The Next Time You Have Your Oil Changed…


I was recently visiting with our client Ron, and he mentioned something that really got my attention. He said, “Jim, you taught me a lesson about investing when we first started working together that I have followed, and it has worked out beautifully.”


I am always interested in ideas that clients find particularly helpful, especially ideas that have withstood the test of time - 16 years in this case. I was curious so I asked to which lesson he was referring. He said:

“Jim, you said I should look at my investments about as often as I get the oil changed in my car. And here is the real important part: put the same amount of emotion into it.”


We shared a good chuckle as I had forgotten all about that one.


Here are just a few of the stock market cycles Ron and his wife Kathleen have experienced since we started working together in September 1994:

Technology Boom (1990s) +239%
Technology Bust (2000-2002) - 26%
Recent Downturn (mostly 2008) - 43%
Recent Rally (mostly 2009) + 61%


During all the market’s ups-and-downs, Ron and Kathleen remained calm and took in stride the performance of their portfolio – both good and bad.


Please Lower Our Income

How “beautifully” has the simple advice above worked for Ron and Kathleen?


Retired for a few years now, they stopped by the office to ask us to lower the income they receive from their portfolio. They have more income than they need to satisfy their very comfortable retirement lifestyle.


The Moral of the Story

The temperament of the investor is a key factor in how successful they will be over the longterm. The most successful investors we have worked with over the years exhibit a bit of emotional detachment in how they react to their portfolio’s ups and downs. The enemy of successful investing often isn’t how a portfolio is structured or what is going on in the economy; it’s how we respond to news events. So the next time you are tempted to sneak a peak at how your portfolio is performing, stop and consider “Is it time to get my oil changed?” If not, don’t look.