My wife and I recently returned from our vacation, where we visited several national parks, including Arches, Canyonlands, Zion, and the Grand Canyon. It was a fantastic trip where we hiked trails, gazed at stars, and waded in rivers. The vistas and canyons were breathtaking.
Most trailheads posted ominous warning signs about running out of water or food, encountering rattlesnakes, or falling into a canyon. The Bright Angel Trail in the Grand Canyon was our most challenging hike. It has rest stops about every 1.5 miles, and most publications recommend hiking to the three-mile rest stop before returning to the canyon’s rim, and that’s what we did. We started our hike at 6:00 in the morning to beat the heat and throng of hikers. When we reached the three-mile point at 8:00, there were two gentlemen in the rest house, one sleeping. His hiking partner said they had been hiking for two days when his friend had stopped eating, and now they were waiting for the rescue helicopter and park rangers. It was only 8:00 in the morning, and it was the third rescue of the day! As my wife and I climbed out of the canyon, we saw the helicopter land on a tiny sliver of rock to rescue the hiker. It was a frightening reminder of how quickly things could change while hiking.
Before our trip, we spent several days and hours planning our hikes to ensure we had enough water, food, and maps. We mapped our routes and picked our trails, and our goal was to hit the trailheads before 6:00 to witness beautiful sunrises, especially at the Windows Arch. Our pre-planning paid dividends and allowed us to enjoy the parks confidently and safely.
There are numerous analogies to hiking and investing; below are a few that may help you with your investment strategies.
- Planning. A financial plan is like a trail map, guiding you to various points, alerting you to trouble, and giving you hope for the future. You ask for problems if you hike in a national park without a trail map, and if you invest without a financial plan, you can suffer a similar fate, though you might not notice your errors until several years later.
- Patience. As we hiked the Bright Angel Trail, we stopped every half mile to drink water and catch our breath. We weren’t in a hurry. Successful investing could take years before you see significant results, especially when the stock market is not cooperating, like this year. It takes patience and wisdom to buy and hold stocks and bonds through challenging markets, but those that do will eventually reap the rewards.
- Goals. Our hikes had specific goals and targets. We knew how many miles to hike on a given day and trail, and when we reached our destination, we turned around and returned to the trailhead. We did not venture off trail or go beyond our stopping point. When you invest, it’s paramount to have goals to know when to stop and enjoy the fruits of your labor. Do you want to retire early or buy a beach house? Do you want to travel the world or read books all day? Whatever your dreams are, write them down and commit them to your plan.
- Risk. As I mentioned, each trail we hiked listed dire warnings. We also knew which routes to avoid, like Angel’s Landing in Zions. Risk and reward are related, and we were compensated with thrilling hikes and beautiful vistas while walking on the sides of cliffs. Stocks are risky investments and can fall without warning. Stocks are posting horrible numbers this year, and most investors are losing money, but you must occasionally endure a few bad years to generate long-term wealth. If you can’t stomach significant losses, reduce or eliminate your equity allocation. Also, if you need your money in one year or less, do not buy stocks; keep your money invested in US T-Bills. Knowing your limits is essential if you want to be a successful investor.
- Review. After each hike, we reviewed our itinerary and made changes based on what we saw. We added new hikes and eliminated others. We decided to visit Dead Horse Point in Utah after looking at our maps and talking to other hikers, and I’m glad we did because it was stunning. Reviewing your accounts and trading history can help you identify opportunities or eliminate risks.
Our national parks are treasures, open to everyone, and offer beauty not found in other parts of the world. To truly enjoy a park visit, you must hike where others don’t, and according to some, 90% of visitors never leave the road. To be a successful investor, you must do what others won’t, like buy stocks as they fall.
“The story is, a man came up to Yosemite, and the ranger was sitting at the front gate, and the man said, “I’ve only got one hour to see Yosemite. If you only had one hour to see Yosemite, what would you do?” And the ranger said, “Well, I’d go right over there, and I’d sit on that rock, and I’d cry.” ~ Dayton Duncan
September 14, 2022
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management, located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so you can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM’s custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets. We have waived our financial planning fee for the remainder of the year, so your cost is $0.00.
Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren’t suitable for every investor. Thelma & Louise was filmed at Dead Horse Point, and the park is used as a stand-in for the Grand Canyon.
 https://talesfromthebackroad.com/90-percent-of-national-park-visitors-never-leave-road/, Mary Horne, 10/1/2017