The Stock Market loves me. The Stock Market loves me not. After all of the loves me, loves me nots are done, all you’re left with is a dead, used-up flower. There are times when people who are invested in the Stock Market feel like all that’s left is a dead flower, and the gyrations from the market leave them with nothing but uncertainty.
Yes, we are told to diversify and think long-term, but that advice often doesn’t help people when their emotions are bottled up and they feel like they are out of control. There are many different seasons in a person’s life, and appropriate diversification for each season is important. If you're buying a bouquet, you know that the flowers that are available in spring are typically not the flowers that will be available in the fall. The flowers change with the seasons, and so do the flowers and bouquets throughout the seasons of your investment life:
Cut flowers only last a few days – This is like money that you need now. That would be your safe money. It should be money that is readily available for opportunities or emergencies.
Annual flowers can bloom all summer - This is like money that you may need in maybe the next 5-10 years. You can pick out blooms all summer until the plant is finally spent.
Perennial flowers can be planted and come back year after year – This is like longer-term money. This is money that you don’t need for 20, 30 years or longer. This money can take the gyrations happening in the Stock Market. It can handle the hot summers and cold winters.
All of these flowers added together become this beautiful bouquet; the bouquet of your investments, and if you are properly diversified, you can rest easy knowing it should all work out. Your long-term money can handle the day-to-day fluctuations because you don’t need to pull cash out of it anytime soon.
Diversification of timing is the important thing. If you have money that is readily available now inside your floral bouquet portfolio, you don’t need to worry because that money is already available. At the same time, your “tomorrow” flowers might not be ready to be placed into a finished bouquet because they have not yet matured. They will be ready down the road when you need them.
So, have some flowers for today, and then plan out your bouquet for different flowers to mature 5, 10, or 30 years from now. If you’re living with a single flower that sometimes loves you and sometimes loves you not, it’s like trying to live off of a used-up, dead flower. Proper diversification should give you a bouquet of flowers that will endure your entire life.
Today may also be a good day to go to the store and pick up a nice bouquet for your spouse, and then see the rates of return that you might be able to receive.
If you’d like to have a serious conversation about how money works with a firm that can look at things a little differently, using flowers and bouquets, then perhaps it’s time for you to schedule your Financialoscopy®.
