Memorial Day has passed; school is wrapping up; and like it or not, we are all headed into swimsuit season! If the weather and the calendar didn’t tip you off, advertisements and articles across television and the web surely clued you in.

This happens every year, right? You’re carrying a little extra around the middle from less activity in the winter, and your skin doesn’t quite have the glow it does during the summer. So, what does every magazine and advertisement tell us? Change now! And what do many people get suckered into doing? Trying to change immediately. Every year, articles and advertisements focus on short-term answers that tug our emotions, make people uncomfortable, and can create more harm than good in the long term.

Why do people fall for this? We all know that the proper answer to being healthy is exercising regularly; eating proper portions of carbs, protein and fats; staying away from processed foods; and getting proper rest. Do this year after year, decade after decade, and you will have long lasting health. Instead, we compare ourselves to this year’s updated article titled, “How 10 celebrities have gotten ready for the beach!” and we jump on something like the South Beach diet, Vegan diet , all protein, no protein, 3 day cleanse, Dr. Oz’s Ultimate Diet, Flat Belly diet, and on and on for a few months. (Are you now thinking “tried that!”?)

We compare ourselves to an unrealistic or unimportant standard. I would suggest this happens financially too. Instead of keeping our sites on long term personal objectives, we get told to set our attention on the point level of the Dow Jones Index. It’s like setting our attention on what this year’s top celebrity looks like in one month of their life.

This short-term, abrupt-change, jump-between-strategies approach to investing does great damage to people’s financial health. The media and market pundits who spout these ideas have a job to do: to have eyes and ears return to their show, page, or site – not to help you achieve long-term health.

Yes, the US economy has had sluggish growth. Yes, Europe is in a recession. Yes, emerging markets have turned down. Yes, when our rock-bottom interest rates rise, bond prices are likely to go negative for a period of time. And yes, there is serious question about government spending, Federal Reserve activities, and the impact it will have on the future.

But you are not investing for the summer or the end of the year. You are investing for years and decades. You are investing for your long-lasting financial health, not as an answer to a possibly valid, but isolated point made in an article somewhere.

Will the stock market go negative for some period of time, possibly this summer? It’s likely. But remember…it moves down every year. See this as an opportunity for buying at lower prices, not as a threat.

Will interest rates rise at some point in time? Yes. Instead of viewing it as a loss of value, see it as an opportunity to increase the income you get from your investments. We like more income, right? And ask the questions, “which rates?” and “how much?”

Don’t go on a 3 day cleanse; and when a jobs report is all over the news, ask yourself what this has to do with your financial goals two decades out.

Don’t buy a book on the flat belly diet; and when you are told the Dow Jones Index has reached a high point level, ask yourself what a single market measurement of 30 U.S. companies has to do with your goals 10 years from now.

When I suggest you eat well and live well I am telling you to pay attention to things. Financially, I am not telling you to ignore the markets and economy; I am suggesting you put it in its proper place.

So get some exercise, eat well balanced meals, avoid junk food, and take some time to relax. While you are at it, have cash available for needs in the next year or two and maintain an appropriate mix of fixed income and equity assets for YOUR goals and wealth over the long term.

Now that looks good at the pool!

Author: David Jeter, CFP®, Allegheny Financial Group, June 2013


Securities offered through Allegheny Investments, LTD, a registered broker/dealer. Member FINRA/SIPC.
The above comments are provided for discussion purposes only and are not meant to be an offer of any specific investment.