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

Yeah, thank you. We had a 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 were like four and three or something like that, and they said, Hey, I've got a balance bike now and I'm learning to write my bike. and Are you know Balance Bike? It's how you teach gets how to write a bike. It doesn't have pedals on it really, so they just kind of it's like a flint stone bike, right. They're just sitting on it and they're learning balance, because that's one of the hardest things to learn, right. It's really a great concept. But Balance Bike. But you know how important balance is in riding a bike? It's like critical, right, it critical. 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 balanced portfolio when you need to rebalance it on a regular basis, and it just I'm like, okay, what does that mean and how important really is a balanced 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's a significant and immediate consequence for not being in balance. Yes, and sometimes 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 be out of balance on your portfolio and own a high flying growth stock, you can name the stock. I'm going to be careful not to name any stocks here because it really super important to me that this is not an investment of advice podcast at all. I have to talk to you personally and then I can give investment advice. But so I...

...don't want to be endorsing any particular stock on this podcast. But say you invested in a particular stock that just shot up, and there are some from even this past year that have shot up 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 every bull 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 basically they 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's not and the consequence of falling off your bike actually happens and the paint what we have, what we know from many, many psychological studies, is that the pain of loss is many times greater...

...than the the pleasure you get from gains and so there ends up being a lot of heartache because you got out of balance. Okay, now that's interesting because I so I'm I'm in my head. I'm thinking about writing a bout TJK to write a bike. They lose balunce like fall, they scrape their arms or whatever. When you lose balance, there can be significant pain. Didn't have to be all them, but there can be. Right. Similarly then, I guess, and in a 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 some cause 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 with our clients as well. Well, I didn't do as well as Uncle Bob over here because he had that high flying stock in there. Yeah, but we 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 exposure do you have, we view it a bit differently because, as we've talked about in the past on this podcast. Fixed Income Ain't what it used to be right because it's not providing that same level of fixed income and it's also not providing the downside protection. So maybe that balance from ten years ago is not 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 position that we have in the portfolio gets to be. There's also some discipline that we put in there, some rules that we put it into our procedures that also 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 on sectors, but in terms of how large of a position that we will allow in a particular portfolio, in a single position, we're fairly strict on that. And what that does is, as those positions to get larger, we skim a little bit of those games off and you never go broke taking a profit. Then, when there's always there's always more good, there's more and good companies to purchase and to be a part of. So to me and any market environment, there's always someplace else...

...that's a great place to put your money and to diversify more and and what that in the long run does is it smooth out your portfolio generally speaking, and you end up with a much better experience for the average person who is looking to build their life based on their portfolio. FASCINATE. So you and you said something that was really entering a rebalancing discipline and I like that and that's one reason I want to encourage people to reach out to you, John at Guardian Rock. Well, there's because you have a discipline. You're a third party, you're an outside perspective to your clients portfolios, meaning you don't have as much emotional energy tied to those decisions. That's why you can help make those decisions. Are Inform those decisions probably better than those of us who are in it. Because if I'm in 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 and let'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 we stay 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. I love 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 last episode. You really need to go back and listen to that out. That was that was fascinating. But talking about balancing and rebouncing, is there any rule of thumb on rebalancing? John? Once a year, once quarter, once a decade? We we, generally speaking, were because this is what we do and we do it every day. We're kind of looking at it's to some degree every day. But I do not recommend that for for most investors. Quarterly is a good rule of thumb. Certainly semi annually and man at least. At least annually look...

...at your portfolios and make sure you've got that rebalanced discipline. But generally speaking, you know, once a quarter is a really, really good way to look at it. Yeah, you have to do anything. It means to be aware of it and are you following your plan? It's another big thing. Another big part of what we do is we develop a road map so that there are specific steps to take along the way and so you get to your destination and you can get pretty far off if you wait till the end of the year. Yeah, essentially, right before you said Road Map, the image that came into my mind was 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 on glance at my river. You mirrors and things right, it's right. Just like this. I need to glance at my balanced portfolio every quarter or so to make sure it's okay, but my eyes are set on the life I'm living. 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 a great job today on balance. We started with balance bikes and have ended up with 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 approach which you have built into Guardian rock well, and that's just one of the many ways you help your clients. So reach out to John Guardian rockwealthcom, have a conversation with him, request a copy of his number one Amazon best selling book so he can help you build a life, not a portfolio. Sounds good. We'll see you next time. Anybody. All right. Money really is a big part of our lives, and John Browning can help you and your 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 you want. If you like, John Emilie...

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

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