Dec 23 2008
written by Kyle Allen, financial advisor at Paragon Wealth Management
photo by spakattacks
What does the word “change” really mean?
In my opinion change is almost always a good thing.
We grow and become stronger when we experience changes whether they are good or bad.
Good changes are welcomed. For example, getting a better paying job with benefits or losing weight.
Bad changes aren’t always welcomed. They can blindside us and take us in directions we don’t want to go.
This is when we need to stop and take a look at the big picture.
Take the stock market for example. It changes regularly for both good and bad. We have experienced the ups and downs before and realize in the long-run things will work out even when it gets as bad as it has the past few months. That is hard to see if you are only looking in the short-term.
Similar to the stock market, football has both good and bad changes. I am a big football fan. This year’s Heisman Trophy race was very interesting. The three finanalists were all well qualified, and it was a close race. When they announced the winner of the coveted trophy, some interesting things happened.
Tim Tebow, the Florida Gators’ quarterback, received the most first place votes. Yet, he still finished 3rd in the overall race. How could that be possible?
If you look at the race you’ll understand that the winner was well qualified, but Gator fans didn’t understand.
The same comparison could be made for the Texas Longhorns. They were left out of the national championship game. Longhorn fans had a hard time understanding this “change” in their plans.
We are all like the Gator and Longhorn fans when it comes to the stock market. We want so badly for things to go our way. When the market does well we cheer and think everything is great, but when something bad happens, our cheering stops, and we want to leave.
This is when we as football fans or investors must look to the future.
A big win for Texas in their bowl game can help their recruiting season and set them up for the future. Gator fans and Tim Tebow can focus on the future, which is winning the national championship in January. Both teams are only helping themselves by looking forward instead of backward.
Whenever we have change in our lives, we must look forward. By keeping our plans in focus we eliminate some of the emotional decisions that lead us even further in the direction we don’t want to go.
Like these football teams, we as investors also have some great opportunities ahead of us in the stock market.
While you might be a little anxious about new changes in the market, you can be optimistic in believing the next big changes will be full of opportunity by focusing on what we can do to position ourselves for the future.