One of the favorite gifts I received last Christmas was The Five-Minute Journal by Alex Ikonn and U. J. Ramdas. With this simple book, I begin and end each day by writing down daily goals, personal affirmations, “amazing things that happened today,” and areas for improvement. This daily five-minute gift to myself has been beneficial on many levels.
The exercise reminds me of one of my favorite high school teachers, a Cuban refugee and Spanish teacher, who encouraged us to write extensive notes as we studied for exams. That way, he said, we would be more likely to recall the material. It worked for me then, and the exercise of writing continues to help me decades later.
Scientific studies confirm that writing thoughts down significantly improves recall and increases the likelihood of accomplishing goals. It also can have a therapeutic effect. Given the documented benefits of journaling, including improved memory and health, New York Times columnist Hayley Phelan has gone so far as to call journaling “essentially a panacea for modern life.”
Written thoughts and goals are beneficial in all aspects of life, not the least being investment and financial planning. That’s why creating a written plan is one of the first tasks we complete with new clients. Clearly defining things like your goals and tolerance for risk, and the responsibilities of the parties involved (i.e. advisor, account custodian, fund managers) are fundamental elements of a good investment policy statement (IPS).
The IPS also includes an asset allocation plan for your portfolio. Your advisor performs periodic reviews of the allocation to help assure your investments are aligned with your plan. It’s also good for you to review the plan at least every few years to update or revise, if needed.
Give Yourself a Five-Minute Gift Each Day
Again, writing things down helps you remember what objectives are most important to you. It provides peace of mind knowing you have a plan. And it increases your chances of achieving your goals.