In Greek mythology, the Sirenusian islands were home to the legendary Sirens. The enchanting songs sung by these mermaid-like creatures enticed sailors to jump off their ships and try to swim to the islands. Unfortunately, the waters proved to be too far for the sailors and they would drown in their efforts.
On his way home from the Trojan wars, Ulysses made a plan to become the first man to hear the beautiful music and live to tell about it. He instructed his crew to plug their ears with beeswax and to tie him to the mast of the ship. They were told not to untie him no matter how hard he pleaded. Just as Ulysses predicted, he heard the singing and demanded that his crew release him. They held up their commitment and did not give in to their leader until after the islands, and the temptation, had passed.
In the world of investing, there are Sirens everywhere. We all know that bear markets have been a regular part of the business cycle and have been followed by recoveries. But in the middle of a bear market, we feel like this is the big one that we will never recover from, and we are tempted to throw away the long-term plan and make an impulsive decision. Other times, the deceptive Sirens sing a song of a new era of never-ending growth, following the herd, or even our own overconfidence.
A good financial advisor can act like the Ulysses’ crew and help you keep the commitments you have made to yourself. He will continue to emphasize the importance of asset allocation, diversification, and rebalancing rather than the calamity of the day. In times like these, having a long-term plan and an advisor to hold you accountable to, that plan can be the difference between staying on the ship and swimming with the fishes.