My husband and I are planning a trip to celebrate our 30th anniversary this summer. We love to travel, and we are fortunate to have taken some wonderful trips over the years. But, when it comes to planning a new trip, I have a weakness: I want it all. You see, there are many places still on my list to visit, and yet there are others we have visited and enjoyed so much, we want to return. It can take weeks for us to pull the trigger and settle on an option. I want it all and I want it right now.
So, it was with great amusement when I read the most recent blog post by the NY Times “Sketch Guy,” Carl Richards http://www.nytimes.com/2014/01/21/your-money/the-trap-of-too-many-choices.html?ref=your-money. You see, having few options is bad, but having too many options can be debilitating.
In the world of financial planning, we most often see this debilitation when people try to time the market. When the market is up, people want to wait for a correction. When it is down, they think it hasn’t gone down enough. Just when they think it is safe to go back in the water, they have missed the biggest part of the upswing. The cycle continues.
This is why the right asset allocation and portfolio diversification play such an important role in your financial success. It may not be exciting and you may not beat the Russell 3000 year after year, or ever. But you are participating in the markets, you have the cushion that fixed income provides and sufficient cash for emergencies to ride out just about any storm. And if you stick with your plan, over the long term, you will be a winner. You definitely won’t get there by sitting on the sidelines.
We all want to make the best decision, invest at the best time, pay the perfect price, plan the perfect trip, etc. But all of the research in the world won’t guarantee success 100% of the time. In fact, waiting for the best often causes us to do nothing.
Richards’ suggestion is to accept that sometimes good enough is better than not at all. And I would have to agree. For now, we have settled on our travel plans. And with any luck, there will be another trip next year.
Tracy H. Allen, CFP®