Vail Daily column: Investors can learn much from workers
Next week, we observe Labor Day, a celebration of the American worker. And there’s a lot to celebrate, because our workers have accomplished great things — many of which also can be useful to investors.
Perseverance: Have you ever read about an inventor who failed dozens of times before finally hitting on a winner? All kinds of workers display this type of perseverance, in one form or another. As an investor, you, too, will need this “stick-to-itiveness” because you will face challenges. Markets will drop, individual investments may disappoint, tax laws may change and so on. But if you’re patient and you follow a long-term strategy that’s based on your needs, risk tolerance and time horizon, then you can overcome those obstacles that may be blocking progress toward your goals.
Inquisitiveness: During your own work, you’ve probably found that you can improve your effectiveness simply by asking a few questions or otherwise learning a little more about your tasks at hand. As an investor, you’ll also find that knowledge is power — because the more you know about investing and investments, the better prepared you can be when making decisions. Sometimes, this knowledge can help you look past the so-called experts who are touting the “next hot stock.” In any case, learn as much as you can, and if you work with a financial professional, then ask questions — as many as necessary. The investment world is fascinating, and it can be complex — but it is also understandable to those who make the effort.
Flexibility: When something isn’t working, you may need to try another approach. Successful workers know this — and so do successful investors. Suppose, for example, you have been trying to boost your overall return by buying and selling investments. After a while, you may realize that such behavior is costly — in more ways than one. You will likely rack up fees and commissions, you may incur the highest rate of capital gains taxes, and you will be disrupting any cohesive investment strategy you’ve established. Upon recognizing these problems, you could decide to “switch gears” and follow a long-term, buy-and-hold strategy. That’s flexibility — and that’s a great attribute for investors.
Vision: Good workers have a clear picture of what they want to accomplish — and they know what they must do reach their goal. As an investor, you also need to establish a vision of where you want to go and how you can get there. So when contemplating your retirement, try to foresee the lifestyle you hope to lead — will you travel the world or stay close to home, pursuing your hobbies? Then, use this vision to help guide your actions, such as increasing your contributions to your 401(k) or IRA.
Transferring what you learn from the working world to the investment arena can help make investing a less laborious — and potentially more enjoyable — process. So put that knowledge to good use.
This article was written by Edward Jones for use by your local Edward Jones financial adviser. Edward Jones and its associates and financial advisers do not provide tax or legal advice. Chuck Smallwood, Bret Hooper, Tina DeWitt, Charlie Wick, Chris Murray and Kevin Brubeck are financial advisers with Edward Jones Investments. They can be reached in Edwards at 970-926-1728 and in Eagle at 970-328-4959 and 970-328-0361.