After you’ve covered this important information and your Family CFO has generated an investment plan, it’s time to sit back and trust him or her to manage your finances with your family’s best inter- ests at heart.
This is the hardest part, because it’s difficult to do nothing. Especially when the market is fluctuating and constantly in the news. But once your Investment Plan is implemented, it’s time to hold the course. Let go. No matter what is happening at the time (the “crisis du jour”), it’s important to not let your emotions take over.
Remember that you have a very defined plan which will get you to your goals, and blips in the market won’t affect it in the long run. By following the process of determining what’s really important in your life, and then implementing an Investment Plan that matches those things, investing becomes fairly simple.
But don’t confuse simple with being easy. It’s hard to watch what’s going on in the market and not respond. The good news is that investing, when approached with this disciplined process, is under your control. What really matters, and what ultimately determines your success over the long haul, is determined by your behavior—what you do and don’t do during market ups and downs—and only you can control that. (You can learn more about how behavior impacts your investment success at www.behaviorgap.com.)
In many ways, your Family CFO is your behavior coach. If you ever do get tempted to act in ways that may not be in your best interests, he or she can pull out the notes from your Discovery Meeting and point to your Investment Plan, using it as a touchstone to keep you grounded. Only if something drasti- cally changes in your life should you second-guess your investment plan. Of course, there will be peri- odic rebalancing with your investments when necessary, but no matter what the hot topic is around the water cooler or at cocktail parties, remember that your plan is there to get you to your goals.
So, turn off your favorite money programs, throw away your financial magazines (or read them pure- ly for entertainment purposes) and start looking for a great Family CFO who will help you put your focus in the right place. Doing this will enable you to spend less time worrying about your invest- ments and more time on what’s really important to you and your family. And guess what? Your investments will do better too.