Tag: Fishing

My Week at a Dude Ranch

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Over the years, my family and I vacationed at Wind River Ranch – a Christian dude ranch in Estes Park, Colorado. Wind River Ranch rests in a valley between Longs Peak and Twin Sisters, a magical place. I rode horses, hiked, and fished while acting like a cowboy. Giddy up!

While riding horses in the Rocky Mountain National Park, getting lost in my thoughts was easy as I meandered along the trails. I had to remind myself I was sitting on a thousand-pound animal on a narrow path and had to remain focused on where I was leading the horse. I looked forward so I wouldn’t run into a tree or fall off a ledge. Riding a horse while looking over your shoulder doesn’t do much, and horses aren’t fond of walking backward. So, too, with investing. It is imperative to keep progressing toward your financial goals. Looking back and thinking about what could have happened is a waste of time. Instead, keep advancing and adjust your goals as needed.

Hiking in the Rocky Mountain National Park is breathtaking. A favorite hike is Mills Lake, a beautiful climb along Glacier Creek, and the lake looked like a giant swimming pool on a windless day. Another fun one is Twin Sisters. The elevation at the peak is 11,427 feet. It’s not a fourteener, but still challenging. I planned my course for both routes and ensured I had my supplies, especially my bear bell. When investing, it’s essential to prepare for all conditions. A financial plan and investment strategy can help guide you to your financial destination, and a good asset allocation policy can help you weather economic storms. Like hiking, stopping periodically to confirm you’re still moving toward your goals is critical.  

Fly fishing in the Rockies is about as good as it gets. Fishing in the park’s rivers, streams, and lakes is part art and science, and I used several fly patterns, and all worked well at one point or another. However, not every cast caught a trout, and I spent a fair amount of time casting and waiting. Fly fishing demands patience, like investing. Give your investments time to grow or recover, and don’t be in a hurry to make significant changes.

Whether hiking, riding, or fishing, all three require a plan, equipment, and constant monitoring to succeed. Investing also involves these attributes; the more you plan, the better your investment results will be.

Be still, and know that I am God.  ~ Psalm 46:10

April 7, 2023

Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management 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 our clients 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 your asset level.

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. Prices and yields are for today only and are subject to change without notice.

Match the Hatch.

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Astute fly fishermen and women match their fly to the insect to catch more fish and this is referred to as “match the hatch.”  For example, if you’re fishing in area with grasshoppers, you want a fly that looks like a grasshopper.  Entomology is the study of insects so a basic understanding of it will help fly fishermen and women have a better experience when they’re on the water.

Investors should try to match their hatch as well.  An investor who wants to improve their odds for investment success should match their hopes, dreams and fears to their investment portfolio.

Completing a financial plan is one way to increase your odds of financial success.  Your plan will assist you in identifying and quantifying your financial goals.  The discovery period for your financial plan is just as important as the finished product.  The more detailed and specific your goals and financial information, the better your financial plan will be.  Of course, your plan will only be as good as the data you put into it so spend some time in complying your information.

Knowing your risk tolerance is another important factor for your investment success.  However, trying to understand how much risk you’re willing to take is challenging.  During a rising market investors are willing to take on a high degree of risk.   When markets fall, investors are risk averse and aren’t comfortable owning risk assets.   How much risk can you handle?  One benchmark is to review your trading habits during the Great Recession of 2008.  During the 2008 market meltdown, did you hold on to your investments or did you sell your holdings?  If you didn’t sell your investments, you’re probably a growth oriented investor willing to withstand a high level of risk.  If you sold your investments, you’re probably a conservative investor.   In addition to your actions, you can also complete a risk tolerance questionnaire or two.  Riskalyze and FinaMetrica are two services that can help you identify your risk tolerance level.

Once you’ve identified your financial goals and risk tolerance, the next step is to make sure your investments are aligned with these metrics.   If your investments are united with your financial goals and risk level, then you’re more likely to stay invested through multiple market cycles.

What should you do if your financial plan, risk tolerance and investments are out of whack?  If your plan isn’t in sync, then changes must be made.  Your investment portfolio will need to be rebalanced and aligned to your financial plan and investment goals.  The portfolio adjustment might be a minor tweak or a major overhaul.   If your plan calls for a major overhaul, pay attention to taxes, fees or penalties before you make any changes.

Catching a fish with the right fly is a thrilling experience.  However, if you’re fishing with the wrong fly, you need to change it as soon as possible to the correct fly so you can catch more fish.

There is no greater fan of fly fishing than the worm. ~ Patrick F. McManus

Bill Parrott is the President and CEO of Parrott Wealth Management.  For more information on financial planning and investment management, please visit www.parrottwealth.

October 13, 2017

 

 

Fishing from my Driveway.

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A boat resting on a driveway is safe from the wrath of Neptune and Poseidon.  It can sit peacefully on concrete protected from waves, tides and rocks.  However, a boat isn’t made to sit idle on a driveway; it’s made for the high seas.  Similarly, fishing from a driveway doesn’t work either.   The boat and the fisherman need to be on the water.

A boat on the water is exposed to more risk, as is the fisherman.   The risks increase the further the boat travels from shore.   The waves get bigger, the wind howls harder but the payoff is greater.  The reward of catching an enormous fish is worth the effort.

Investing carries many levels of risk and safety.  It’s possible to never leave shore and invest for safety and guarantees.  If you’re concerned about losing money, you can invest your money in a certificate of deposit or U.S. Treasury Bill.  These two investments will guarantee a rate of return if held to maturity.  They’ll also guarantee a low rate of return as both yield about 1%.   These two items may work in the short term but won’t hold water as long-term investments.

To create wealth an investor needs to have exposure to risk assets like stocks.  Stocks fluctuate like a boat on the water but if held for the long term they will treat you well.  In the short term, stocks rise and fall with much fanfare.  When stocks fall, the media will want to know if this is the beginning of the end.  It may feel like the end of times if you’ve lived through the corrections of 1987, 2000 or 2008.  Despite the previous storms, the stock market recovered and sailed to all-time highs.  Historically stocks have averaged a 10% annual return despite the drops.

Set a course for adventure and invest to achieve your goals.  Diversify your assets across stocks, bonds and cash so you can keep your portfolio afloat!

A ship in harbor is safe — but that is not what ships are built for.” ~ John A. Shedd.

And when he got into the boat, his disciples followed him. ~ Matthew 8:23.

Bill Parrott is the President and CEO of Parrott Wealth Management.  For information on financial planning and investment management, please visit www.parrottwealth.com

June 10, 2017