Does Your Retirement Track Really Matter?

What Are Your Retirement Expectations?
In the story of Alice in Wonderland, Alice arrives at a fork in the road and wonders aloud which road to take. The smiling Cheshire Cat appears and asks her what her destination is, to which she replies, “I don’t know.” The toothy cat then proffers the only possible response, “Well, then it doesn’t matter.”

While it’s not the type of exchange that might actually occur in our lives, it should be, especially as we consider our financial future. For many people who have yet to clearly define their financial destination, it probably doesn’t matter which track they chose, if they chose a path at all. That may be one way to explain why many Americans are not on track to meeting their retirement goals or, worse, why most couldn’t tell you where they stand today in relation to their goals.

When You Don’t Know Where You Are Headed…
This not knowing may also explain why so many investors focus on the latest mutual fund returns or finding the next hot fund, ignoring the risk/ return profile instead of looking inward at their own financial goals. It might also be the reason why investors follow the herd and flee the market after it crashes or buy into it only after it has recovered–investment traps too many investors fall into, even though it has been academically verified that such behavior invariably leads to losses or poor portfolio performance. Because they have no destination, nor any path that will get them there, these investors are easily enamored by subtly biased and dishonest sales presentations and disingenuous education seminars and classroom pitches.

If your investment expectations reside in the current performance of the markets, and/or as a result of nefarious sales pitches, and/or media biased speakers and articles, then it probably means you have yet to clearly define your long-term financial objectives, because what happens today, tomorrow, or next year in the markets will have little if any bearing on your long-term objectives.

And the only performance measurement that matters is personal…
If your investment or portfolio expectations are based purely on the ability to get you to your specific destination, it means you either have or are ready for a solid investment strategy. The only way to measure the outcomes of your investment decisions is to compare them to your specific objectives, not by comparing them to market indices or to some incompatible indices. Your objectives and goals should not be susceptible to alteration based upon slick sales pitches from disingenuous, selfishly motivated brokers and planners. Only through an honest personalized planning process will you be able to choose the path that will get you to your destination through time. So, as a matter of course, it would be advisable to proceed through a comprehensive process that includes:

• Reviewing your financial situation and goals without dishonest sales pitch influence
• Clearly defining your short-term and long-term investment objectives
• Applying a strategic investment approach customized to your investment profile with experienced professional unbiased guidance
• Monitoring and rebalancing your strategically designed portfolio
• Reassessing and adjusting your goals and objectives annually

From there, you can expect your portfolio performance to keep you on track to your desired destination without assuming any more risk than is necessary. And with unbiased Fiduciary-Standard-based planning and investment coaching, you can choose patience and discipline over hot stock tips, the top mutual fund de jour, and biased self-serving sales pitches because you know what actually leads to long-term investment success. So, then, it does really matter after all! You will never arrive at your destination unless you know where you are going and how and when you want to get there.