, Newburyport, MA

December 10, 2013

Missing opportunities for your future?

Money Matters
Donald E. Askey

---- — Nothing feels worse than sitting on the sidelines and thinking everybody else is gaining on you. The news keeps coming in: The markets are doing well and the future’s looking brighter.

Before you jump into the stock market or before you even think about dialing up your exposure to stocks, pause and ask yourself: “What is driving my appetite for greater return?”

Make sure it isn’t your neighbors, friends, family and co-workers who make you feel you’ve missed the boat. Make sure the media hype isn’t influencing your thinking.

If you have not recently stepped back far enough from the daily noise to assess clearly what your investment objectives are and the purpose of your investments long term, then this time in December and early January would be excellent for you to ask and answer a couple of questions: What purpose do my investments serve? What are my financial objectives, long term and short term? Am I on course to meeting my objectives?

If you can answer these questions clearly for yourself and your family, you may be in the ideal position of ignoring the financial noise in today’s media altogether. Once you’ve articulated your goals, preferably written them down, you have taken the first and soundest step toward financial peace of mind.

Now you have to determine whether you are implementing the steps necessary to meet those goals. Usually you then have to answer questions such as these: Am I saving enough? Am I saving enough in the right kind of account, a tax-deferred 401(k) or a taxable brokerage account? And then, are my investments exposed to stocks and bonds in proportions aligned with my goals and my tolerance for volatility?

This last question is not easily answered and its answer can vary with market conditions, your age, and the closeness of reaching your goals. What’s important here in your considering the weight you have in stocks relative to the weight you have in bonds should NOT be driven by market activity. The answer to determining where you should be cannot be found in the market, in the media or at the water cooler.

Your allocation should be based on what’s going on in your life and not in the lives of your neighbors, friends, co-workers and certainly not based on the views of media-hungry financial prognosticators. None of them knows you or what you’ve planned out for yourself and your family.

If you come into a year like 2013 with 20 percent-plus in stock-market gains without clarity about your financial course and without an allocation prescription already in place, you will be buffeted around by the market swings and you will be seduced by the new highs. But don’t jump in without a plan of your own; and if you do have one, don’t change course abruptly.

Promise yourself you won’t go into 2014 without giving your money purpose and without laying out a course that has a high probability of meeting your goals and an allocation (this percentage in stocks, that percentage in bonds) that suits your temperament and your goals. If you keep this promise to yourself, you will not be plagued by second thoughts at every up and down of the market or by every hint from whatever the source that you are missing opportunities.


Donald E. Askey, a fee-only financial adviser and planner at Oakmont Partners LLC with offices in Amesbury and Boston, can be reached at