How is Goals Based Investing Like a Day at the Beach?

You may be surprised to learn that successful goals-based investing can be a lot like spending a day at the beach.

When you go to the beach, you expect mostly blue skies and sunny weather. You also know that if you spend a full day there, threatening clouds can form quickly. And before you know it, the warmth of the sun’s rays is replaced by the chill of a cool breeze.

But visit the beach frequently enough, and you’ll notice a pattern: dark clouds appearing suddenly on the horizon have a way of dissipating just as quickly — and usually without dropping any rain. If any rain does fall, it tends to be just a short shower. A few sprinkles before the sun shines brightly again.

Experienced beachgoers know that what can look like a storm about to bring their good time to an end often ends up being nothing more than a brief interlude before the sun returns. They know that if they were to pack their stuff up and head home at the first dark cloud, they’d miss out on a great day at the beach. Not wanting to ruin their fun, they tend to stick around to enjoy the good weather that typically follows.

Investing for your goals means staying on the beach.

Investing for your goals can be a lot like a day at the beach. If you scatter at the first sign of potential trouble — by suddenly selling out of stocks and loading up on cash, for example, or by deviating from your financial plan in other significant ways — you run the risk of being “off the beach” (out of the market) when those “grey clouds” (short-term issues) clear out and the “sun” (positive returns) suddenly reappears.

Indeed, it may not be in your best interest to pack up at the first sign of trouble — because that trouble may not last as long as you think, or do as much damage as you imagine. By staying invested and sticking with your plan, we believe you put yourself in an optimal position to pursue your goals whatever stage of life, or the investment journey, you’re in.

Goals-based investing also means being prepared .

But let’s not kid ourselves. Sometimes the dark clouds settle in and bring rain—lots of it. This year, that was COVID-19, a largely unpredictable black cloud that unleashed a torrent on everyone. That brings us to another important lesson for beachgoers and goals-based investors alike: Be prepared.

If a heavy thunderstorm shows up, be ready so you don’t have to abandon your plans altogether. Acknowledge ahead of time that a storm could interrupt your beach day. Then show up with the tools you need to weather that storm. Maybe it’s your biggest and best beach umbrella. Or maybe it’s your sturdiest pop-up tent, so you can stay dry and comfortable when the rain begins to fall instead of scurrying around in a panic.

Don’t put your financial goals at risk.

Likewise, as a goals-based investor, we believe it is a good idea to have strategies at the ready that can help you protect your wealth from those occasional, yet severe, losses that can derail your progress and put your financial goals in jeopardy.

The key? Preparation. Be ready before the storm comes — not after you’re already soaking wet. Because having the right tools at the right time can make all the difference in your investment journey, as you pursue your most important life and legacy goals.

Want to know how to mitigate your risk when investing for your goals? Talk to your advisor about strategies to help you better preserve your wealth before the next storm suddenly and unexpectedly appears on the horizon.

This information is for educational use only and should not be considered financial advice. Forward looking statements cannot be guaranteed. The opinions expressed are those of Horizon Investments and are subject to change without notice. All investing involves risk, and no investment is guaranteed. Clients may lose money. Horizon Investments and the Horizon H are registered trademarks of Horizon Investments, LLC.

© 2020 Horizon Investments, LLC is an investment advisor registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Horizon’s investment advisory services can be found in its Form ADV Part 2, which is available upon request. HIM082020


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