As the market has experienced a bit of turbulence in recent days, investors have felt a bit squeamish. Human behavior shows us that when results are not exactly as we anticipate, we question our motives and start examining how the other side is doing, or rather how the active management strategy fares. Unfortunately, their excuses for poor performance can’t replace simple mathematical odds. Larry Swedroe provides a nice analysis of why the odds are just not in their favor ,“It’s not that the game is impossible to win; it’s just that the odds of doing so are so poor that it’s not prudent to try.”
Stick with your long term financial plan, it may get bumpy along the way, the winds may shift, and there is sure to be turbulence. However, just as you wouldn’t anticipate your pilot abandoning the plane he captains, nor should you abandon the plan you have set in place to get you from point A to point B. Fasten your seatbelt and keep your sights set on the horizon ahead.