Prepare to win

December 13, 2011 Categories: The Art of Advising
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Last night I rushed home from my daughter’s basketball practice so I could . . . fold clothes. (And yes, trust me, this does connect to Investing.) You see, the next morning I had to leave early to catch a flight to Arizona for client meetings. I could hear my wife and children upstairs going about their nightly rituals that I would miss while traveling.

I couldn’t help but ask myself if I was making the best use of my time at that moment, or if it would be better spent with my family considering I was going to be out of town. 

As I stood there balling socks and folding shirts, it dawned on me that I was doing this so that I could pack quickly in the morning– and still have time to wake my children and see them off to school before racing off to the airport.

Like all frequent travelers, I know exactly how long it will take me to pack and how long I need to make my flight. With experience, I have learned that the secret to packing quickly isn’t in the willingness to do it quickly but in the willingness to prepare to move quickly.  (Having a spare suitcase ready to go is an old trick that works.) It’s like my old football coach used to say, “Willing to win is not as important as willing to prepare to win.

Tortured travel and sports metaphors aside, this is exactly what today’s investors should be doing. Everyday your clients are bombarded with “noise” about developments in Europe or the Super Committee.  These headlines seem to require our urgent attention and we are challenged to “do something.” But these panic-induced trades are often not in our best interest  – and they can be prevented.

An honest conversation with your clients can help them prepare their reactions for events like these even if you can’t foresee them. Even if your clients are not swayed by headlines, this sort of lifeboat drill can help them be prepared in case of personal emergencies; it can help them separate out the events that warrant their attention and emotions from those that don’t.

Talk to your clients and help them plan their reactions for a crisis – real or imagined. This exercise will also give you insight into how to best counsel them in times of stress. After all, you don’t need the power of forecasting the future if you maintain control of your reactions.

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