The Tree
2021 has been a very nice year so far in the markets overall. And this could continue for a while. But if you have been around long enough, you know eventually investors will be asked to endure a temporary (but miserable) down cycle. It is the price of admission. When that time comes, think about these great insights from Nick Murray.
When asked “how often should an investor check on the value of their portfolio?” the venerable and eloquent advisor Nick Murray replied…….
“The failure rate for investors increases exponentially every single time they check their portfolio value. In a perfect world, investors would only be able to check their account value every 1 – 2 years….for their own benefit. Why would you carefully build a portfolio designed to support the next many decades of your life, and then check on its value every week?
It’s like a tree. You plant it, and the wonderful forces of nature enable it to grow over time. You don’t dig it up every week to check on its progress. You only harm the tree by doing that. You don’t uproot the tree and store it in your garage over the winter, to protect it from what you regard as ‘bad weather’. Though its leaves fall and it stops growing for a season, the tree itself does not die. And even leafless, it still produces oxygen, without which you could not live. Give the tree enough room, enough light, and enough time. Then leave it pretty much alone. It will give you back air and shade and beauty as it grows – and will go on doing so for your children after you’re gone.”
Hard to express it better than that.
