The short run and the long run

In the short run, you may think it’s all about performance.

In the long run, it’s about quality of life, security for your family and not running out of money.

In the short run, many decisions seem important.

In the long run, there are really only a few, very crucial decisions and relationships you must get right.

In the short run, picking stocks or mutual funds may seem easy.

In the long run, having a disciplined investment philosophy and a financial advisor that helps you stay disciplined are key.

In the short run, high dividend paying stocks and high interest bonds seem good.

In the long run, they are only good if the stock price does not plummet and you get your bond repaid at maturity.

In the short run, predictions about the future are difficult.

In the long run, short term predictions don’t matter.

In the short run, understanding the tax efficiency and costs of your investments may not seem important.

In the long run, due to compounding, having an investment advisor that focuses on the tax efficiency and costs of your investments can have a major impact.

In the short run, you may focus on the volatility of the stock market and your emotions.

In the long run, the stock market rewards patience, diversification and not letting your emotions win.

In the short run, it is easier not to talk to your family about investments, money, financial and estate planning.

In the long run, talking with your kids (and grandchildren) about finances, your financial life experiences and your financial advisor is best for all of you.


Thanks to Seth Godin, whose blog post here inspired this post. He finished his this way:

“In the long run, building things of value makes sense.

Add up the short runs, though, and you’re left with the long run. It’s going to be the long run a lot longer than the short run will last.

Act accordingly.”

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