Hi. I’m Peter. I’m a functional introvert, but I generally enjoy public speaking.

But it wasn’t always this way.

You see, when I was a college freshman, I did what any reasonable person would do to get over their fear of speaking, and I signed up for a public speaking course.

What better way to get over your fear of speaking than to get up in front of 30 perfect strangers and say something, right?

Well, early on in this one particular class, I was paired up with a partner whom we’ll call Ryan.

And, as part of our first public speaking assignment, Ryan and I were tasked with learning as much about one another as possible in fifteen short minutes.

From there, it was our job to introduce each other to the rest of the class.

So how’d I do?

Well, I took careful notes, and when it was our turn to present, I walked up to the front of the class and nailed my introduction.

I felt great!

Then, it was Ryan’s turn.

But, Ryan’s presentation didn’t go as smoothly as I had anticipated.

That’s because Ryan was more nervous than I was, and the coping mechanism for his nervousness turned out to be humor.

Now, have you ever met someone who, when they get nervous, they just start cracking jokes?

Well, unfortunately for me, to ease his tension, Ryan decided to use his budding sense of humor to make the class laugh, but at my expense.

In fact, Ryan was so nervous that he didn’t even bother reading from his notecards.

The truth is that he just created a giant fictitious story about me simply to keep his schtick going.

And so, just a few days after that unfortunate event, I dropped the course and gave up on my public speaking pursuit for some time.

Now, it took me a while to get back up onto the public speaking horse after that situation.

But, had I been able to move past that one uncomfortable event…

Had I been able to look back at that one awkward circumstance and had just taken it for the learning experience that it was, I wouldn’t have wasted so much time not improving my communication skills.

Now, have you ever been right on the cusp of achieving a goal, but walked away at the last minute because of a momentary setback?

You know, Thomas Edison was known to have said that, “Many of life’s failures are people who did not realize how close they were to success when they gave up.”

There isn’t a magic pill out there that will get you from where you are today, to where you want to be in the future.

Indeed, reaching for shortcuts, whether that’s looking for the promise of a safe haven financial product or the promise of a risk-free investment home run, rarely leads to the outcome that we’re hoping for.

That’s why, when it comes to how you or I manage our wealth, it’s crucial to stay committed to a disciplined long-term strategy, no matter what’s going on in the markets.

So then, it’s essential to develop a disciplined investment strategy, understand why you’re investing in the first place, and then stick to the plan, not the panic.

Because if you don’t, you not only risk financial loss, you may also end up introducing unnecessary stress and anxiety in your life, which could ultimately set you up for financial and personal setbacks.

Why We’re Impatient Investors

Now, you likely already know that investing can often feel like riding an emotional roller coaster.

But this feeling isn’t always something we appreciate until we’re right in the middle of it.

You see, years ago, when my oldest child was nine years old, I took my family to Kennywood here in Pittsburgh.

Now, having never been to an amusement park before, naturally, the kids all wanted to ride a rollercoaster.

I’ll be frank and say that up until that point, I had never ridden on a rollercoaster before either, so I didn’t know what we were in for.

And so, we walked up to the first rollercoaster we came across, called the “Jackrabbit,” and got in line.

And as we stood in line, we watched intently as others boarded the ride.

And we shared in their excitement as the cars zoomed right past us.

Now, by this point, all of us were excited and full of anticipation as we took our turn to get into the next available roller coaster.

But as our car slowly started to pull out of the carriagehouse, and began its ascent up to the top of the first crest, our entire family quickly came to realize that the Jackrabbit was no tame rollercoaster.

Have you ever been on a ride that didn’t turn out as you had expected?

Have you ever been on a ride that you thought would be exhilarating but suddenly took a sharp and unexpected drop?

How’d you feel at that moment?

Well, maybe your heart started racing because you didn’t know what to expect.

And maybe you began to wonder why you had ever boarded the ride in the first place, right?

And even though you knew that the ride would be over in 90 seconds or less, you likely still felt like you’d made the worst mistake of your life and vowed never to ride a rollercoaster again, right?

You know, that’s how many of us feel when the markets aren’t going our way.

Frankly, we get scared.

When the markets dip, the fear of losing hard-earned money takes over.

That’s because we’re wired to avoid pain more than we’re motivated to seek pleasure.

And you know, this fear can make us desperate for safety when we’re in an uncomfortable position.

And, at the same time it can lead us to seek the quick fixes of an annuity or the lure of a high-risk investment promising steady returns.

However, this approach rarely ever works.

And why’s that?

The Financial Cost of the Quick Fix

Well, imagine that you’re building a house.

You have the blueprints, you have a clear vision of what your finished home will look like and so, you get to work.

Now, imagine that midway through your build, you decide to change the entire layout of the home because you saw a new design in a social media post or heard about a tempting new building trend from a friend.

What do you think would happen?

Well, you’d likely face delays, increased costs, and perhaps even structural issues with your finished home.

Taking this same approach to investing is likely to yield similar results.

Missing the Best Days in the Market

Indeed, when it comes to investing, sticking to your plan is crucial.

And why’s that?

