Two Hands on the WheelSubmitted by Bond & Devick Wealth Partners on August 28th, 2020
Two Hands on the Wheel
RJ Devick noticed when his youngest daughter, Aster, started to drive she would always slow the car down and move to the right when she approached an oncoming vehicle. This made sense to her because what if the vehicle crossed the center line and hit her? The longer she drove and the more experience she gained she tended to slow down less frequently and stopped drifting to the right. After more than 100 hours of driving she gained confidence that the oncoming vehicle would most likely stay in their lane and did not pose as large a threat as she thought when she first started driving.
Investing in the stock market is a lot like learning to drive. Everything is really scary at first, every news report, hurricane, and election could cause severe damage to your portfolio and newer investors often make more changes to their portfolio than those who have been investing for a long time.
It is true that sometimes a car does cross the center line and could create an accident, as a driver you always need to be alert and ready to steer clear from danger. The same is true with investing, we cannot put our portfolios on autopilot and always hope for the best. At Bond&Devick we design portfolios based on our client’s goals, objectives, and risk tolerance and then make adjustments from time to time, trying to avoid a serious accident. Most often, we do this through rebalancing portfolios or replacing investments that are not performing as we had hoped. Like every good driver, we focus on the road well ahead of the car and not at the tip of the hood.
We don’t always make the right adjustment or have the perfect timing, but our experience shows that the most important decision is to get the right amount of risk and potential return for each portfolio and not make frequent changes based on current headlines and news flow.
We hope you enjoy your Labor Day Weekend.
Take care and be safe,
The Bond&Devick Team