Control What's Possible
If you feel bad listening to the news, looking at the television, or watching the stock market, then quit doing it. After all, you can't change the outcome. Instead, focus on what you can control.
If it were productive, we could talk about oil prices, but why would we do that? We cannot control any of these things--you nor I nor any politician nor any CEO--not even the folks invited to the annual World Economic Forum in Davos, Switzerland.
Although any one of those issues may be important to the short-term investment ups and downs, none of them is within our control.
There are also unimportant issues, and quite frankly, over the long haul, all of the issues just categorized as important are less important in the long term.
As odd as it seems, the only important financial issue over the long haul is the answer to the question: Will you outlive your money or will your money outlive you? And then, of course, is your money invested in such a way that assures you will have something left so you continue to live with independence and dignity.
There are issues within your control and issues over which you have none. We have control over our spending and saving. We have control over whether we do something unwise. We have control over whether we stay invested for long-term goals or whether we take action on any one of the unknowable, uncontrollable, important or unimportant news items that we come across daily.
In a nutshell, we want to spend our time and energy on the green star in the diagram above. We want to spend time on the important issues within our control. For another version of this approach, see JP Morgan's asset management diagram. Today, like many years past, the important controllable issues are not much more than the following advice that we can give our kids and grandkids:
Save more. Spend less. Don't do anything stupid. That's the green star.