Well, let’s consider the financial cost of missing the best days in the market.

Now, historically, the stock market has provided substantial long-term returns.

However, those returns can vary significantly by missing just a few sizeable days of market performance.

How so?

Well, let’s say you had invested $10,000 in 1970 in a way that it would track the S&P 500 index’s performance.

By 2020, if you had remained fully invested, your portfolio would have grown to around $1,200,000.

However, if you missed the ten best days during that 50-year period, your portfolio might have grown to around $600,000.

And so, why would this happen?

Well, that’s because the market’s best days often happen close to their worst.

More specifically, during periods of heightened market volatility, emotions are running high, and so, many investors make the mistake of pulling out of the market at the worst time, thinking they can avoid further losses.

But, this reactionary approach can lead to missing a significant rebound just days after the sharp declines.

I mean, just think about where your portfolio would be now if you completely sat out 2023 because you were disappointed by what happened in the markets in 2022.

You see, it’s nearly impossible to predict when these best days in the market will take place.

In fact, they often happen unexpectedly, which makes market timing a risky and often costly strategy.

That’s why it’s crucial, when the markets are moving against you, to stick to the plan, and not the panic.

The Cost of Peace of Mind

Now, besides losing out on potential long-term gains, panicking when you should be sticking to your plan can cost you your peace of mind over the long term.

Sure, buying that annuity now or taking advice from a discussion board on how to take a big bet on sure-thing stock could help you in the short run.

But, what do you do when the market returns to normal?

You know, panicking instead of sticking to your plan, and chasing after shortcuts is like taking a detour on a well-planned road trip.

How so?

Well, imagine for a moment that you’ve got your destination clearly mapped out, but along the way, you keep hearing about shortcuts or scenic routes that promise a better, faster, or more enjoyable experience.

So, what do you do?

Well, you might change routes because you’re excited, hoping these new paths will lead you to your destination quicker or offer you more of a picturesque experience.

But what tends to happen is that you’ll likely find yourself more lost, more stressed, and further away from where you want to be.

And this feeling is much like the emotional and psychological toll of constantly shifting your investment strategies in search of a quick fix.

Indeed, the first emotional hit you take from panicking in the markets is dealing with stress.

That’s because each time you switch strategies, you’re betting on an uncertain outcome.

You’re hoping this new approach will outperform your last one, but you know, there’s no guarantee it will.

And you know, the constant worry about whether you made the right move can ultimately become mentally exhausting. It’s like being on that road trip, where you’re second-guessing every turn you make, and never feeling settled or confident in your direction.

Then there’s the feeling of losing control.

Instead of following a well-thought-out plan, all you end up doing is reacting to market movements, news headlines, and the latest investing fads.

And so, when you take this reactionary approach, you’re likely to feel that you’re at the mercy of forces beyond your control.

And, when you find yourself in this situation, it tends to create more anxiety and uncertainty rather than the certainty that you were looking for in the first place.

It’s like driving without a map in a foreign land.

You’re relying on random signs and gas station attendants for guidance that end up leaving you feeling increasingly lost and powerless.

And so, as you continue going down this path, you could end up paying the price of exhaustion that comes from the cycle of hope and disappointment.

You know, when you’re constantly looking for a magic solution to solve your problems, then every new strategy brings with it the hope that this one will be the one solution to help you navigate the market’s ups and downs successfully.

But when your promised solution doesn’t deliver, then the disappointment you naturally feel is simply crushing.

And you know, over time, this cycle can wear you down and ultimately contribute to a sense of burnout.

It’s like starting each new detour with fresh optimism, only to end up disillusioned and tired when it fails.

That’s why sticking to a disciplined investment strategy is like following a reliable map on your road trip.

It may not promise the fastest or most scenic route, but it offers a steady, peaceful journey toward your destination, no matter what sort of obstacles you encounter along the way.

How to Stick to the Plan, Not the Panic

Now, we’ve discussed the pitfalls of reacting to market volatility, the emotional toll of deviating from your plan, and how looking for magic pills can compromise your long-term vision.

And so, by now, I hope that it’s clear how constantly changing your investment strategy can do you more harm than it does good.

Because here’s the good news: there’s a better way.

You don’t have to be at the mercy of market ups and downs or your own emotions.

That’s because, by sticking to a disciplined approach from the start, you can navigate these challenges with confidence and peace of mind, no matter what’s going on in the markets.

That’s why, when it comes to how I approach the markets, there are three steps I take to ensure that I’m sticking to the plan, and not the panic:

Step #1: Review Your Investment Objective

To start, when I’m concerned about what’s going on in the headlines, I take the time to review my investment objective.

Now, when you’re investing, it’s crucial to understand where you’re going so you can choose the right path and stick to it, even when distractions pop up along the way.

Indeed, without a clear goal, you might end up lost, disheartened, and doubting every decision you make.

So then, the purpose of defining your investment objective is to clarify what your money is for.

And so, as you go about this process, you might encounter terms like “Preservation,” “Income,” “Balanced,” “Growth,” or “Appreciation” when evaluating the ideal investment objective for your portfolio.

