sorts of other stuff that you would probably rather push off until you have more time. Unfortunately, the one prediction we will make is that you won’t have more time for this sort of thing until it is an immediate problem. So focus on the present and start that New Year’s Resolution today.

The only other prediction we will make is that or prediction for 2021 will be as boring as our prediction for 2020. Focus on the stuff you can control and spend your time enjoying the journey. Your focusing on the market & investment news will only leave you more confused and less likely to succeed on a long term path to financial success. The key being…long term!