I Shoveled Snow Off the Street – Who Does That?

With no assigned parking space, we park our car on the quiet suburban Toronto street in front of our building. Eight to nine months of the year this parking arrangement is only a minor inconvenience.

Saturday morning, before my lovely wife drove our children to Jiu Jitsu, I cleaned the snow off our car and made a path to ensure the car would not become stuck in the snow as it drove away from the curb. After my family left, I continued to shovel; I shoveled enough snow off the street to clear four parking spots.

Our street is conveniently situated for motorists who are visiting local businesses, and, on week days, parking is not always easy to find. As I spent half an hour dodging cars to clear snow-covered, on-street parking spots, I thought about what neighbors might think as they saw a grown man shoveling snow from the street. A younger, more insecure version of me may have stopped, but older, experienced Beau thought it better to shovel on Saturday than complain about no parking on Monday.

Repeating this mantra while I cleared the parking spots, I realized my reason for shoveling the street was analogous to the motivation for investing diligence. If you want to attain financial security or financial independence, you need to put in the work today. Even if researching stocks or reading a fund prospectus is not your idea of fun, you need a plan to achieve your goals.  Compound returns are powerful, but only useful to those with the ambition to set goals, create a plan, and execute.

Want to retire (financial independence)? Do you want to afford a vacation every six months, or have the means to put your kids through college? It is better to have a financial plan today than complain about your finances when you are older

Buy Low, Sell High: Strategy Versus Emotion when Markets are Near All-Time Record Levels

My buddy asked me why I always recommend stocks that are near their five-year record highs. After a brief moment for reflection, I told him, “The market is near an all-time record high, everything is at its five year high.”

Maintain strict target allocations for each asset group within your portfolio. In the main portfolio I manage, my goal is to hold 15 percent of assets in cash. While the market has progressed to the new record high, several of my investments have performed very well. Were I to sell any position that has performed well of late, the proceeds must be reinvested to stay in line with my asset target levels. In this instance target allocations will prevent me from leaving the market while it is middle of its rally. My friend may have capital to invest, but is rejecting my suggestions because of their recent performance preventing him from buying at the top or as the stock’s performance really about to take off?

Furthermore, the recent market success leaves me and my friend enthusiastic about investing – I can’t wait to buy something else that will make money, and he’s all over me for the next hot stock! The mandate to maintain a balance of cash equal 15 percent of the portfolio’s assets restricts my exuberance and may prevent me from buying at the market’s peak before a significant decline.

By maintaining the allocation targets I chose strategy over emotion. By avoiding an emotional response I may not be as successful, I might miss a run or leave money on the table before a downturn, but I will be less likely to make a mistake.

Stay on Course - Find Help to Do So

When I chose to forgo employment to care for my son I was lucky to stumble upon podcasts created by The Motley Fool (TMF). Though I had been investing since graduate school, TMF's business-based approach to investing piqued my interest and improved my knowledge of business and investments. In the past four and a half years ago since I found TMF's podcasts I have become a paying subscriber to a Fool newsletter; TMF has also grown its podcast offerings from one podcast four times a week plus a weekly radio show to include a second daily podcast and two weekly podcasts. 

My advice for successful investing is to find a community or group with which you can learn and share your experiences. TMF provides continued reminders that my goals will be achieved through long-term focused, disciplined investing. Find something that works for you.