Time Horizon: Invest With Purpose

Posted By: Jeremy Reif
Mon, Aug 10, 2020
Time Horizon: Invest With Purpose

Our markets are anything but stable. Sometimes they waiver a bit in the form of a pullback, and other times a series of down days signals the start of a recession. Regardless of whether the market roller coaster is spurred on by natural market cycles or a significant political or business event, we tend to lose sleep and start worrying about our investments.


The truth of the matter is, you may be losing sleep over nothing, depending on your time horizon. If you plan on retiring in 30 years, a four-month freefall like we experienced at the end of 2018 isn’t going to affect your long-term investments all that much because you have plenty of time to recover. On the other hand, if you are getting close to retirement and plan to be retired for 30 years, a blip, even a small one, could be cause for alarm. How can we use the time horizon to our advantage when investing in the stock market?

Intentional Investing

Take a look at all of your investments. Are they all in one big pot, moving toward the same goal, or do you have an account for your child’s college education, a future home renovation, or maybe one for your children’s inheritance? Defining the purpose of each investment should be a key priority because it will help you make decisions and react to market movements appropriately.

The purpose and goal you have for each of your investments will dictate how you invest. If you have an investment account for your heirs, the goal is to have long-term growth for a distant date in the future. You won’t be touching this account and can afford to invest a bit more aggressively because you have time on your side.

But if you are already retired and need to withdraw systematic distributions to cover your living expenses, a market downturn affects how long your money will last. Instead of generating income, you are relying on the investments and savings you’ve accumulated during your working years. If the risk level of your investments isn’t in line with your goal of making your money lasts as long as possible, you hurt your chances of a stress-free retirement. You just don’t have the time to recover any lost money.

A Double-Edged Sword

Then there’s volatility. Many people invest in the stock market because they need to, not because they want to. They need their money to grow because their principal alone won’t be enough to carry them through their retirement. Investing in the stock market helps replace distributions from a retirement account and also allows you to keep up with buying power and stay current with inflation. But when you see the plethora of news headlines about the volatile market, it may tie your stomach in knots or tempt you to stick your head in the sand. Investing, then, can be seen as a necessary evil.

Here’s the good news: investing doesn’t have to make you feel that way. If you have invested with intention and set goals for each account, you should be able to put each market movement in perspective and take the necessary actions.

Bring In An Objective Perspective

How do you decide when is the right time to make adjustments to your investment portfolio? You don’t want to be checking the markets every day, but it is vital to reevaluate your investments from time to time to make sure your goals, risk tolerance, and time horizon haven’t changed. If you don’t have a plan for your investments, I’d love to help you invest with purpose and minimize the emotions involved in the investing process. Whether your plan is simple or multi-faceted, I can help you get started and point you in the right direction. Schedule a call and meet me virtually.

About Jeremy Reif, CRPS®
Jeremy Reif is an independent financial advisor with more than a decade of experience in the financial services industry. He is also the owner of Point Wealth, LLC, an independent financial planning and investment management firm. With advanced credentials and training in retirement planning and financial planning, Jeremy focuses on helping individuals and families pursue financial independence. Regardless of the services he’s providing, he focuses on talking openly about financial planning, the industry, common questions about retirement planning, and more to help everyday investors gain more confidence in their financial opportunities. Based in Wausau, Wisconsin, Jeremy serves clients throughout the state and can work virtually with clients throughout the country. To learn more, visit http://pointwealthmanagement.com and connect with Jeremy on LinkedIn.
Advisory services are offered through Point Wealth, LLC, an Investment Advisor in the State of WI. Whenever you invest, you are at risk of loss of principal as the market fluctuates. Past performance is not indicative of future results. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.
Point Wealth, LLC is not affiliated with or endorsed by the Social Security Administration or any government agency.
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