Earlier this week, I participated in an evening workshop unlike any other. Hosted by the positively brilliant Julie Zuzek (aka The Corporate Yogi), I spent the evening visioneering with like-minded professionals on the topic of setting realistic and inspiring goals for 2014. Julie began the workshop by outlining four categories that our typical “recycled goals” fall into:

1) Other People’s Goals (OPGs …ya, you know me)
Striving to be or accomplish something others expect of you - i.e. “My parents want me to be a doctor so I have to go to med school”

2) Punishing Goals
Restrictive behaviour - i.e. “I’m not eating any sugar so that I can lose weight”

3) Secret No’s
Doing things because you think you have to (wishing you could secretly say no) - i.e. “I’m going to the family reunion…”

4) Should Goals
A result of comparing ourselves to our peers - i.e. “I should be married/have kids/be richer/be healthier/have a better career by now…”

Of the four categories, Should Goals stood out the most for me because I hear them all the time from my friends, family & investors ….
My friends are always talking about how they should be at a certain career or relationship level by now.

My parents think that they should have grandchildren by now...

Most Investors think that they should be beating the benchmark.

me elaborate on that last point – beating benchmarks.

So, which benchmark are you comparing your portfolio to? Is it an index? Is it your neighbours supposed performance? Is it domestic or global? In my humble & honest opinion, I don’t care much for benchmarks. Ya, I said it. While benchmarks provide a conveniently fixed comparison, the variable (being your personal financial goals) differs from client to client.

For example, if the supposed benchmark is 12% but you only need 6% to reach your goals, then how do you really gauge your success when you factor risk & reward into the picture? It’s as if I just told you that the average global weather forecast looks to be 15°C …but if my goal is to walk outside for 10 minutes to get to a meeting expecting 15 degree weather today, I might die due to frost bite without a parka. A general weather forecast doesn’t mean anything to our specific city and weekend plans - to properly plan, we want to know which temperatures to expect, if it’s going to rain, etc - and so the same theory should apply to your personal portfolio.

This is precisely why diversification and asset allocation have proven to be the most effective way to mitigate the many different risks to which your financial assets will be exposed – helping you to plan for your specific goals, needs and objectives.

So, stop shoulding all over yourself and set some realistic goals – you’ll be happier, I promise.

Enjoy the weekend.

D.

Dian Chaaban

Investment & Wealth Advisor

Chaaban Wealth Management Group

416.842.4234