When investing for retirement, success is most likely when you give much less attention to the things you have no control over. For example, if you're constantly monitoring the short-term behavior of the market, with the hope of somehow anticipating what it's about to do next, you'll not only fail to outsmart it, but you'll also inhibit your ability to take action on the things can control.
Cosmo DeStafano, a retired CPA and best-selling financial author, observes that bull and bear markets are beyond our control—simply the luck of the draw. "So," he says, "it's crucial to concentrate on the factors that are in your control:
The amount of your monthly contribution and withdrawals
Setting realistic goals
Making informed investment choices, and
Adhering to a dynamic planning process."1
A falling market can be a strong temptation to abandon your plan and take short-term action. But an even stronger lure can be when you think you're somehow missing out on market-beating gains. John Pierpont Morgan, one of the greatest capitalists in American history, observed, "Nothing so undermines your financial judgment as the sight of your neighbor getting rich.”2
It's also helpful to remember that the person who brags about their short-term investing acumen will most likely be quiet when their trades result in a loss.
The prudent investor knows that his or her best chance of success will come from maintaining their focus. They will continue to do the right things even when the results aren't immediately apparent. And they will take advantage of the guidance of a trusted advisor to create a dynamic plan, allowing themselves to be held accountable to stick to it.
1. http://go.pardot.com/e/91522/ng-consider-the-entire-journey/95qzfl/2494538468/h/VfzeZ57bObfsnh8hd-s2ekjrAz6nsegl2Yci_Z8Sha8
2. http://go.pardot.com/e/91522/jp-morgan-quotes-/95qzfp/2494538468/h/VfzeZ57bObfsnh8hd-s2ekjrAz6nsegl2Yci_Z8Sha8
