This Wall Street Journal article does a good job articulating how many serious financial planners (those who go deep in planning) feel about investing: Your investments usually fund all the fun things you want from life, including retirement. So, managing a portfolio and investment behavior is a serious business. However, as financial advisors, getting to that ideal portfolio is generally a routine part of our responsibilities. As the article references, designing an asset allocation can be boring work.
There are a few items the article omitted:
When I think 'boring' in this context, I'm referring to the importance of maintaining the status quo with your portfolio. Status Quo includes essential tasks like rebalancing, tax-loss harvesting, and refining your asset allocation strategy on an annual basis. However, the key to being able to be 'boring' is starting with an asset allocation strategy that is appropriate for your circumstances.
Most prospects I meet for the first time do not have appropriate investment holdings. They might have too much X and need more of Y, and they should consider adding Z. The base investment allocation needs to be fixed before someone can qualify as boring.
Being a 'boring' investor also means exercising self-control and refraining from making drastic changes to your portfolio in response to market fluctuations. Whether it's a sudden market surge, a significant stock market drop, a change in interest rates, or the emergence of a new crisis, the key is to stay the course. If you find yourself frequently adjusting your investments to chase trends or avoid potential losses, you may not yet qualify as a 'boring' investor.
I agree with the writer that being a boring investor can be a very smart investment strategy. While it is OK to be afraid of the news and the markets, it is not OK to act on fear alone.
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