Investment is a Journey!

I am sure you have heard this sentence or something similar by now, but I would like to take it further and literally compare these two elements, Investment and Journey.

Most of the time people used to have planned journeys. They will start their planning mostly weeks before, if not months. They will either subscribe to price alert or keep on checking prices on the daily basis. Similarly, if we should have done proper planning to identify investment we would like to go with, and monitor it’s performance for at least one quarter.

We would have set timelines too by which we would like to complete the journey, and make necessary arrangements for journey accordingly. The similar way in life we have some set timelines for most of the goals too, retirement or child education etc., and we have to make investments accordingly.

If we do not start the journey on time or sooner than that then most likely either we are not going not going to make it on time OR we have to rush ourselves by increasing speed OR go with faster (and most likely expensive) option. But certainly, we do not abandon journey. Similar way, if we do not start investment for goals on time or sooner than that then most likely we are not going to have required corpus OR we need to increase investible amount OR go with more return yielding (and most likely risky) investment. And certainly, we should not abandon our investment journey.

Roads are not consistent throughout our journey, on bad roads we have to take stops to check vehicle condition and make necessary repairs, on good roads we have to pick us speed to cover-up delays. Similarly, all years are not going to be same, when the economy goes through bad patches we have to take a moment and check our investment vehicle condition and make necessary changes, on good years we have to be aggressive to make up bad year losses.

Though our journey destination is miles away we have visibility for about half a mile or so and we have to drive based on what we see on that half a mile distance. Similar way, our financial goal timeline is mostly more than a decade in future and mostly we can predict economy condition for the max forthcoming quarter and take investment decisions based on foresight information.

On the road, there used to be lots of advertisements and other things which would try to distract us from driving but mostly we ignore them and keep on driving. Same way, there are lots of financial advertisements and noise around it to distract us from our investment philosophy but we should ignore most of it and stick to our philosophy.

Our tendency to drive may not be same as of other drivers on roads, we may be driving on low / normal / high speed casually. And at times it depends on our situations too. Same way, not all individuals have same risk capacity, we may have low / average / high-risk tolerance capacity, hence investment strategy may not be same with other individuals. And at times it may depend on our objectives for investment.

The long journey is kind of boring, similarly, long-term investments are also boring.

There could be many more similarities. So we should plan our financial journey with the same level of excitements and precision details as we usually plan ours on the road journey.

Enjoy!

 

Harsh