Click I learned more about risk this week from a few teenagers while preparing to return from a trip to California. Due to all the rainstorms, when it came time to fly home, I went through a very detailed weather briefing. I concluded the trip would be safe to take but with mid-level winds in excess of 140 mph blowing across the mountain range, it would likely be turbulent. I then briefed my passengers and explained that the trip would be bumpy, but we would arrive safely. Oddly, my mostly teenage passengers were thrilled at the prospect of a roller coaster ride home. One replied (while demonstrating the action), “It will be more fun if we hold our hands up.” What normal passengers fear, they saw as a benefit.
When I plan a flight my focus is on getting to my destination safely. I understand that safety of flight is largely dependent upon decisions that occur before I even drive to the airport. The fate of most fatal plane crashes is set before the plane ever leaves the ground.
Once in the air there may be new challenges to face that hadn’t been planned on. One of the common issues pilots deal with is trying to avoid turbulence, not usually for safety, but for the comfort of their passengers. On some days ATC’s main focus seems to be helping pilots find smoother altitudes. Similarly, financial advisors are constantly looking for ways to avoid volatility in their client accounts, mostly for client comfort. Given the political volatility right now, I suspect many surprises lie in store for investors, and advisors will be working overtime in their attempts to minimize financial turbulence.
Along these lines, I overheard a conversation between my son Jared and a client in which they were discussing methods for selecting investments. At one point Jared said, “Remember, it is not our job to pick winning stocks, it is our job to pick a winning portfolio.” I must admit, this dad was beaming to hear my son, who has been working around our office since before he could read, come up with such a brilliant statement. It reminded me of the old pilot’s saying that “any landing you can walk away from is a good one, and if no metal was bent, it was a great one.” A successful portfolio is not defined by individual stock selection or by avoiding all turbulence, but by whether you are reaching your goals.
My risk lesson with the teenagers continued after we landed in St. George when I advised them on the car ride home to text their mothers that they were safe. One of the girls, noting that my 16-year-old was driving the car, responded with a smile, “I think I will save that text until after this car ride is safely over.” Indeed, we all view risk differently. In the end the girl was right. It’s all about getting to that final destination intact.
Hi, I'm Dan. I'm a CFP® Professional.
Securities and advisory services offered through Commonwealth Financial Network®.
Member www.finra.org / www.sipc.org , a Registered Investment Advisor. Wyson Financial, 1173 S. 250 W. Suite 505, St. George, UT 84770.
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