How to take the stress out of investing
Treat it like a well planning holiday by Jason Lurie
A few years ago, I took my children for a week of fun, sports, and adventure to Center Parcs in Belgium. That week wasn’t particularly hot or sunny, in fact in rained all day Tuesday and Wednesday. Did this affect our enjoyment at all? Not one bit, in fact we had a great time, perhaps even better because of the weather.
How can this be? Well, on Tuesday I had booked waterskiing for us, and since you get very wet waterskiing and the children had wetsuits, the rain didn’t bother us. In fact for some reason it kept the other holidaymakers away so we had the waterski centre virtually to ourselves. On Wednesday the rain was light and soft and it cooled us all down during a manic game of ‘Laser Battle’ (like paintball but without the safety gear and goggles – which always steam my glasses up). As the Sex Pistols once said “I don’t wanna holiday in the sun….”
Thinking of this reminded me of an article I read a while back, written by Jim Parker of Dimensional, called The Vacationers Guide to Investing:
Two colleagues went on vacation separately. One had a great time. The other had a miserable experience. Their respective stories provide valuable lessons, not just about taking a holiday, but about investment.
Frances booked a beach house up the coast for a week. Brian opted for six nights of bush walking through the mountains. Frances returned to work, rested and recharged. Brian came back a jibbering wreck. What happened?
Brian is a last-minute kind of guy. He’d heard about outdoor excursions from a stranger and decided on impulse to book a rugged ‘alpine adventure’. The problem was his urgency left him little room to negotiate over price or service. And the package he chose was not the one his acquaintance had recommended.
The brochures promised sunlit vistas and invigorating nights in the open under canvas. But the weather wasn’t kind. It rained every day. Brian’s hired gear, which he’d organised at the last moment, was inadequate. His shoes fell apart, the tent leaked and he, quickly discovered, he hated bushwalking.
It rained on Frances’ holiday, too. But she hadn’t invested all her expectations into lying on the beach. Anticipating all climates, she’d packed books to catch up on, along with a painting kit, crossword puzzles and a guide to local galleries and cafes.
Having planned her vacation months in advance, Frances also had had a chance to think about her desired end experience. It wasn’t so much the beach she was looking forward to. It was the solitude, and quiet and chance to refocus.
Frances had taken advice about the holiday from a friend who had known her for years, understood her tastes and values and knew her tolerances.
Brian, on the other hand, was so focused on someone else’s vision that he had no idea what he was trying to achieve. The advice he received was from a complete stranger and he had never really articulated to himself the goal of his trip.
His impulse-buying meant he had spent too much on an experience that wasn’t right for him anyway and which left him no control or choice over his destiny.
The point of this story is to show that investing is a little bit like planning a vacation. There are always going to be things outside your control, like the weather. But you can mitigate that by packing well and diversifying your activities.
Not doing it all on impulse or at the last moment gives you more flexibility around cost and design. And thinking clearly about who you are and what you are trying to achieve lessens the chance of taking inappropriate risks.
Seeking counsel beforehand is best done through someone who knows you, understands what you value and appreciates what you are prepared to risk.
Most of all, like most things in life, the journey and the destination shouldn’t really be separated. Where we are trying to go through investment and how we are trying to get there are often one and the same.
Once we understand all that, holidays (and investment) can be much more successful and much less stressful.
If you want to know more about how our financial planning process can help you, or perhaps want a second opinion on your own planning or investment strategy please get in touch:
020 8943 9229, or via email at jason.lurie@hhw-uk.com
You can visit our website at www.hhw-uk.com.
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This article is for information purposes and should not be treated as advice. Individual circumstances should always be considered prior to purchasing any financial products. For further information please contact your Wealth Planner.
Any views expressed above are based on information received from a variety of sources which we believe to be reliable but are not guaranteed as to accuracy or completeness. Any expressions of opinion are subject to change without notice. Past performance is not a reliable indicator of future results. Investing involves risk and the value of investments and the income from them may fall as well as rise and is not guaranteed. Investors may not get back the original amount invested.
Cover photo thanks to Jo Robbens Photography
