Investing for 2017? Copy Successful Habits

As we near the end of 2016, many of you have been asking us some questions: What do we do now for 2017 and the future?  What is the "Trump effect" going to be, and how should we change course? The Dow Jones Average has set all-time highs. Should we get more aggressive? More conservative?

This focus on the news and external phenomena are common in any year. After 22 years of working with individual investors, there really is nothing new under the sun.  Human nature hasn't changed.  are anchored to the news they watch their political biases and their own personal anecdotes. Some people chase returns, wanting to buy whatever just went up. Others try to time the top, selling just before "the next decline." 

Fortunately, a successful long-term investor can truly ignore most of the news, as well as the current Dow Jones levels. You have a lot more control over your fate than you may realize.  With that in mind, what does this month's or this year's news really matter?  Answer: It probably doesn't...provided that you follow a few controllable best practices along the way.  

So what do the financially secure people get right? Recently we reviewed our clients and discovered some interesting things:

Regular Saving Habits

The vast majority of our clients accumulated their portfolios from their own savings over time. With only one exception, our top clients never received a large windfall. Rather, they saved regularly.

Frugal McDougal

They spend less than they earn. Simple, but not easy.  These people made sure that they invested their first money, and lived off the remainder.  It's the only way to save enough.  If you are doing this backward, stop. It may be temporarily hard, but you are unlikely to accumulate a large amount of money without setting enough aside each pay period.  Just do it.

Owning vs Loaning

Our most successful clients seem to have owned more that they loaned.  Loaning money for a specific rate of return seems a lot more secure and certain.  But for periods of 30 years or longer owning has been the way to go.  The most successful investors tend to own more stocks, businesses, and real estate. 

Long-Term

But those ownership investments can bounce around a lot along the way.  We have all seen homes drop and rise in value. Stocks dropped by 50% or more in late 2007-early 2009.  The only way to make it through the stress of such declines is to have a long-term view. It helps you keep your emotions in check and take advantage of declines, rather than become a victim.

Unless your life expectancy is less than 20 years, you will probably be in this for the long haul. Most people are investing for the very long term, more than 20 years. For Gen-X, Gen-Y & Millenials, you're looking at investing for another 40 or more years! 

Our most successful clients keep their eye on the long-term and don't get too wrapped up in the year-to-year swings. Rather, they believe in their habits and wish to benefit from participating in the growth of the global economy. 

So focus on what you can control.  Stop trying something to "see how it goes." Ignore the first year, even.  It's probably irrelevant. As long as you are following successful habits, you stand a much better chance of achieving your long-term goals.

For more information on developing your next good habit, please contact us at (847) 299-8877 or email us at advisors@athenaprivatewealth.com.  We would be honored to work with you.
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