A Planner’s Diary in April
April’s Theme: The Power of Inner Confidence
I recently secured something coveted by many outdoor enthusiasts: a permit to hike and camp in Havasupai, where turquoise waterfalls are tucked within the Grand Canyon on the Native land of the Havasupai Tribe. I embarked on this trek earlier this month, and it was my first solo camping trip in years. Reaching Havasu Falls campground required hiking 11 miles into and out of the canyon with a 30+ pound pack, along with a full day in between navigating to various waterfalls: technical climbing, water crossings, and swimming included.
This is the kind of adventure I hunger for, and I got my fill.
Before leaving for the trip (where cell service drops out about an hour’s drive from the canyon trailhead) I was met with a bit of skepticism from a few people in my orbit, all well-intentioned. The reality is that preparation begets confidence. And confidence is what allows us to engage with risk, rather than avoid it. And so, I mapped the terrain, packed intentionally, and understood where the real risks existed (heat, exposure, lack of water sources at certain parts). I brought what I needed to mitigate what I could, and I researched and accepted what risks I couldn’t eliminate.
And it was an amazing time!
Risk and money
Like many things in life, capacity and tolerance for risk taking in investing are built on personal experience and perception. I view investment risk as a three-legged stool: leg one is risk capacity, or how much risk you can take based on your financial situation, time horizon, and goals. Leg two is risk tolerance, or how much risk you’re comfortable taking. And the third leg is perceived risk, meaning how risky something feels, which is often shaped more by emotion, past experiences and subconscious biases, than facts and figures.
Where I see investors get stuck is when one or more of these legs are out of alignment. Someone may have the financial capacity to take on greater risk, but not the comfort to withstand it. Alternatively, they may feel confident taking risk, without fully understanding the exposure they are actually carrying.
There is another dimension of risk that shows up less often in conversation: the risk of not using assets effectively. Over time, I have found that many investors become so focused on accumulating and preserving wealth and struggle to spend it when it counts. Earlier this month, I wrote about one specific example of this in practice; when does it make sense to start distributing from a Roth IRA? Roth assets are often viewed plainly as “last to touch,” when in reality investors deserve bespoke solutions in ensuring their wealth is working for their specific needs.
Now, onto a bit of fun
On the page — I’m currently revisiting The Four Agreements by Don Miguel Ruiz and am beating the drum on one Agreement in particular: always do your best. The concept of doing your best means using the inner and outer resources available to you in any given moment; your best will change when you are rested versus tired, clear-headed versus overwhelmed. I aim to practice what I read and continue to show up for myself in an honest way, and I hope you show yourself the same kindness in work and life.
In sport — I’m a big track and field fan and follow the professional circuit closely. This past month, UK distance runner Josh Kerr won the highly competitive indoor 3,000-meter world title; a meaningful moment after underperforming on the main stage in recent years.
In a YouTube video documenting the hours leading up to his win, he borrowed from an alluring concept: life doesn’t happen to you, it happens for you. Trusting in your process (not someone else’s), drawing on inner confidence, and moving through life with a belief system that success is an inevitability— may we all channel our inner Kerr in pursuit of our dreams and ambitions in this way!
Until next time,
Claire
This material is intended for educational purposes only. You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns. Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost. Advisory Services offered through Avise Financial Cooperative Inc, a Registered Investment Adviser with the SEC. Registration of an investment adviser does not imply a certain level of skill or training.
