Dear Future Self,

Today you have $________ in your investment portfolio.

At some point in the future, the value of your portfolio is going to drop.

You're not going to like it. It's going to make you uncomfortable. You might be tempted to call me and switch to a more conservative asset allocation.

Hold the phone, Future Self.

Remember that you're in this for the long term. There are going to be ups and downs. If you jump in and out of your investments, you risk missing out on longer term growth opportunities. A large percentage of investment losses are caused by either fear or greed. Both of those emotions can trigger poor decision making.

Consider the following: From January 1994 through December 2018, the stock market (as measured by the S&P 500 Index) grew at an average annual rate of 10.6%. Yet investors during this period generally earned considerably less. Why? It's likely that investors jumped in and out of the market, missing opportunities along the way. Don't be that investor.

Think back to when you originally invested. You told yourself that you would be OK with a certain amount of fluctuation in the value of your investments. If you're reading this letter, said fluctuation has probably arrived. Stay the course.

All that said, it's possible that conditions could get to a point where you should actually make a change.

So, Future Self, let's agree to the following:

1. You will adopt a disciplined buy and hold strategy and maintain that strategy during market downswings and upswings.

2. You agree to stay the course and refrain from shifting into more conservative investments as long as the initial portfolio value does not decrease by more than _____% (Let's talk and decide on a reasonable percentage).

3. In the event that the value of your investment portfolio decreases by more than the agreed upon percentage, you may elect to re-evaluate this investment strategy and shift investments as necessary.

4. In the event that you encounter an unanticipated major life event that impacts your financial status, we will re-evaluate this investment strategy and shift investments as necessary. 

All the best,

Current Self
February 2019