Shooting the Rapids Toward Retirement

Whitewater rafting is an invigorating experience which draws a global delegation of adventure tourists to our mountain regions each summer.

Like many thrill-seeking activities, the rush of shooting the rapids unleashes a full panel of “happy chemicals”— adrenaline, dopamine, and endorphins—which heightens our senses and keeps us coming back for more. For many investors, positive sustained advances in the stock market can have similar effects.

As a financial advisor, whitewater rafting serves as a widely-accessible analogy for investment planning. Rafters and investors alike must:

  • Carefully chart a proper course
  • Equip the proper tools and equipment
  • Prepare for periods of turbulence and tranquility
  • Remain calm in a crisis

Below are a couple of thoughts and strategies to help investors riding high in a bull market prepare for turbulent waters downstream:

  • Identify or revisit goals and objectives – Clearly defined goals identify where we are today and where we need to go. Maintaining a close relationship with a financial advisor and utilizing managed account solution in a 401(k) plan will meaningfully facilitate the development, implementation, and oversight of goals-based investing. Only once a proper course is charted can you equip yourself with the tools needed to successfully complete your journey. .
  • Review your investment plan – Discuss your investments with your financial advisor to confirm your portfolio mix fits your profile. Together you can revisit how much you need to earn and how much risk is involved with your plan. If you’re invested in a 401(k) managed account, then your investments are being automatically managed based on your risk profile and you have the option to adjust your portfolio based on your preferences. For those nearing retirement, bull markets present a great opportunity to modestly adjust your long-term asset allocation based on recent successes in preparation for the future.
  • Prepare yourself mentally – Studies show that investors hate losses about twice as much as they like gains. On August 2nd, the Dow Jones Industrial Average hit 22,000 for the first time in history, making this the second longest bull market since World War II. Unfortunately, there is no crystal ball to accurately predict when markets will decline, so it is crucially important at market highs to ensure that we are comfortable with, and committed to, our long-term asset allocation and to adjust our expectations accordingly.
  • Seek wise counsel – A study by the Department of Labor (DOL) identified that the two most commons sources of household financial advice were friends or relatives and online research. While some friends or relatives may be a licensed or credentialed financial professional, statistically speaking, most are not. It is important to learn and collaborate with our peers through the exchange of ideas, but your life savings is best served by a trusted advisor. As humans, we converse, collaborate, and learn in the interest of preservation and success. When in crisis, a trusted guide can best help us navigate the turbulent rushing rapids. During periods of uncertainty it is best to partner with experienced providers who are accustomed to the duty and honor of being your fiduciary. Unified Trust has served in a fiduciary capacity for over 30 years. Placing your interests first has always been our top priority.

This post is the first of a two part series on investor behaviors under varying market conditions. The second post will focus on the lows of market lows and strategies for recovery when investors experience market declines.

About Michael Samford view all posts

Michael Samford has been a member of the Unified Trust team since 2007 serving in capacities which include operations, sales and marketing, client service consulting, and advisory services. As Digital Advice Manager, he will guide Unified Trust’s digital advice strategy to deliver a high-quality, innovative, digital advice experience that is memorable and inspirational. Michael’s interests in outcomes coaching and experience engineering are fostered through more than a decade of experience with Unified Trust’s innovative and discretionary approach to financial and retirement planning. He contributes to Unified Trust Company’s fiduciary investment process as a member of the Trust Investment Committee and serves on the firm’s Trust Executive Committee. Prior to Unified Trust, Michael attended Centre College and graduated with a Bachelor of Science in Financial Economics. He currently holds the Qualified Plan Financial Consultant (QPFC) designation offered by the American Society of Pension Professionals and Actuaries (ASPPA) as well as the Accredited Investment Fiduciary (AIF®) credential through Fiduciary 360°.