By SA Gil Weinreich :
Sitting under your Christmas tree, enjoying unhurried time with your family, or perhaps lighting the menorah, enjoying unhurried time with your family - this sublime peace is the antithesis of the world of business. There, everything is subject to the pressure of deadlines. There, a business deal not made may be an opportunity forever lost. In the world of stock investing, the pressure is even greater: you snooze, you lose. The way to not lose is to closely and constantly monitor your watch list for buying opportunities and to closely and constantly monitor your portfolio for opportunities to take profits.
Except for the small number of people with the time, skill and passion to actively trade, this sort of stock investing is filled with anxiety and tension. Sure there's the occasional thrill of big wins, but there is also the inevitability of painful losses. And given that most people feel the pain of loss more acutely than the joy of gains, this is no way to live.
That's why when it comes to investing, it's a wonder that more people do not opt for a "goals-based," long-term financial plan rather than compete head to head against the professional investors and high-frequency trades with their technological and information advantages.
Goals-based investing generally allocates one's savings into three buckets, one for needs like food, clothing, shelter, utilities and retirement; another for wants such as vacations, a new car and other lifestyle purchases; and a third for legacy aspirations such as a bequest to children or favorite philanthropies. The framework seeks to match assets (such as stocks or real estate) with liabilities (such as mortgages and other loans) so that these two sides of the ledger do not get out of balance, as happens often when people pursue their wants such as travel and gadgets without current funding of future liabilities such as retirement.
Everyday can't be like Christmas or Chanukah - even with a sound, long-term plan. You likely have other vocational responsibilities to tend to. But you can set yourself on a path toward financial security rather than introduce a greater degree of insecurity into your day-to-day financial life. Interjecting a little holiday peace into the everyday consumer arms race may be a good way to reduce the stress around money felt throughout the year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.