Successful Investing Requires a Long-Term Perspective

Rick Irwin |

The investing process is perhaps one of the most fear-inducing, frustrating, thrilling and sometimes seemingly complex activities we as humans can engage in. Just as the marathon runner doesn't quit at the first hill they come across, or the 10th, we need to remain focused on the long term, especially in a world of 24/7 media coverage where financial predictions are a dime a dozen.

It's important to consider that the human brain is hard-wired to fear short-term pain or loss more than to anticipate long-term reward. This same short-term focus can often lead investors to gravitate towards seeking to replicate the recent dramatic gains of others in anticipation of similar easy profits rather than adopting the patience of a long-term focus on fundamentals. Being fearful when you should see opportunity and being overly opportunistic when you should be cautious; we can sometimes be our own worst enemies when investing. While investment returns are not guaranteed, the actual path to investment success needn't be that difficult. The key is to adhere to the simple principles of having a proper plan in place in the first place, aligning your investments inside of a risk framework that will help you reach your goals while allowing you to sleep well at night and not being distracted by short term "noise."

Financial advisors generally do a good job advising clients to stay the course during periods of market uncertainty. We can also help you take an even longer-term perspective: focusing on the role your retirement savings will have later in enriching your lives or those of your family or the broader community.