A few YouTube videos caught my eye and suddenly taking over my pool maintenance seemed like a good idea. They make it look so easy. So I take over the pool maintenance and here I am bragging to everyone about how much better I am at taking care of the pool than the professionals. It’s so clear! It’s so clean! Then the pool starts showing error messages – salt too low, clean salt cell – so I go and get chemicals to clear everything up. And the errors remain.
Back to the pool store to get more salt and, low and behold, my salt reading is still too low, chlorine is low, the pool needs phosphates, and now I am totally thrown off. “And by the way, sir, did you remember to clean the filter?” Not to mention, the pool is evaporating like crazy – is it because of the summer heat? Is it the chemicals? Is there a leak? What’s going on? Panic! With my tail between my legs, it’s back to the professionals I go.
Why do I tell this story?
Pool issues you can recover from and in due time the professionals will get everything back in line. Getting an investment portfolio out of whack is just as easy although not always as easy to recover from. A few examples:
The pool servicing company comes once a week. They check the chemicals and systematically keep everything in check. Sometimes on the big down days in the markets, I wonder how one without a disciplined process would manage to sit tight when they see red everywhere – the answer is, a lot of people don’t sit tight. The markets are notorious for doing the opposite of what you might expect them to do, hence the importance of discipline when it comes to investment management and the importance of using professional asset managers with disciplined, time-tested approaches to investing.
The pool professionals also know better than I do that all of the readings aren’t going to be perfect all the time (which makes sense given the variables – the rain, the sun, the time of year, where they are in the treatment process). The same goes for a diversified investment portfolio. It’s not going to work all the time, rather, it will work over time. Easy example – portfolio of all growth stocks looked really nice last year – this year, not so much.
It has been said that if everything in your portfolio is working at once you’re in trouble, because chances are eventually it’s not going to work! Same with the pool – sometimes it’s going to require throwing off the various chemical levels to truly get everything back in check. The professionals understand this, and they understand the correlations between X chemical and Y reading. I, on the other hand, do not.
I did end up buying a pool vacuum to help keep the pool cleaner during the week, so that will remain my contribution. When all is said and done, I’m having the professionals come back to help keep things in line because as I quickly found out – what seemed easy at first led to me figuring out that I have no idea what I am doing.
Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.