Despite having learned the lesson repeatedly, the temptation to scramble is still relentless. Be it a spectacular Rocky Mountain, or a thickly forested valley, the way through it has usually already been cleared and marked, perhaps by a deer at first, maybe later by a two-legged trailblazer with a good saw.
In a society where we celebrate the achievements of those who take the road less travelled, it is counterintuitive for us to stay the course.
On a family hike this past spring this concept was illustrated beautifully. My wife and I, along with our younger children, stayed on the main path and made it to our destination after slugging it out in the trenches of switchbacks and dusty ups and downs.
There were several times along the way where there appeared to be potential short-cuts, but steep sections of loose rock make for a lot of wasted effort, and we decided to just stick to the well-known path.
About 30 minutes after arriving at the top, after we had snacked, rested and puzzled over their absence, a few of our older children and their friends climbed straight over some rocks to meet us at the site. They were completely hammered by the unforgiving climb.
From down below they could see the destination, and just wanted to use their superior strength to take a straight line get there. "That was really stupid," my eldest daughter complained, "I'll never do that again."
Gut check
When markets get riled, and let's be clear, they always eventually do, it is a gut-check for all of us - a test of the level of conviction we have in our long-term plan.
The temptation is to focus on the peak we just left, and scramble off the program we had previously adhered to.
A key take-away here is that a riled market is in fact a crowd decision, and holding your course on your path will in fact become the road less travelled.
On the other hand, these gut checks can also be a good test of your chosen long-term plan. Even if it only comes every few years, is this the sort of stress you can abide? If not, you may wish to reconsider your long term plan, but choosing when to make such a wholesale change of plans is a very personal decision, best done in consultation with others, including professionals, but also those who watch you wrestle to get a good night's sleep.
And to be clear, it is perfectly normal to take smoother trails as we age.
Adding to the confusion, some get lucky, accurately guessing the timing of a market crashes or blooms. You will likely hear about it if they do. The results can be spectacular and brag-worthy. The math is simple; if someone made a spectacular return, most people didn't. And for those who swing and miss, it is usually in a quiet place where they express their regret.
For the rest of us, the proven strategy time and again has historically been to find the level of risk we are comfortable with and stick with it for the term that is practical for us. Diversify your strategies among several ideas, and try to not be too happy with yourself on the good days and not be too aggravated on the bad ones.
The long-term strategy has proven successful over time.
All opinions and estimates constitute the writer's judgment as of the date of this report, and are provided in good faith but without legal responsibility. Market conditions and other investment factors are subject to change, and past performance may not be repeated.
Mark Ryan is an advisor in
Prince George with RBC wealth management, dominion securities (member CIPF) and can be reached at [email protected].
