Why I don’t send quarterly investment reviews anymore

I used to mail quarterly investment reviews to clients, but I stopped doing that.

There were a number of reasons for making the decision to stop mailing quarterly investment reviews. I’ll be honest, it was a considerable expense and time commitment, that was a small part of the decision. And we weren’t really providing that much additional information to clients that they weren’t already getting from their account statements.

But the real reason that we stopped mailing quarterly investment reviews is that it they are practically useless.

I used to mail quarterly investment reviews because I thought that we were providing a valuable service. But then I realized that what we were actually doing was training clients that whatever happened, or didn’t happen, in the last 90 days has some meaningful importance. And it doesn’t.

Here I was telling people to focus on the long term. And then we would check in on the long-term every quarter. Talk about a mixed message!

See, here’s the thing. For the long term investor, it rarely matters what happened in the markets from quarter to quarter. What matters is what you do about it. If markets swoon, do you panic and bail out, or do you sit tight? Even better, do you correctly view it as an opportunity to acquire more units of world class investments at discounted prices? Investor behaviour is the predominant factor that determines results.

For the short term saver, quarterly investment reviews also are mostly useless as well. If you have a short time horizon it is liquidity that is paramount, not growth, and liquid investments don’t fluctuate.

Quarterly investment reviews would be useful if somehow we could time the markets, but given that clairvoyance is a skill no human possesses, we can safely disregard any thought of that.

The bottom line is that it is not market timing, but rather your time in the markets that counts. So go ahead and recycle those quarterly investment reviews, and let’s remain focused on being invested for the long term.

Brad Brain, CFP, R.F.P., CLU, CH.F.C., FCSI

This article was posted in Smart Money Blog.
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