At my core, I am a financial planner. Some may call me a money manager, or an investment advisor or a wealth manager….all terms that could apply, depending on your definition. But, I see myself as a financial planner. When I meet with someone for the first time, more times than not, they are looking for someone to manage their money – or at least that is what they think they are looking for. But what they really need is someone to help them develop and implement a financial plan. Now some of these plans are more complicated and have more nuances than others, but a plan is a necessity. And the reason for that should now be extremely clear; with a well-thought-out plan, one that is designed to provide the greatest likelihood that we will be able to attain our goals – both short and long-term, we are as prepared as we can be to weather the heightened and significant volatility we have been experiencing.
It is human nature to want answers and certainty. But the reality is that nothing is ever certain. When life is going well, when investment portfolios are up, when prospects are exciting, we feel good and in control and at ease. But the reality is, that all of that could change in a heartbeat because so much of what happens in life is out of our control. When things are more challenging and frightening, as they are now, we feel like we have lost this certainty in our lives, but we have not – you see, we never really had it. We just felt like we did. And that is why we plan – we plan for the unknown.
And while a financial plan does not provide any more or less certainty, it considers a wide range of outcomes. It incorporates the fact that in some years, our investments will decline in value. It incorporates our cash needs and ensures that we will have adequate liquidity to get through the tough times. It provides a framework that was established when we had the benefit of foresight and the perspective that is so hard to hold on to when we are in the midst of a downturn or even a big run-up in the market.
A financial plan is about you – what is important to you, how you want to spend your time, what you want your legacy to be – not about the size of your investment portfolio. An investment portfolio is a component of an integrated plan that has a much larger purpose; enabling each of us to concentrate on those things that matter most. If we have a plan, it will be relevant through all market conditions – we just need to stick to it and remember its purpose.
And so for all of us who have a well thought out financial plan in place, during these volatile times, we can feel grateful, not scared. We can feel prepared, not overwhelmed. We can rest assured that we are controlling all that we can and that we are well-positioned to not only weather this storm but to come out stronger when it is all over. We can know that our actions are the result of objective analysis and are continuing to increase the likelihood that our long and short-term goals will be realized, even as we are watching our portfolios decline in value over the short-term. We can feel confident about our future.
