Many people say they want to accomplish long-term financial goals but when it comes to actually making tradeoffs and taking action steps they falter. There is a disconnect between what they say they believe and what they do.
The sheer magnitude of largely short-term oriented financial news (and I use this term loosely) is sometimes difficult to ignore for many investors. Perhaps a personal example would help. I am a Roman Catholic. Catholicism is a complex faith with centuries of thought content. This complexity provides ample avenues for all types of “news” both positive and negative. By its very nature, however, Catholicism is long-term oriented. It is focused not just on today but also the future yet to come. This is very similar to investing. If we say we believe in long-term, but actually are trading stocks for short-term purposes (or speculating about the direction of the market in the short term), then our actions conflict with our beliefs. This is exactly where we find many people today.
Most investors say that they want to accomplish something financially in the medium to long-term. Where the belief separates however, is when specific choices are required. Perhaps saving more instead of spending more is where investors become weak in the knees. So, is it accomplishing long-term goals or reacting to the news? This decision can make all the difference.