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Hail Mary Investing

| July 12, 2017
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Hail Mary Investing

Jeff Goldblum, playing the role of Michael, a magazine journalist, in the 1983 movie the Big Chill said, “I don't know anyone who could get through the day without two or three juicy rationalizations.” That is certainly a concept worth thinking about.

Too many of us live our lives caught up in a constellation of fantasies. One of the most damaging fantasies is the, “One day I’ll _____ (fill in the blank.)” This is a less than rational rationalization that we feed ourselves. We con ourselves into believing that today we don’t have the time or wherewithal to focus on losing weight, quitting smoking, having a checkup, saving money, etc.

The rationalizing process we go through gets us to believe that somehow tomorrow will be different and we will make the changes we know we should have made the day before. Of course, that tomorrow becomes today and we postpone things, once again, for the future.

Benjamin Franklin said, “Tomorrow, every fault is to be amended; but that tomorrow never comes.”

I don’t want to rain on anyone’s rationalizing parade. I do, however, want to give you the information you deserve. So here it is. I believe too many of us, when it comes to our investments, obsess over rate of return while barely considering our rate of savings. In fact, I suspect most investors have heard the phrase “rate of return” while the majority have never been exposed to the concept of “rate of savings.”

Consider, if you will, the pension funds we read about in the news which are faced with heroic shortfalls. Why is this? I offer that it is because, to make things more palatable, rate of savings was sacrificed at the altar of rate of return. In other words, rather than being conservative and telling folks more money had to be put into a pension to be assured that there would be enough to be drawn upon for the future, calculations of pension fund growth focused on ginned up rates of return. Oh, and this has taken place in the hands of professionals!

Now, consider the average person. We all know that people are living longer. We all are smart enough to realize that there will probably be a time in the future when we will retire, work less or simply earn less. And yet, too many of us are kicking the wealth building can down the road.

What is our rationalization? “Well, next year I will really begin saving in earnest and I will make up for any lost returns this year by finding some really good investments next year. The fantasy is that we can make up for what we do not do now by Hail Mary investing.

What is Hail Mary investing? Think of football. One team is down considerably and so, in the final minutes or seconds of a game, the losing team’s quarterback throws a long pass downfield, hoping against hope that one of his receivers will catch it and score. Does it ever work? Yes. Is it a game plan coaches rely on? No. Does it work most of the time? I don’t think so and I have been watching football for years.

Do we really want to live in a personal financial fantasyland, rationalizing that when our own economic two-minute warning comes that we will suddenly scrape up some money and find some remarkably high yielding investments that will make everything turn out ok? Is this what we want for our families? Is this what we want for ourselves? Do we really aspire to a future of economic uncertainty and a drastically diminished lifestyle? Of course not.

Act now or chances are high that you will be repenting at leisure. A leisure limited by a lack of funds. It may not be as drastic as deciding between buying food or medicine, but nobody wants to work all their life only to be constrained later by a lack of resources.

Consider working with a financial services professional, to put together an organized plan that helps you save for the future, build your wealth and alleviate the anxieties that come from knowing that you are not doing what you should be doing. Act now. You can do this. Do what you know you should, today.

 

Scott R. McGimpsey July 12th, 2017

This material was prepared by Scott McGimpsey and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources, however, we make no representation as to its completeness or accuracy. Neither Summit Brokerage Services Inc. nor Scott McGimpsey is engaged in rendering legal, accounting, or other professionally services. If such assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any federal, state, or municipal tax penalty. Moreover, a diversified portfolio does not assure a profit or assure protection against loss in a declining market. UNIFIED PLANNING GROUP is an independent firm with securities offered through Summit Brokerage Services Inc., Member FINRA, SIPC

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