And now, a word from Scott Thomas . . .
“Over the years we’ve had some fun together – killin some ‘bars,’ drinkin moonshine – some even in these chambers. (Whiskey that is – the ‘bars’ I’ve seen once or twice, but only when I was plum drunk). But the time for funnin is over. They’ll be no jokes from David Crockett today.” Davy Crockett Speech to Congress, 1830 I must admit to having a bit of the same sentiment as Davy Crockett. With wild market gyrations that would make Elvis blush, a dysfunctional government that has tarnished America’s reputation (not to mention our credit rating!), a global debt crisis that makes Mike Tyson’s balance sheet look good, hurricane Irene bearing down on the NC coast, and, as of yesterday, an earthquake in Virginia - for cryin out loud – that made my chair shake while I was putting this communication together, the time for funnin is indeed over and they’ll be no jokes from Scott Thomas today. World…and local…turmoil aside, how do we maintain our focus and dedication towards reaching our financial goals? This is a very good question when the tectonic plates of the financial world are constantly shifting underneath us. Combine that with constant and high velocity information and we can see how solid planning can get short-circuited. I believe seven keys are:
- Matching savings/investments with your investment time horizon and making sure emergency liquidity is a consistent part of your plan. Having appropriate liquidity will help control the emotional urge to sell when markets get squirrely. Get a mental picture of a squirrel in the road facing down a car. They dart back and forth until…SPLAT!!! Hold your course.
- Maintaining diversity of asset classes so you have certain investments that may be going up while others may be falling. A diverse allocation can help cushion the shocks of a choppy market and help you stay on course.
- If you do not have a pension arrangement with a guaranteed payout, use part of your assets to create a future income plan.
- Periodically, ask these three basic questions with your advisor: (1) Has my risk tolerance changed since my last assessment? (2) Has my time horizon changed? and (3) Has my investment philosophy changed?
- Compare your investments against appropriate benchmarks so you have a better view of how your managers are doing given the circumstances.
- Wealth accumulation and wealth preservation require a different set of rules. Work with your financial advisor to tailor your situation for your particular life stage.
- Call us. We are grateful for your trust and confidence and want to help you pursue your goals. If you are our client, your questions and concerns deserve to be and will be addressed.
Lastly, I’m attaching two pieces of information for your review. The first attachment contains an interesting message from Calamos titled, “Perspectives on Recent Volatility.” The second attachment is one you should have received from me earlier in the year, “Key Financial Data for 2011.” Don’t let life’s daily distractions keep you from staying up to date on important elements of your planning. This little tool can help you save money by understanding tax brackets, deductibility of certain expenses, limits on retirement plan contributions among other things. Enjoy and please do not hesitate to call my office for assistance, advice or just to find out where I came up with the Davy Crockett quote. We appreciate you! Calamos Perspectives on Recent Volatility 2011 Key Financial Data The views are those of Scott M. Thomas and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Past performance does not guarantee future results.
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