If This, Then That…

In All by Brian Imrich

Making a good decision is tough.  I find myself on a life long process of trying to be better at helping people to make the most appropriate decisions.  

It’s not my job to make the decision for them. Armed with a deep understanding of what is important to each client, backed by a firm grasp on all the financial planning techniques, and finally topped off with trying to be balanced and practical, I try and explain the best viable options.

Each decision is hardly ever black or white. They are often gray and that is part of why we review and strategically second guess them each year.  What is frustrating is when I turn on the TV or read the headlines and they are only stated in black and white. Here’s an investment specific example: “Threat of tariffs turn stocks negative on the day.”

The truth is, there is no one single event, person, or country that is even close to single-handedly impacting all the workings and movements in the stock market at any point in time, let alone one trading day.  On an average day, 2 to 6 billion shares are traded on the New York Stock Exchange of all sizes of companies in varying sectors of the market with companies that are spread out in various geographical locations and who are covered by different analysts.

It’s just not accurate to say, “if there are tariffs, the stock market will fall.”

I understand these headlines are fleeting in a digital world and an accelerated news cycle. However, if we move past this one investment example and expand it to all parts of financial planning, this narrow minded “if this, then that” mentality creates many vulnerabilities in your plan.  

“If I buy a new car, not used, I won’t have to worry about it breaking down.” Fast forward 8 months to the middle of winter and the car has a major issue and even if it won’t cost you money, you’ve been in a loaner for two weeks that is awful in the snow.  The right decision was to buy a new car, even if the outcome was wrong.

Making a good decision doesn’t always lead to the best outcome or even close to the outcome you wanted.  It sure is frustrating, but it didn’t make the decision incorrect. The way we balance the unknowns and all the uncertainty in life is to be flexible and to not have the success of your plan pinned to that one outcome.    

Before you bought the car, you also made the decision to not put ALL your savings as a down payment.  Yes, you knew the monthly payment would be higher, but you would still have a nice savings buffer in the bank.  Now if it breaks down, you hit a deer etc…and you need to cover the insurance deductible, your plan and your goals keep marching forward.  

Happy Friday!