“A Hare was making fun of the Tortoise one day for being slow.

‘Do you ever get anywhere?’ he asked with a mocking laugh.

‘Yes,’ replied the Tortoise, ‘and I get there sooner than you think. I’ll run you a race and prove it.’”

So the story of “The Hare and the Tortoise” begins…

We’ve all heard it. We’ve all read it (hopefully). What the heck does it have to do with investing? Well, quite a lot, I’d argue.

How did you feel during the time period of October through December last year (2018) as it relates to your investments? Confident? Opportunistic? Concerned? Scared? Fearful?

I would say for most of you, particularly those in or close to the retirement years, that the last three words better describe how you felt. And if so, I don’t blame you. When media networks exclaim that “the sky is falling” and “to take cover,” it’s hard to ignore these statements. We’re human. Our left-side logic part of the brain doesn’t usually rule in these scenarios. The right-side emotional part of the brain often rules; and if acted upon, the effects can be devastating.

If you decided to cash-in at the end of 2018, you would have most likely locked-in investment losses for the year depending on your investment allocations. The Hare certainly would have advised that you cash-in.

Fast forward to February 22, 2019. Below are year-to-date investment returns for a several indices:

S&P 500: +11.3%

Dow Jones Industrial: +11.6%

MSCI ACWI: +10.1%

MSCI EAFE: +8.6%

Not too bad of returns for just 1 ½ months of the year. Of course, we may not finish the year within these return ranges, but the point is made: Had you let fear reign in October through December of last year, you would have missed the upside we’ve received so far this year.

The Tortoise would have capitalized on these investment returns, because “slow and steady wins the race.” The Hare? Perhaps he cashed-in last December, took a nap, and is still waiting for the “right time” to invest again (i.e. buy-in when the price is much higher).

We often say to clients in our office that we sure wish investment returns were these pretty little stairsteps that only went up and never down. Unfortunately, that’s not how long-term investing works. You have to take the good years, and the not so good years. Research continually shows this type of investing to give you the highest probability of achieving your investment goals.

We are sympathetic to our clients when the market volatility occurs. We won’t shame you for feeling the way you do. We will listen. And we will revisit your financial plan that we prepared together and see where we are. This strategy brings us back to the long view. This strategy has proven to be helpful.

The story ends here: “The Tortoise meanwhile kept going slowly but steadily, and, after a time, passed the place where the Hare was sleeping. But the Hare slept on very peacefully; and when at last he did wake up, the Tortoise was near the goal. The Hare now ran his swiftest, but he could not overtake the Tortoise in time.”

As shared by a billionaire investor to my old boss Dave Ramsey: “Every time I read this story to my grandkids, the Tortoise wins the race.”

We are here to run (or walk) the race alongside you.

For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.