Broker Check
What to do when you don't know what to do

What to do when you don't know what to do

August 29, 2023

Every person has different circumstances, experiences, and preferences. Every market and economic condition is different from the one before it. With all of this variability, how are we able to make decisions we can be confident in? When circumstances change, how do we keep ourselves from adjusting our plans? Today we're going to talk about discerning when to do something and what to do.

How to make long-term decisions

When starting out on your financial journey, it's tempting to make a choice based on your current circumstances, experiences, and goals. Often, however, the best decision is the one based on a long-term perspective. Your retirement savings and the investments within those/that account has to be viewed through a multidecade lens. If you are saving and investing with a goal in mind that's 30 to 40 years away, then you need to save and invest according to that. If you wanted to save enough for retirement, but do it in the next 5 years, then you might as well put a million dollars in a CD.

A good, long-term plan for saving and investing for your retirement combines a regular contribution based on a thought-out and calculated amount and investments that give you the best chance to grow your assets meaningfully over the next 30 years.

That also means that the decisions you make now will have long-term implications. For example, you want to pay off your debts before you start saving and investing for retirement. I don't disagree with that, but as long as you start saving once your debt is gone. Oftentimes, when we free up money that we haven't been able to spend, we inflate our lifestyle or we redirect our goals. The money that's being used to pay off that debt could very easily move to pay for a large mortgage. You could have a $1,500 rent payment and $1,000 in debt spending per month. Once your debt is gone, a $2,500 mortgage doesn't seem too bad. A smarter choice is to back that down to $2,000 and use the remaining $500 to save and invest for retirement.

How to make decisions when the market is unsure

The current economic environment is weird but familiar. We've had high-inflationary periods before. The 1970s saw record-high inflation. Thankfully, we didn't get to 15% and thankfully, inflation is currently on a downward trajectory. However, ask 10 different people on the street if inflation is still a problem and most of them will say yes. Ask those same 10 people if a recession is likely in the next two years, and I don't know what they'll say. I've seen arguments for both and support for each side.

So, if there's a chance for a recession, but it isn't obvious, what do you do?

Well, if you're investing for the long term and you have at least 15 years until you need that money, then I wouldn't make any changes to your portfolio. It's not necessary. Replacing your bond portfolio with a 2-5 year CD might not be a bad idea though.

If you need the money from your retirement account within the next 15 years, however, making some adjustments may be in your best interest. Now, giving you actual recommendations is difficult as I can't really give blanket recommendations and, it's hard to do. I can't give advice that will be relevant and useful to everyone. I will say this - if you trust your plan and you're confident in your investments, stay put. If you're nervous, take your foot off the gas and be more conservative.


Making long-term decisions is a tough thing to do. It's tough because you don't know how a choice you make today will end up in 30 years. Use historical information as your guide, but don't let it dictate your decisions. Using that guide, implement your risk tolerance, comfort, and goals. If you're not feeling confident in your investments and you need that money sooner rather than later, your feelings in that moment matter. Better to save from losing than lose trying to reach for returns.