Last week SpaceX launched their first Falcon Heavy Rocket, releasing Elon Musk’s cherry-red Roadster to idle through space forever. “Starman” sits in the front seat, taking in the sights of the galaxy, with “DON’T PANIC!” emblazoned on the dash and a copy of HitchHiker’s Guide to the Galaxy stowed in the glove compartment.

That line from Hitchhiker's Guide comforted me during the 1000+ point drop in the stock market last week. As markets fell, I enjoyed a new calm I had never experienced before. During this drop I didn’t panic. But it hasn’t always been that way.

From Stock Market Gambler to Goals-Based Investor

Like many people, I’ve had a bumpy ride in the stock market over the years. In the past I used professional investment managers, scoured personal finance books, tested a number of strategies, and signed up for a number of online services, all while seeking the Holy Grail of “better than market returns.”

All of my attempts fell short and resulted in underachievement and frustration. In hindsight, it was foolish for me to think I was better informed, smarter, or just luckier than the professionals. In reality, I wasn’t investing. I was gambling in the stock market.

Thankfully, my misadventures in stock picking led me to the creation of BrightPlan, a new digital financial advisor.

Our Investment Committee has taught me a lot while building BrightPlan. I’ve been surprised to learn that successful investing is more about behavior management than anything else. If you don’t panic when the market drops, you’re already well ahead of your peers.

BrightPlan encourages good investor behavior with goals-based financial planning. We help you define all your financial goals, create a personalized investment plan to reach them, and stay up-to-date on your progress every step of the way.

Putting Goals to the Test

So what happened to my goals in the recent correction in the market? Well, I too saw losses in my investments. The drawdown was large enough to create some fear, but I am pleased to say, no panic.

Here’s why. I turned my eyes away from the news headlines, the market indexes, and even my account values to look closely at my goals.

My goals were on track before the market correction. They were still on track after. I dug in a little deeper. A week before my retirement goal had a 91% probability of success. After the fall in market value? The probability of success was 89%, still way above the threshold of concern.

What a huge comfort! By showing me all my goals, BrightPlan provides the only point of reference that matters to me during market turbulence.

Now I don’t need to be concerned when the market drops. I don’t ask how my account values changed. There’s just one question I need to answer, “Am I on track to reach my goals?” If a quick glance at BrightPlan tells me I’m still on track to retire when I want, to put my son through college, and to travel next year, none of those other questions really matter.

How We Determine if a Goal is On Track

First, BrightPlan builds an investment plan that is appropriate for your goal’s timeline and your personal risk tolerance. We then factor in your current savings, planned contributions, and the impact of inflation.

Finally, BrightPlan uses the past 26 years of data for global asset classes of stocks and bonds to project a thousand simulated outcomes of your investment plan. All of this number crunching comes together to tell you if you are on track, at risk, or off track to reach a goal.

This analysis can project decades into the future. It takes into account market movements, including experiences like the recent correction (and worse) as well as a few exceptional years like 2017 along the way.

Looking at what happened to my investments and reflecting back over a week, a month or even a year does not tell the full picture. Since my retirement income needs stretch over the next 30 years, a long term view is the only way to think about any short term wild ride in the stock market.

Focusing on my probability of success takes my eyes away from short-term setbacks, and puts them back on the long term trajectory of my goal. A goals-based plan is the seat belt that keeps me secure.

That is why recent events have so little impact on the long term outcome of my goals. I believe BrightPlan can help you to focus on your goals and hold onto those famous words:

DON’T PANIC

Wondering if you’re on track to reach your goals? Start a goals-based financial plan to see.