Something Awful is Going to Happen

My all time favorite comedian is Robin Williams. In the years during and after the Iraq War under President Bush and Secretary Donald Rumsfeld, Robin said something really special while impersonating Donald Rumsfeld. The setup was a press conference with the Secretary of Defense, Mr. Rumsfeld. Robin, funneling Secretary Rumsfeld’s persona, said, about the current state of terrorism fears, “I don’t know where, I don’t know when, but something awful is going to happen — no more questions.” Exit stage left.

This weekend I returned from a seven day beach vacation to Emerald Isle, NC. This particular stretch of island is an extremely quiet beach. Your next beach blanket neighbor can be found at least twenty to thirty yards away, and no one, and I mean no one, does anything to disturb the other. After a day or two you begin to reflect on the reality of the week. It’s quiet, peaceful and serene. For a week, I disconnected from the world outside the island. It allowed me some time to validate a key tenant of my clients financial plans — patience and optimism.

On my return home, I dared to turn on CNBC, Bloomberg News and Fox Business Network. I had a quiet bet with myself how long it would take some talking head to suggest that an impending market correction, or even a recession, is afoot. It took less than fifteen minutes sans the commercials. Of course, this person would never suggest how the correction would play out, because he can’t. In the word’s of the impersonated Donald Rumsfeld, “I don’t know when, I don’t know where, but something awful is going to happen. No more questions.”

The wonderful thing about the truth is that it cleanses, it purifies, and it brings light to the reality of the issue at hand. For the goal-focused, long term financial planning focused-first investor, the truth is refreshing. I sit here today to tell the you the truth. One day something awful is going to happen. Your goal-focused, long term financial plan will be put to the test for a period of time Then something awful will happen again after another period of undetermined time. That “something awful” will usually come in some form that has already happened in the past, just wrapped in a different cloth. A financial crises will happen. Some fraudulent, usually financial, malfeasance will occur in some area of the markets leading to a correction of trust. A violent and tragic event will arise. Some over indulgence in some area of the economy will take place. These are just to name a few. Feel free to insert your own apocalypse de jour here; because, I assure you, the media will always find a way on a daily basis to come up with something to strike fear on your soul and cast doubt on the very existence of every plan you have laid out for yourself.

When the “awful” occurs, the goal-focused long term financial plan is challenged and tested. But a test usually means we are drawing a line to stop time. But in the world of events, time is never linear. Our choice is to decide where we are going to focus our intellectual and, it’s cousin, our emotional energy. My choice, and I suggest it should be your choice, is to focus my energy on the only reality that squares with the long curve of human history — optimism. Without optimism your focus moves to a dangerous place. Inevitably, your financial outcome will likely be not what you planned because you chose to focus on the thing that you could never control — short term pessimism. Reacting to short term pessimism is a sure way to lose control over your financial affairs and make poor short term decisions that exponentially affect your long term result. The variability of your returns, your result, will largely be determined by your focus.

Optimism is hard work and takes patience. Be patient and stay optimistic. Your financial plan will thank you for your focus.