Alice came to the fork in the road.
“Which road do I take?” she asked.
“Where do you want to go?” responded the Cheshire cat.
“I don’t know,” Alice answered.
“Then,” said the cat, “it doesn’t matter.
I came across this quote from Alice in Wonderland last week as I was working on our company’s business plan. I think it does a great job of illustrating a problem we all have from time to time. When we try to make decisions about what to do next in our business, our personal or financial lives, we lose sight of how important our goals are in determining our next steps.
The past 24 months have emphasized how critical it is to have financial goals and a plan in place to reach them. People who set goals and monitor their progress against those goals have been much calmer and able to handle the day-to-day market volatility we’ve experienced.
People who are reluctant to set goals and establish plans are more battered by their emotions and vulnerable to the daily investment noise that encourages you to “Do something!” During the early part of this year the urge to bail out of stocks was strong. With the recovery we’ve experienced since March, some are now thinking they should be more aggressive while others are worried about another drop after the Dow Jones Industrial average reached 10,000. The answer is the market movements don’t matter. What is important is your own specific financial situation, you personal goals, and your plans to reach them.
The happiest and most successful people I’ve met throughout my life have been people who have goals and work to achieve them. Goals give us direction and provide a positive focus when everything seems uncertain. If you aren’t setting goals for yourself, you are missing out on a great opportunity to lead a happier life.