The Herald Bulletin
---- — This is a very special month for our family.
My wife’s parents, Ed and Marilyn Birt, are celebrating their 50th wedding anniversary this weekend. They have had trials and tribulations, and they've watched their daughter get married and have children of her own. They have done life together. They have done it well and I am very proud of their commitment to one another, to the institution of marriage and their simultaneous involvement in their church and community.
The commitment is far from the norm these days, and we have been honored to watch them dance through life.
Interestingly enough, some people seem to remain more committed to investments than relationships. We have extraordinarily high divorce rates in our society where people walk away from commitments. What’s often not taken into consideration is the financial planning impact of a divorce. If ever one plus one equals more than two, it is in the course of marriage. Dividing assets, pensions, and houses — not to mention the distraction from work and other priorities — makes divorce simply expensive.
We have a series of rules in our office regarding investing. One is that “I married my wife but I only date my stocks.” My marriage has certainly had great days and challenges along the way. In my opinion it is OK for part of the value in our relationship to come from the past 25 years’ worth of mutual experiences, not to mention our children. Besides that I still love her!
Contrast that with stocks, however, and you find a vastly different story. Within any investment in the stock market you find two parts of the equation. There is the company and then there is the underlying stock ownership that’s traded on an exchange.
For years I have watched as people have become enamored with owning stock from a particular company like General Motors, Eli Lilly and Caterpillar. I understand the attraction and the commitment to the company. What baffles me many times is the relationship with the stock.
For years I owned both a Harley Davidson motorcycle and the company stock. When the stock price showed weakness, we parted ways with the investment. I still had my bike, the memories shared with friends and remained a loyal customer for years. The commitment was to the company, not the investment.
Historically speaking, most stock prices have periods of rapid growth at given stages of business development. Our job is to place our commitment in the right place and for the right reason and not get blinded by the love of a product, CEO, or the company itself.
Commitment comes in many forms. Commit to relationships, not investments. It is OK to maintain a relationship through its challenges; you can sell the investment and come back when things are sunnier.
Joseph “Big Joe” Clark, whose column is published Saturdays, is a certified financial planner. He can be reached at email@example.com or 640-1524.