How important is balance in your retirement planning?

ABOUT THIS EPISODE

Financial Expert John Browning talks about how critical balance is in your portfolio. Similar to learning to ride a bicycle, losing our balance can bring with it much pain. A regular re-balancing discipline can help you protecy your lifestyle and your future. Learn how to maintain proper balance when you listen to this episode.  

Welcome to the build your life podcastwith John Browning. Build your life as a relaxed and unedited conversation with financialexpert in number one Amazon bestselling author, John Browning Jones, the founder ofGuardian Rock Wealth and serves clients across the United States. John's the author ofthe book build a life, not a portfolio, a guide to your financialfuture based on your personal values, which you can purchase on Amazon, orstay around to the end of today's show and I'll tell you how to geta free copy mailed right to your door. I'm Michael The lawn, your hostfor the next few minutes as we chat with financial expert and business ownerJohn Brownie. Hello, John Browning, welcome again to another great episode ofYour podcast. Well, thanks, it's always good to be on my bioand it's good to have with me.

Yeah, thank you. We hada we had a church picnic this last Sundy because a weather so great here, when I'm sorry, to these two little girls, I mean they werelike four and three or something like that, and they said, Hey, I'vegot a balance bike now and I'm learning to write my bike. andAre you know Balance Bike? It's how you teach gets how to write abike. It doesn't have pedals on it really, so they just kind ofit's like a flint stone bike, right. They're just sitting on it and they'relearning balance, because that's one of the hardest things to learn, right. It's really a great concept. But Balance Bike. But you know howimportant balance is in riding a bike? It's like critical, right, itcritical. Yes, how about when you're planning your retirement and building a portfolio? I've heard for years John, you've gotta you got to have a balancedportfolio when you need to rebalance it on a regular basis, and it justI'm like, okay, what does that mean and how important really is abalanced portfol how important is balance as you're...

...doing financial planning and retirement planning?Critical, okay, just like writing a bike. It is absolutely critical.Okay, the hotel. The difficulty is, when you ride a bike, there'sa significant and immediate consequence for not being in balance. Yes, andsometimes with investing it's actually there's actually a positive reinforcement to being out of balance. Okay, and and's what what I mean by that is you can beout of balance on your portfolio and own a high flying growth stock, youcan name the stock. I'm going to be careful not to name any stockshere because it really super important to me that this is not an investment ofadvice podcast at all. I have to talk to you personally and then Ican give investment advice. But so I...

...don't want to be endorsing any particularstock on this podcast. But say you invested in a particular stock that justshot up, and there are some from even this past year that have shotup hundreds of percent and your portfolio is completely out of balance. HMM,and you feel pretty good about yourself. You're a genius and the in everybull market I run into people who truly believe in they're heart of hearts,deep into their minds, that they have been such an amazing investor because basicallythey pick the high flying stock and they have this huge position in their portfolio, or maybe several huge positions in their portfolio, and that's great until it'snot and the consequence of falling off your bike actually happens and the paint whatwe have, what we know from many, many psychological studies, is that thepain of loss is many times greater...

...than the the pleasure you get fromgains and so there ends up being a lot of heartache because you got outof balance. Okay, now that's interesting because I so I'm I'm in myhead. I'm thinking about writing a bout TJK to write a bike. Theylose balunce like fall, they scrape their arms or whatever. When you losebalance, there can be significant pain. Didn't have to be all them,but there can be. Right. Similarly then, I guess, and ina portfolio, if I lose my balance in that example you just talked about, it could be it could come back to bite me really and cause somecause some significant pain if I don't rebalance. Is that right? That's right.Yep. And you know, sometimes we even run into this with withour clients as well. Well, I didn't do as well as Uncle Bobover here because he had that high flying stock in there. Yeah, butwe have a guardian rock, a very...

...fairly strict cell discipline and rebalancing discipline. So when some people speak a balance or talking about, you know,how much fixed income or bonds you have and how many how much equity exposuredo you have, we view it a bit differently because, as we've talkedabout in the past on this podcast. Fixed Income Ain't what it used tobe right because it's not providing that same level of fixed income and it's alsonot providing the downside protection. So maybe that balance from ten years ago isnot the same as the balance should be going forward, depending on the person. But also there's a strict discipline as to how much of any one positionthat we have in the portfolio gets to be. There's also some discipline thatwe put in there, some rules that we put it into our procedures thatalso don't allow us to under or over...

