Ask a group of people to raise their hand if they think they are a below average driver. Hardly anyone raises their hand when asked that question because most people think everyone ELSE has the problem. But by definition, half of the drivers in America are below average!

I tell people that behavior is the biggest determinant as to whether or not they will be successful as an investor. Truly, in my opinion, behavior is the single most important thing in any endeavor. Most people agree with me. They agree that personal behavior will sidetrack an individual over their investing lifetime quicker and more often than any outside influence. Yep. Everyone agrees…but everyone thinks THE OTHER GUY HAS THE BEHAVIOR PROBLEM! I have clients, friends and family all tell me the same thing, which is that they won’t panic in a stock market downturn. Maybe…but what about during a stock rally???

If you’ve ever asked anyone if the market is too high, or if you’ve simply thought to yourself that maybe you will hold cash right now because you are waiting for the “crash”, well…you have a behavior problem. Sure it may work out for you. I’ve heard clients tell me the stories of pulling their money out right before 2008 because it “felt right”. Then they didn’t get the money back in until 2012. This doesn’t need to be the case! You don’t need gut feelings. You don’t need to try and tell the future or to time the market or to wait for a crash.

Why not?

For starters, I would ask you, “Which market are you talking about”? The Dow Jones is one index. What about small companies, and emerging markets, and international small companies and international large companies, and micro caps and on and on…there are SEVERAL markets and they aren’t all correlated with each other. They don’t all move in lock step with each other.

But even if we did stick with the Dow Jones because it’s what most of you see on the news, the Dow Industrials at the time of this writing is pushing 20,000. Let that hit you for a minute: the Dow at 20,000!!!! How can this market NOT be too high? 20,000???? That’s insane! You should wait until it drops again to whatever point makes you happy and then invest. Except that’s not investing. That’s gambling.

Read that again: Investing is different than gambling. If you want to be a trader and try and time markets and do all that fun stuff, then by all means go ahead and speculate and gamble away. But if you are investing your money, then you should have a long term view. I’d say a minimal time frame is 10 years. Do you know what the Dow will be at in 10 years? Me either. But if you believe the “experts” who tell you stocks get you 10% a year (in a perfect linear fashion with no ups and downs…yes I am laughing), then the Dow will be over 50,000 points. Yep. Check the math on your own. In 10 years, assuming 10% a year in return, the Dow will be at 50,000. In that context does 20,000 sound too high??? NOPE! In ten years, you will want to wait until it crashes to 20,000 so you can invest and reap the rewards! Except, why try and time THAT? Just invest now. By the way, I know you. I know you better than you think I do…because you are already wondering what the Dow would be at if it doesn’t earn 10%. Well here’s an answer: let’s say it only earns 6% over the next 10 years…that puts the Dow at over 36,000.

You want to really lose your mind? Dow at 66,000. That happens in 20 years at 6%.

Is the market too high right now? NOPE. It’s always a good time to invest. Always. But only if you are investing and not trading and only if you will endure the movements of the market (in other words: BEHAVE).

What to ask yourself about your investing behavior:

• Do you try and speculate in your accounts? Have you wanted to but just haven’t yet?

• Do you worry when the markets are too high? Too low? Are you ever happy J?

• Did you know that the Dow Jones is made up of exactly 30 companies and that the companies have changed over the years? Did you just Google that to check up on me?

• Do you misbehave in other areas of life like health and nutrition? Do you think that behavior is different or can be compartmentalized?

• Is it time to really get serious about your finances? Maybe it’s not as easy as it looks?

Dow Jones Industrial Average is a widely used indicator of the overall condition of the stock market, a price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but also includes financial, leisure and other service-oriented firms. Indices are unmanaged, and one cannot invest directly in an index. Past performance is not a guarantee of future results. Data and rates used were indicative of market conditions as of the date shown. Opinions, estimates, forecasts and statements of financial market trends are based on current market conditions and are subject to change without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and do not constitute a solicitation, offer, or recommendation to purchase or sell a security. Past performance is not a guarantee of future results.