Imagine you’re deep in the woods with your two best buds, experiencing that camping trip you always dreamed.

One bright and dewy morning, the three of you decide to take a hike along a seldom used trail.

About an hour into your trek, you hear the nearby foliage begin to rustle. Obviously, it’s one of nature’s creatures, but which one? “Let’s find out,” says your curious friend.

“Let’s not,” says your more cautious companion. Curiosity wins and the trio quietly tip-toe towards the flapping leaves.

Alas, your scent travels faster than you and the bush stops moving. So you stop.

It’s too late. Rising from the camouflage of the forest stands a towering grizzly bear. He’s obviously very hungry and he looks at the small group not as an assembly of itinerate backpackers, but as breakfast.

“Run!” yells the cautious one, with just a hint of righteous indignation. “Run!” screams the now not-so-curious one. “I’m running as fast as I can!” you gasp at full speed, without even considering looking behind you.

But, how fast, exactly do you need to run? Some might answer “faster than the bear.” Those unfortunate folks are destined to become ursine banquet because, as we all know, no one can run faster than a hungry grizzly bear.

Still others might guess, “You need to run the fastest.” Again, the extra burst of energy will only cause them to tire more quickly; thus, slowing them down and, again, meeting the same fate as the others.

The correct answer to the question “How fast do you need to run?” is, as all the smart readers out there in readerland will proudly proclaim, “Faster than the slowest other person.”

Once the bear catches the slowest hiker, the other two can slow to a brisk walk and still get away.

There’s more to this lesson than woodland safety. It also reveals an important mistake made by retirement savers (see, “A Better Way to Set Retirement Goals,” FiduciaryNews.com, July 25, 2017).

Indeed, this is the most common mistake made by all investors. It’s not all their fault, though. You may even say they might be victims of messieurs Nielsen and Arbitron as well as perhaps more than a few behavioral psychologists.

Each year, each quarter, each week, each day, heck, for those with nothing better to do, each minute, we’re constantly reminded by the financial (and mainstream) media what “the market” is doing.

This narrow view of the investment arena has become the go-to heuristic for naïve investors to measure their relative performance. It’s the timberland equivalent of saying “I need to always run faster than the bear.”

Consider what’s behind that statement. Returning to our original metaphor, it has the effect of shifting our objective from “escaping the bear’s voracious jaws” to “running faster than the bear.” These aims may seem synonymous, but they aren’t. These are “forever” goals.

In other words, they continue until they are achieved. Sure, while you’re running faster than the bear, you will appear to achieve the “escaping” goal. Alas, you can’t always run faster than the bear. And you only need miss that goal once to become the bear’s breakfast.

The only way to complete the “escaping” goal is to make sure the bear is no longer hungry. That means running until the bear finds something else to eat. If the only other thing to eat is another hiker, then you only need to run faster than that other hiker.

Correctly restated, your goal can be reduced to “run faster than the slowest hiker.”

In the retirement realm, investments are often couched in terms of “the market” (historically the S&P 500). All statistics used derive from these market averages.

Benchmarks, now immortalized by SEC prospectus requirements for all investment companies (i.e., all mutual funds must compare themselves to an index), have evolved from personal wealth goals to industry standard indices.

People are now too busy measuring themselves against some arbitrary general index rather than against their own needs and wants.

How dangerous is this? The S&P 500, as of this writing, is up about 10% this year. Many analysts would be too surprised if we see a sudden correction of as much as 20%.

If someone is close to retirement and they only need to earn 5% this year to hit their goal, why would they want to risk that 20% just to squeeze and additional 5% above their need?

Yet, the constant barrage of reporting the return of the “market averages” overcomes those too week to maintain a stoic investment discipline. These are the folks continually selling low and buying high, forever chasing the latest investment trend, forever believing the purpose of their lives is to run faster than the bear.

Our lifetime goals can’t be measured in bank accounts of stock portfolios. They are instead measured by family, friends, and those little (and not-so little) accomplishments we leave behind us. No one wants his gravestone to read “Here Lies Me – I Beat the S&P 500.”

Instant Insights /

Grizzlies, goals & gravestones -- One common investor mistake: Carosa

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