“If you don’t make a plan, presumably nothing will go wrong.” 

 

This is a maxim that children might come up with when they want to wing something, in the hope that things will just work out, one way or another. Of course, we all know this is naive in most areas of life, but especially where money is concerned. Indeed, having a financial roadmap plays a key role in achieving personal financial well-being.  

 

Over the course of your life, you will have positive and negative experiences. Negative experiences cause flux and uncertainty. Whether it is the death of a spouse, reduced income, a change in health or any one of the potential myriad of unfortunate life events. It is important to ensure that these issues can be addressed within the context of a personal financial plan.  

 

Today’s markets and economic strains are creating uncertainty for many people. Due to the COVID-19 pandemic, global supply chain issues and the conflict in Ukraine, we are dealing with inflation and rising interest rates for the first time in many years (or even decades). As a result, stock markets are capitulating, leading to a feeling of insecurity which many people find unsettling. 

 

Negative returns in an investment portfolio are a normal part of the investing experience and while no one enjoys these events, an investor with a personal  financial plan will not be caught unaware. An investment portfolio could be viewed like a great oak tree. If left alone and unmanaged, it would grow haphazardly and without structure, never reaching its full potential. However, as my arborist has told me many times, if pruned and appropriately fed, a tree will grow strong and balanced, to be enjoyed for a lifetime. While pruning can be challenging and may slow growth in the short term, the tree will be stronger as a result. Your financial well-being is similar. While your portfolio may experience challenges from time to time, being prepared for the inevitable negative events and sticking to the “program” will result in better outcomes and enable your wealth to reach new levels over the long term. 

 

In these uncertain times, having a well-diversified and professionally managed portfolio that is aligned with your personal objectives and tolerance for risk will enhance your probability of financial success. Personal financial planning runs in lockstep with your investment experience. You may still get good results without a financial plan, but don’t mistake luck for skill. Having a roadmap and the ability to manage unintended detours will ensure a successful financial journey.  

 

Perhaps a more accurate mantra might be:

 

“If you fail to plan, you plan to fail.”



Authors

The Winnipeg Team



Dave Holt, CFA
Dave Holt, CFA
Private Wealth Counsellor
James R. Morden, CIM
James R. Morden, CIM
Private Wealth Counsellor
Chad Anderson, CFA
Chad Anderson, CFA
Private Wealth Counsellor
Matt Ward, CFP, CAIA, CIM
Matt Ward, CFP, CAIA, CIM
Private Wealth Counsellor, CRM