Good morning & happy Monday!
Two quotes today … one for the pessimist, one for the optimist 😊
“Expectation is the root of all heartache.”
– William Shakespeare
“Trade your expectations for appreciation and your whole world changes in an instant.”
– Tony Robbins
As we are in the middle of the holiday season, I am reminded of a story from over a decade ago. My wife took me Black Friday shopping (I would define it as dragged me, she called it an opportunity, so we’ll settle on “took me”😉).
This is back before the internet took over holiday shopping, so we had the “opportunity” to go shopping well before the sun came up the day after Thanksgiving. She had a whole strategy lined up … I think she was more prepared with a game plan than NFL teams were.
We would go into a store, and she would send me directly into the huge line where I would stand and she would shop. She had specific items she was seeking at a specific price. As I approached the register she would join me in the line, hand me a few items and a coupon and tell me to check out separately from her.
Somehow, I could purchase $100 worth of stuff for like $7. I learned on this day to not ask questions, it was very clear she was a master at this game and she was most certainly in game-mode. 😊
Well, at the end of an excruciating (she would call it exhilarating, but I’m the one telling the story, so I’m sticking with excruciating 😉) day we had finished the list. Every person on our list had gifts purchased so we both felt like the day was a success.
We sat down for a late lunch after about 7-8 hours of shopping and I stated something along the lines of, “That was brutal, but at least we are completely done with our Christmas shopping and now we can just enjoy the rest of the season.”
Her response was, “We’re not DONE Christmas shopping; we’re just done for the day.”
Me: “Do we have more people to buy for?”
Wife: “No.”
Me: “Do we have more gifts we need to purchase?”
Wife: “No.”
Me: “Then how in the heck are we not done?”
Wife: “I don’t want to be done. That was never the goal for today.”
To quote Adam Sandler from the movie The Wedding Singer, “that is information that would have been useful to me YESTERDAY!”
See we both walked into that Black Friday shopping expedition with different expectations. She expected to get some great deals, make a major dent in the Christmas shopping list, but never intended on being done with her holiday shopping. Me, I entered this with the sole expectation of knocking out the entire list and being done. Why else would I wake up at 2:30 in the morning after basically being in a food coma from a huge Thanksgiving meal?!?!?
Needless to say, she has never invited me back to Black Friday shopping and I most certainly have never volunteered. 😉
What type of expectations do we enter when we invest?
Do we think investing is always going to be smooth sailing?
Do we expect company valuations to stay fairly consistent?
Are we under the impression that market movements are predictable?
Entering into investing with these expectations will lead to a very frustrating investment journey.
I think this is an important time to reinforce this truth after a solid double-digit growth year in 2023 and on track for another strong double-digit growth year in 2024.
While it’s enjoyable when the market is going up-up-up, it’s not always the case. There will be down days, weeks, months, and years.
We as investors must keep this in mind and must make sure to manage our expectations accordingly.
Please don’t read into this as me predicting a market pullback. I don’t make predictions, that’s not the business I’m in (the financial news media is in that business, and they are horrible at it – don’t get me started on that 😉). I’m in the business of financial planning and positioning you as my client for the best possible long-term, risk-adjusted results possible.
If 2025 turns out to be a great year for the market, that’s wonderful! If it turns out to be a bad year, it’s not the end of the world.
One of my primary jobs is to help my precious clients maintain a healthy perspective on investing, at the core of that is managing expectations.
Thank you for allowing me the opportunity to provide my thoughts on this topic this morning.
As we approach year-end, please do not hesitate to reach out if there is anything we can do to support you.
Make it a great week ahead.