Written by Keith Burbank
Have you ever asked yourself this question? Countless articles and talking media heads try to answer this for us on a daily basis. We are overloaded daily with investment information from TV, websites and friends. It becomes easy to fear the worst and think we will never be able to retire or run out of money once we do. But how does anybody know the answer. The talking heads cannot answer this for us because they do not have the information they need. The question is, do you have the information you need?
Investment statements only show short-term results. What they do not tell you is how these results affect your long-term financial success. Too often people make investment decisions based on short-term information. The focus is on what the investment statements say now, and not on how these results will affect your long-term success. To make investment decisions today you need to know how those decisions will affect your future financial goals.
- The first step is identifying your future goals. Everyone has unique needs, wants and wishes. Identifying your goals is important in putting together your goals based investing plan.
- The next step is identifying all of your resources for funding these goals.
- Finally after determining your risk tolerance, we can put together an investment plan and determine how confident we are in attaining your goals. By running thousands of simulations we come up with a probability percentage of success. The higher the probability of success, the fewer changes we need to make to your plan.
Measuring your performance based on progress toward achieving your goals helps to avoid making emotionally driven changes when markets are volatile. Your investment plan is an ever evolving document and changes are made as your circumstances or goals change over time. There is no way to be certain that you will have all the answers, but with a good plan you can be confident that you have a better probability of success.