Brian Wallheimer at Financial Planning collected analogies advisers use to simplify planning for clients, because jargon loses people and a good comparison keeps them in the conversation. Mine was the thermostat.
Managing your portfolio is like managing the temperature in your house. You do not adjust the thermostat every time it is cold outside. You set it once to match what you need, check it seasonally, and adjust when your life changes, not because the market changed, but because you did.
I told him about a client in early 2022 who called ready to go all cash after a rough stretch. I asked him three questions. Had his spending changed? Had his timeline changed? Had his goals changed? The answer to all three was no. We went back to the thermostat. He stayed invested. By the end of the year he would have been worse off in cash, and by the following year the difference was significant.
The analogy works because it separates the two things people confuse. The weather is the market: unpredictable, uncontrollable, and not a reason to touch the dial. The setting is the plan: chosen deliberately for your household, and changed only when the household changes. A new job, a retirement date, a child, a health event, an inheritance. Those are reasons to adjust. A headline is not.
Most of the value I add in a bad year is talking someone out of resetting the thermostat because it snowed.
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