One of the most anticipated segments on the local news (and among the most viewed on the internet) is the weather report. Sometimes this follows the stock report for the day. Most of the time, with our attention so narrowly focused on short term fluctuations, we miss the long term story. We can't work on protecting and enjoying wealth if we are primarily concerned with day to day price changes.

Several business TV channels have a stock market ticker running along the bottom of the screen all day. It seems some investors don't feel sufficiently informed unless they know minute to minute price movements. Sure, watching this is harmless unless it causes you to re-think long- term plans. Since we are all emotional beings this temptation can become a real hindrance to financial independence. I would go so far as to say it may be the largest potential stumbling block along the path.

Okay you say, I get it. Don't become a slave to the market noise any more than you are to changing weather conditions. You can't change the weather any more than you can change the financial markets in a given day, so what are you to do? Be prepared, in both cases for other possibilities. In investment terms this translates into long term, well diversified positions that respond differently to the underlying economic conditions. With both the weather and our financial lives we need to anticipate and expect the unexpected.

While both the weather and stock market may be unpredictable in the short term, we have a pretty good idea of how they both behave over the long run.  The chart below (click on each chart for full screen view) shows short term versus long term weather patterns (monthly versus annual average temperatures). 

source: www.sercc.com

Now compare that to short and long term stock market patterns: 

source: DFA returns program - S&P 500 data

In both, we see short term fluctuation and long term consistency. Our trademarked wealth management process provides the necessary insight and clarity so that smart long term financial decisions can be made. A thorough client understanding combined with expertise and experience creates our uniqueness. We look forward to working with you, your friends and colleagues in the upcoming year.