But don’t let the terminology confuse you.

Ultimately, what you’re doing is trying to determine whether your focus should be on preserving your investments from loss, growing your portfolio in a prudent, risk-adjusted way, or finding a balance between the two.

So, as I get started on this work, I’ll typically ask myself, “Do I understand what my ideal investment objective is?”

Ultimately, knowing my investment objective helps me determine the right mix of stocks, bonds, and other assets, both domestic and international, that will help me navigate the market’s ups and downs.

And if you’re not sure, go back to the basics and ask what the money is for. This work involves understanding your values, like what’s important to you, and then aligning your money with the life goals that are based on those values.

And if you’re still not sure what investment objective is right for you, consider completing a risk tolerance questionnaire.

This is one of the first steps I take my clients through when we prepare their investment policy statement.

Either way, the big takeaway here is to ensure that you clearly understand the purpose of your investment strategy before making any further decisions when you’re tempted to make a move in the market.

Step #2: Check for Investment Misalignment

Now, once you’ve identified whether the objective of your portfolio is to preserve your wealth, or appreciate for the long term, the next thing you’ll want to do is to consider the gap between where your investments are now and your defined investment objective.

This process is like checking if you’re on the right path to road trip destination.

So then, after checking, if you notice that you’re off course, then you’ll naturally make all the necessary adjustments to ensure that you reach your destination without unnecessary detours or delays.

Either way, it’s about ensuring that your money is working as hard as it should be as you’re headed toward your ultimate goal.

So then, one of the first things I do to evaluate this gaps is to simply ask, “Is my current investment strategy aligned with the asset allocation defined by my investment objective?

And so, what am I talking about here?

Well, let me give you an example: a family I worked with recently realized that their initial investment strategy for their children’s college education fund likely wouldn’t cover their anticipated expenses, given rising tuition costs and changes in their kid’s education goals.

So then, to make up for this projected shortfall, we first identified their ideal investment objective and then rebalanced their 529 holdings over to a more aggressive investment strategy to align with their risk tolerance and overall objectives.

This strategic shift ensured that they could support their children’s education while maintaining current contributions.

And this approach not only set them up for success, it enabled them to avoid the need to take on significant debt in the future.

That’s why, by asking the right questions and taking actionable steps, you can identify any misalignment in your investment strategy and make necessary adjustments sooner rather than later.

Step #3: Stay the Course

And the last but most crucial step in sticking to your plan, so you can avoid the panic, is to know when to simply stay the course.

You know, Warren Buffett, the Oracle of Omaha and famed investor, exemplifies how adhering to a disciplined investment strategy fosters trust in your own financial decisions, which leads to long-term success and peace of mind.

That’s why when Buffett speaks, many investors tune into what the man has to say.

And you know, when it comes to market volatility, one of Buffett’s most famous sayings is “to be fearful when others are greedy and to be greedy only when others are fearful.

So then, despite the ups and downs that are inevitable when market volatility picks up, Buffett’s keen observations about human behavior reminds us how essential it is to stay focused for the long-term.

So then, when I’m tempted to make changes in my investment portfolio because I start getting nervous, I ask myself, “Is my desire to change my strategy fueled by a legitimate need, or am I starting to panic?”

This self-reflection helps me distinguish between making necessary adjustments and whether I’m simply making an impulsive reaction to market noise.

That’s why it’s crucial to resist the temptation to react to short-term market fluctuations and focus on your established investment strategy.

Ultimately, it’s about being able to have trust in the process and the foundational reasons for your choosing your investment approach in the first place.

Stick to the Plan, Not the Panic

You know, when it comes down to it, the life goals that you’re bound to achieve are ultimately within reach.

That’s why it’s essential to remember that the key to successful investing isn’t about chasing the next sure thing or reacting to every market up and down when you get nervous.

It’s about having a clear destination, ensuring your investments align with that goal, and staying the course, even when the road gets bumpy.

That’s why, when I’m tempted to panic because of what’s going on in the markets, I’ll take a moment to review my investment objective, check for any misalignments, and commit to my plan.

You know, when market volatility tempts you to buy an annuity to search for a homerun stock, remind yourself of your long-term vision, how close you are now to that goal now, and the disciplined approach that will get you there.

Because if you don’t, if you fail to stick to your investment plan, you’re not just going to lose money, you’re likely to compromise your future and miss out on the life you’ve envisioned for yourself and your family.

In fact, each impulsive decision you make now could chip away at the foundation of your financial future, and lead to setbacks that can be tough to bounce back from.

But here’s the good news: you don’t have to be at the mercy of market fluctuations or your own anxieties. Because, by adopting a disciplined approach, you can navigate these challenges with confidence and peace of mind.

And so, imagine the peace and confidence that comes from knowing that you’re on the right path, steadily working your way toward the life you’ve always imagined.

Picture yourself achieving financial independence, funding your children’s education, and building a legacy that lasts for generations.

That’s the power of staying the course.

Because by doing so, you’ll not only protect your financial future but you’ll also take one step closer to becoming the master of your financial independence journey.