Mismatched Risk

My youngest son, his greatest mission in life, I think, is to frustrate me when it comes to laundry. You know, when you’re doing laundry and you’re trying to find socks that match and you’re putting them all together and that sort of stuff, and you get him put away and help him out. And then every morning he comes up ready for school and he’s got two different pair of socks on.

Completely mismatched all the time. And apparently, I don’t know if that’s the cool thing to do or if that’s just him, because he knows it probably gets under my skin of after trying to make sure we find those matches. But to have that mismatch approach there. But Jon, when I think of that, you know, I often think, you know, mismatched socks, how can that possibly be any related to investments?

But oftentimes we see people come into the office and they completely have not matching investments to what they’re trying to accomplish with their life. Yeah, it’s so true. I mean, just recently there’s a couple they’re in the Benzie area and and she’d been working for the same employer for I think it was close to 33 years now. And so it’s one had done a great job saving building up this 401(k) and basically through our conversation said, well, hey, I want to be, you know, pretty low risk.

I’m looking to retire in the next six months. I really don’t want a ton of risk exposure to the market. You know, and if things are volatile that that would really, really sort of upset me. And so as we were able to dive into that 401(k) pretty much found, okay, wait a second. You’re ultimately in about 100% stocks within this 401(k).

And she said, well, I assumed that as I got older it would just sort of take care of itself. And it would it would reduce the risk exposure. But as we talked a little bit further, she sort of said, well, yeah, I set this up 30 plus years ago and just sort of picked the most aggressive option. But just again, sort of made that assumption that somehow somebody was out there taking care of this for her and, and ultimately learned pretty quickly as I analyze that, that’s not the case.

You were, she was in a in a structure that was completely mismatched from where her comfort zone was. Yeah. And that can be really scary, right? There’s an opinion or a belief by somebody that something’s happening one way that’s not happening either. Now thankfully, you know, for in her case and in many people’s case, we see this often where we’ve been in pretty good market times lately.

Right? We’ve been fortunate if you’ve been in equity exposure, generally speaking, you’ve probably done fairly well recently because we haven’t had too many big pullbacks per se in the market. So again, kind of I see that same situation happening. Some folks maybe that are self-managing or have bought some stocks and have been sitting on those, again, likely they’ve done fairly well.

But understanding we kind of get lulled to sleep thinking that these things are just going to always go up when we get into these patterns that generally do pretty well. Again, it’s like a car that eventually is going to run out of gas. You know, you could be set that thing on cruise for a long time, get good gas mileage going down the highway, but eventually you’re going to have to stop and refill the tank.

You know, when it comes to different investments, we got to be careful with looking at that. That’s why when we sit down with folks that come in from the TV show or come in from, you know, being referred to us, and we spend a lot of time even to the point probably where some people are like, why do we keep talking about this?

But truly understanding what your comfort level is? Our goal is to never have somebody open a statement up and say, wow, I had no idea I could lose whatever it is. And I hear that far too often when folks, when they have their 401(k)s, or they have something that they don’t pay attention to, is they get trapped in thinking that they can’t lose money.

Yeah, it’s so true. And you want to be talking to your advisor on a regular basis. I mean, there’s there’s a lot of things that can change with the markets, with the economy that you want to be taking into consideration. And along with that, major life changes. I mean, when you think about it and is your, you know, let’s say you’re changing careers and you had an old 401(k) plan.

Well, what are the best options? Is it best to roll it into the new company’s 401(k) plan? Or should you consider rolling that to a traditional IRA or Roth IRA, whatever it may be? So there’s different decisions that need to be made as different life changes occur. And so you want to have a relationship ideally with that financial advisor.

So you’re walking alongside each other and giving some good guidance along the way for, for all those major changes that can be happening. So true Jon, I mean, this is your financial life ahead of you. I mean, this is such a big part. You’ve worked so hard to put money away for it. Don’t take it lightly. Don’t let it go unnoticed.

People spend more time planning for vacations or doing, you know, scrolling online or whatever that may be. Spend a little time in and sit down with an advisor. Understand what you have. Make sure your investments match up with your goals and objectives so you can have a successful future ahead, and so you too can plan to retire well.