...allocate a particular sector of the market. So when I mean sector, I mean like technology is one sector,state investing is another sector, consumer staples as another sector. You know,those type of things, and we may we're a little bit more flexible onsectors, but in terms of how large of a position that we will allowin a particular portfolio, in a single position, we're fairly strict on that. And what that does is, as those positions to get larger, weskim a little bit of those games off and you never go broke taking aprofit. Then, when there's always there's always more good, there's more andgood companies to purchase and to be a part of. So to me andany market environment, there's always someplace else...

...that's a great place to put yourmoney and to diversify more and and what that in the long run does isit smooth out your portfolio generally speaking, and you end up with a muchbetter experience for the average person who is looking to build their life based ontheir portfolio. FASCINATE. So you and you said something that was really enteringa rebalancing discipline and I like that and that's one reason I want to encouragepeople to reach out to you, John at Guardian Rock. Well, there'sbecause you have a discipline. You're a third party, you're an outside perspectiveto your clients portfolios, meaning you don't have as much emotional energy tied tothose decisions. That's why you can help make those decisions. Are Inform thosedecisions probably better than those of us who are in it. Because if I'min that skyrocket stock, but I want to stay there because it's growing,and you're going to say that's great, but let's let's take some profit andlet's take some prompt let's do this and...

...and most of us yea quite honestly, we're either, you know, too down or two greedy, and westay in it. And that's why I was interesting the way you phrase that. A rebalancing discipline that is built into the Guardian rock wealth process. Ilove that. That's really cool. So reach out to John Guardian rock wealth. You'll learn about the cost of debt. That's what we talked about on lastepisode. You really need to go back and listen to that out.That was that was fascinating. But talking about balancing and rebouncing, is thereany rule of thumb on rebalancing? John? Once a year, once quarter,once a decade? We we, generally speaking, were because this iswhat we do and we do it every day. We're kind of looking atit's to some degree every day. But I do not recommend that for formost investors. Quarterly is a good rule of thumb. Certainly semi annually andman at least. At least annually look...

...at your portfolios and make sure you'vegot that rebalanced discipline. But generally speaking, you know, once a quarter isa really, really good way to look at it. Yeah, youhave to do anything. It means to be aware of it and are youfollowing your plan? It's another big thing. Another big part of what we dois we develop a road map so that there are specific steps to takealong the way and so you get to your destination and you can get prettyfar off if you wait till the end of the year. Yeah, essentially, right before you said Road Map, the image that came into my mindwas driving a car. I'm going to keep my eyes on the road,but I'm going to do glance down at my spadmen, HMM, but onglance at my river. You mirrors and things right, it's right. Justlike this. I need to glance at my balanced portfolio every quarter or soto make sure it's okay, but my eyes are set on the life I'mliving. That's where it needs to be, right, Yep, eyes forward.Yeah, Nice. For we should do a whole show around automotive analogies. How about that? I can do...

...that all right. We did agreat job today on balance. We started with balance bikes and have ended upwith cars. So who knows where we're going to go on the next episode. But it's always a fun time to talk with you because I learned something, and today learned a little bit about rebalancing and having a discipline to approachwhich you have built into Guardian rock well, and that's just one of the manyways you help your clients. So reach out to John Guardian rockwealthcom,have a conversation with him, request a copy of his number one Amazon bestselling book so he can help you build a life, not a portfolio.Sounds good. We'll see you next time. Anybody. All right. Money reallyis a big part of our lives, and John Browning can help you andyour family learn how to keep money in the proper perspective. It's important, but it's only a tool that could help you build the life that youwant. If you like, John Emilie...

...a free copy of his book builda life, not a portfolio. Go to John's website, Guardian Rock wealthcom, and click the contact US link and send your request. John Will Mella copy of his book right to your door absolutely free. Thanks for listeningto building your life podcast with John Browning. Be Sure to subscribe to this podcastso each new episode will be sent to you automagically when it's released.Have a terrific day,.

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