What Can We Control??

I recently attended the Fitchburg Business Appreciation event hosted by Fitchburg’s Chamber of Commerce.  The headline speaker was none other than the President of the Green Bay Packers, Mark Murphy!!  Quite the headline speaker.  His two Super Bowl rings engulfing his right hand weren’t the only things impressive about this man.  He was a poised speaker and he really knew how to capture a crowd.

He was certainly qualified to speak on the chosen topic; “How to Build a Championship Team”, considering he not only won a Super Bowl as a player and the team captain with the Redskins; but as we all know, he most recently won one as the President of the Green Bay Packers.

The two obstacles he said he has encountered and has labeled “the most difficult to overcome” are

  1. Convincing each team member that the success of the team is more important that the success of each individual, and
  2. Recognizing in every situation the things that you cannot control.  For each given game, or even each play, there are things a coach, president, or player cannot control; and being able to put the “uncontrollable” aside to focus energy on the things that can be controlled.

That second point sounds a lot like an obstacle many investors are striving to overcome. 

Realizing that the volatility in the market is something we cannot individually control, let’s remind ourselves of things we can control:

  1. Contributions.  Well, this one is easy and as difficult as it is to admit, we all have control as to how much we are putting away for savings and retirement.  There is always a cost/benefit attributable to every purchase made.  Do you really need to get the latest 4G iPad?  The fact is, the more you are putting away in savings the better your odds will be that you will have more in retirement.
  2. Risk. When it comes to investing, risk determines performance and not the other way around.  Investors tend to focus more time on performance than risk.  And why not?  After all, the basic goal of investing is to make money.  How can you control risk? Risk is controlled through asset allocation and diversification.  We have discussed this in previous blogs and if you don’t like the risk of the market, then you control that risk by putting some of your money in other things that don’t react the same way markets do.  If you are worried about what markets are doing to your portfolio, then it might be a good time to take action and see how much of your portfolio is exposed to the stock market.
  3. Your financial planning.  Often times people go see financial advisors to get help with their investment planning, however, instead of focusing on just investment planning, spend more time focusing on comprehensive financial planning.  When it comes to your portfolio, big picture financial planning helps people to figure out how much risk they need to take as opposed to how much risk they want to take.  When it comes to your risk tolerance, it’s all subjective. Think about it: when markets are strong, you probably feel like most, it’s easy to take a little more risk in your portfolio. On the other hand, when markets are down, you probably instinctively want to be more conservative.

We can’t control the market forces but we can increase our odds to a successful retirement.

Here is a link to the Wisconsin State Journal’s write up on Mark Murphy and his discussion to area businesses.  http://host.madison.com/wsj/business/article_b1c2ea7a-f9d1-11e0-ad24-001cc4c002e0.html.  Thank you Fitchburg Chamber of Commerce and GO PACK!!

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