You may not realize it, but July 24 is Amelia Earhart Day. July 24 was chosen because it’s the birthday of perhaps the most famous female aviator in history. Earhart’s story ended tragically when she became lost in the Pacific Ocean in 1937 on her voyage around the world, but she is still celebrated for her bravery and pioneer spirit.
As an investor, you can learn a lot from Earhart’s career. Here are a few lessons to consider:
Plan ahead. After a lengthy analysis of Earhart’s final flight, decades after it occurred, a noted aviation expert came to one succinct conclusion: “poor planning, worse execution.” Yet on her successful flights, Earhart was known to have produced, and followed, detailed fight plans. As an investor, you, too, must plan your journey toward your financial goals. First, you need to identify your destination, such as a comfortable retirement. Next, you must create a “map” to reach your goal, in the form of a detailed financial strategy based on an investment portfolio tailored to your risk tolerance and time horizon. And along the way, you must chart your progress via regular reviews of your investments’ performance.
Use the right “tools.” Some sources have noted that, on the fateful flight, Earhart did not appear to fully understand how to use her plane’s direction-finding loop antenna, which at the time was a new technology. If you don’t fully understand the “tools” – that is, the investments – you need to help achieve your goal, you may run into difficulties. Always know exactly what you’re investing in and why you’ve chosen those specific investments. Without this information, you could end up with investments that are either too risky for your comfort or too conservative for your goals.
Follow your vision. On the day they disappeared, Earhart and her navigator, Fred Noonan, were scheduled to land on Howland Island. Unfortunately, it was a cloudy day; some researchers speculate that the clouds’ dark shadows on the ocean surface may have camouflaged Howland and confused the aviators. As an investor, you need a clear view of what you want to accomplish in the long term – and you need to avoid having your vision “clouded over” by short-term events such as price drops and recessions.
Put sufficient “power” in your portfolio. Many aviation scholars and researchers believe Earhart’s plane simply ran out of gas before she could land on Howland Island. Does your portfolio have sufficient “fuel” to help you go the distance? Specifically, do you have the right mix of growth- and incomeoriented vehicles to power you toward college for your kids, a comfortable retirement and your other goals? If you’re not sure, you may went to work with the professional financial advisor to get the assistance you need.
You probably will never try to circumnavigate the globe in a small plane. but if you can emulate the best features of Amelia Earhart – such as her courage, perseverance and faith in the future – while taking steps to help focus on what you can control, your investment journey may be rewarding.