Investor Resolutions - 1/26/13

In this week's edition:  What will 2013 bring to you? Is this email not displaying correctly? View it in your browser.

Investor Resolutions 2013 Of new year resolutions GK Chesterton once wrote: "Unless a person replaces his senses and backbone, he will certainly do nothing effective."  I'm going to quit smoking, lose weight, or save more, are merely statements reflecting on changes we've already thought about.  Until we start perceiving them differently, as something threatening to the core of who we want to be, changing is unlikely. Nature abhors a vacuum.   If we stop doing something we have to replace it by doing something else we perceive vital…or we'll usually just keep doing the same thing. Consider this statement:  If I don't stop doing this and start doing that I'm going to waste my life and probably die before it's necessary.   Not quite the same as a typical resolution, but now we're onto something vital. So, here are a few investor resolutions and behavior replacement options to kick off the new year.  Not all of them are financial per se; but each will contribute to the three most important "Cs" -  clarity, confidence and comfort. 1.      I WILL IGNORE FINANCIAL MEDIA AND ITS PREDICTIONS The fastest way to prove ourselves wrong is to make a precise prediction about what is going to happen.  Every situation comes with an endless supply of possible outcomes.  Picking one and being right is akin to winning the lottery.  Of this, media experts are not immune. Most pundits reasonably predicted a double dip recession and falling market in 2012 amidst the Euro Zone catastrophe and uncertain election year.  Neither occurred, in fact it was a stellar year for global stocks - up 17% on average.  Oops.   Prudent investors already have a long term allocation in place and understand it has purpose throughout the ups and downs.  That means it is not to be trifled with in light of the worries of the day. So instead of pontificating about which prediction is right and what you need to do now, read about something you love, spend time with your family, or engage in resolution # 7. 2.      I WILL NOT CHANGE MY PORTFOLIO UNTIL AFTER A ONE-WEEK COOLING OFF PERIOD. Things that are urgent are rarely important, and things that are important are rarely urgent.  Making a change in your retirement portfolio is ALWAYS important.  Don't do so at the height of your emotions, i.e., when your gut is screaming at you to do it right now. Instead, do something else that helps you release tension.  Talk to your advisor, go to the gun range, smash golf balls as far as you can without worrying about where they go, or ask your love out on a special date.  Chances are you won't regret not doing that thing with your money that seemed so urgent. 3.      I WILL TAKE A LONG WALK (at least once a week with my phone off). Not to get all "THOREAU" on you, but walking is good for the heart and soul.  It allows us to unplug from the ubiquitous man made distractions and reconnect with the things nature deems important.   And you shouldn't argue with Mother Nature. Instead of watching that show you really don't care about or reading that thing that will be obsolete tomorrow, go for a walk.  And if you're fortunate enough to have someone around you like, ask that person to go with. 4.      I WILL GIVE MY SHREDDER A BREAK AND GO PAPERLESS Old habits die hard, but the amount of paper we receive is unnecessary, burdensome and wasteful.  Almost every vendor and service provider wants you to request email statements - some even incentivize the change.  And if you're not interested in the junk mail you receive, take yourself off the direct mail list (similar to the do not call list).  For more information on how to do this, visit this link. 5.    I WILL REVIEW INSURANCE COVERAGES Risk management extends beyond investing. The beginning of the year is a good time to take inventory of your insurance coverage, including making sure beneficiaries are correctly listed.  If you are not sure what you are looking for or how to do this, ask your advisor to help.  If you haven't already done so, look into Long Term Care Insurance with your advisor as well.  A long term care event can drain your retirement funds by far more than the cost you will pay for coverage.  And one of the worst things that can happen is to get well after a long recovery period only to find you are then broke.    6.      EAT HEALTHIER This is one of the toughest resolutions to keep as it seems far easier to not do so. You don't need me to tell you the reasons why, but I'll add eating healthy requires the discipline to manage desired immediate gratification and laziness - which comes in handy in lots of areas outside of eating. Instead of driving through the land of double bacon cheeseburgers…walk into a grocery with a salad bar.  For a few extra minutes you get in a walk, wind up with a variety of tasty foods, and save yourself half the calories for about the same price as Combo #2.   If you're into technology there are APPS that can help.  One I like is called "LOSE IT."  For more information click this link: The Eight Best Smart Phone APPS. 7.  LEARN A NEW HOBBY OR SKILL Neuroscience has shown for years exercising our brains as we age is just as important as our bodies for stress reduction and longevity.  One of the best ways to do this is to experience new things.  Take a class, join a focus group, or pick up a new hobby.  As Helen Keller said, "Life is a grand adventure…or it is nothing at all." We wish you a prosperous, peaceful and blessed grand adventure in 2013! As always, I welcome your questions and comments.   Marc Becker, AIF Managing Partner, Wiser Financial Coaching Columnist, The Advisor Sherpa  becker@wiserfinancial.com To read past articles and view past videos, visit: www.marcbecker.tv * Source: CapitalSpectator.com, returns represent 1/1/2012 through 12/31/2012