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Sep 12, 2017

Where am I going? And do I need a map to get there?

With the proliferation of smartphones, the physical road map is all but dead. As a result, for many of you, the idea of planning your road trip and thinking about the path you will ultimately take to get to your destination has become an afterthought.

“My app will tell me the fastest way to go,” you think to yourself. Yet, while this issue of Worth celebrates “destinations,” let’s not forget that life is about the journey. Over the past few years, writing for the magazine, we have been consistent about the need for a plan for the journey, a “map,” if you will.

Unfortunately, at times like these, when the equity markets are marching toward new highs, some investors take their eyes off that map. They begin to question the past, and that can be risky.

Way back in the August–September issue of 2014, we published an article, “How do I invest when markets are at all-time highs?” Today, almost three years later, the markets are again breaking new highs. So, we repeat our question: “What does this do to investor sentiment and behavior?”

Our colleague Svetlana Gherzi, a behavioral finance specialist with UBS’s Chief Investment Office, routinely writes about how our biases creep into our actions and inactions in decision-making. In a recent piece titled “Increase Your Retirement Satisfaction,” she wrote, “Planning and knowing that you are on track not only will provide investors with peace of mind but, as academic studies have shown, it will lead to a better retirement.”1

All too often, investors may become more positive as markets move higher; those investors may then drift from their plan and increase their risk. We have all seen or heard the phrase “Past performance is not a guarantee of future results.” But despite this ubiquitous disclaimer, there are times that some investors can get caught up in the idea that the trend will continue.

Therefore, the importance of comprehensive advice cannot be overstated. Investors with a plan in place, built with their true individual goals and values in mind, are more likely to look past recent history and instead think about their long-term future.

This ability, this focus, has the potential to benefit those investors, their families, the communities they live in and the institutions and causes that are meaningful to them. In Lewis Carroll’s Alice in Wonderland, there is a funny conversation between Alice and the Cheshire Cat which has a line often paraphrased as, If you don’t know where you’re going, any road will take you there.

As you read this issue and think of all the wonderful destinations you can travel to or maybe even retire to, don’t forget your map. It might just allow you to smell a few roses along the way.

1 Gherzi, Svetlana, “Intellectual Capital Blog: Increase your retirement satisfaction,” UBS CIO Wealth Management, Americas, May 30, 2017, p. 1.

Andrew Shantz and Thomas Mantione are Financial Advisors with UBS Financial Services Inc. at 750 Washington Blvd., Stamford, CT 06901. UBS Financial Services Inc. financial advisors engage Worth to feature this article. In providing wealth management services to clients, we offer both investment advisory and brokerage services which are separate and distinct and differ in material ways. For information, including the different laws and contracts that govern, visit ubs.com/workingwithus. The strategies and/or investments referenced may not be suitable for all investors. UBS Financial Services Inc., its affiliates and its employees are not in the business of providing tax or legal advice. Clients should seek advice based on their particular circumstances from an independent tax advisor. The views expressed herein are those of the authors and may not necessarily reflect the views of UBS Financial Services Inc. UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA/SIP

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