Remember….The 10-90 Rule

Jeff Karp |

The 10 – 90 Rule

I want to welcome back my blog readers and wish you all a very successful 2014. My question for all to contemplate; if you are going to celebrate your success, how will you know that 2014 was indeed a good year for you?

Let me provide some background to the reason for my question, vague as it may seem. So last Saturday night my wife and I had date night, which for us, can be as simple as cooking dinner together and watching a couple of movies on TV. As I was surfing, I found one of our favorites, Remember the Titans. If you have never seen this movie, it is a classic, feel good story. Interestingly, the second flick, was a movie we had not seen before, We are Marshall, another feel good story; both movies are true stories, both dealt with life events that took real courage to overcome, and both epitomize my message…life is 10% what happens to you and 90% how you react to it.

While our lives will probably never be made into a movie, the 10% events – 90% reaction rule still applies. Looking at the stock market for 2013

  • The 10% – what happens…we started with a near miss on falling off the fiscal cliff, moved to economic uncertainty with the debt ceiling, continued high unemployment and split the country based on election results. As the year went on, the markets behaved unusually, in that they rarely went down and when they did, they rebounded even stronger and finished with the best performance in a long time.
  • The 90% – what you do with it…what was your investment strategy and return expectation going into the year? As the year wore on, did you chase returns, stay with a disciplined process or make adjustments to match the events and/or your investment strategy?

My question is simple; would you call 2013 a successful year for you and your family? The follow-up question might be; do you define success by an increase in account values, by your personal growth or by having sound health/wellness? Did your success happen out of luck or purpose?

I would like to suggest that whether the stock market went up or down was not only unpredictable and uncontrollable but should be only a small component of how anyone measures their success.

So, we are now a month into 2014 and the stock market looks nothing like it did in 2013. The 10% is developing, how are you doing with the 90% you control? Will you be able to recognize and celebrate your success when you achieve it?

And we quote…

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