Broker Check

The Sweet Spot

June 30, 2020

Everyone who has ever played baseball, softball, golf, tennis or any contact sport, knows the sweet spot. In baseball the sweet spot is the middle of the bat’s barrel. In tennis, it is the middle of the strings. In boxing, it is landing a punch on target, just as the arm is fully extending.

Hitting the sweet spot produces that feeling of electricity that travels through our arm and, sometimes, through our whole body, right down to our toes. It also produces the best results.

In financial planning there is a sweet spot, but where it lies is less obvious. Consequently, it is more challenging to find. Finding it, however, is worthwhile.
The reason for this is that we are all unique. The number of factors contributing to our individuality are immense. Some folks like driving at 50 mph in the right-hand lane. Others prefer to cruise along in the middle lane doing 70. Still others stay in the passing lane at 80 mph or faster. I am a middle lane kind of guy myself.

If I had to constantly drive faster in the passing lane, it would not be long before I began feeling anxious and stressed. If you forced me to stay behind someone doing only 50 in the right-hand lane, I would become frustrated. Goldilocks did not like the porridge to be too hot or too cold. She preferred it “just right.” I think we all do.

When it comes to investing, we should arrange our portfolios - our financial mosaics, as I like to think of them - in such a way that we hit our personal sweet spot, to the extent possible. That would be the place where we have the best balance of assets, relative to our tolerance for risk and volatility.

This is crucially important because investing is an everyday, lifelong endeavor. With adequate motivation, we all can endure quite a lot of discomfort for short durations. Living every day of our lives in a perpetual state of discomfort, however, is something else again. Yet people do it in their investment lives all the time. They bemoan the rollercoaster ride their assets are on yet fail to take action. It need not be so.

Through a carefully conducted diagnostic dialog, we can gain an understanding of what you want and just as importantly, what you do not want. By evaluating what you wish to accomplish financially, we can determine the correct lane in which to travel toward your goals, so to speak. One that is neither too fast, nor too slow but is just right for you.

Together, we can find the sweet spot.

There will never be a point in our lives that we do not care at all about money. Even if we are lucky and successful enough to amass a fortune such that we never really need to be concerned that our lifestyle will change.

We will still care about succeeding generations, charities, favored institutions, places of worship, etc. People who are responsible stewards of their wealth while they are alive generally do not take a devil may care attitude towards what happens to their loved ones when they are gone. They seek to structure their estates in ways that garner the most benefit for those they care about.

Saving and investing are truly the longest of long-term endeavors. I believe that choosing an asset mix that will make that journey as pleasant as possible is a key component in pursuing our goals. It will help make us happy in the here and now, not just in the long term.

If you like, work with a financial planner who has earned your confidence, to work toward hitting that sweet spot … and enjoy the journey.

Scott R. McGimpsey June 30th , 2020

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 Cetera Advisor Networks LLC 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. Securities offered through Cetera Advisor Networks LLC, Member FINRA/SIPC. Advisory services offered through Summit Financial Group, Inc., a Registered Investment Advisor. Summit and Cetera are affiliated and under separate ownership from any other named entity.