Kick Goals Fatigue to the Curb With 5 Simple Tips
January is a popular time to set big goals. “This year I want to… This year will finally be the year I… This is my year…
The year you what?
Write a book?
Start your business?
No matter what your personal goal is, and no matter how much enthusiasm you have for it on January 1st, fatigue ultimately sets in. Only a short time into the new year, I’ll bet your goal that had you jumping out of bed a few weeks ago, now feels like a lot of work. Combined with slow progress, it’s tempting to give up or adjust your trajectory. Do not give up just because it feels too hard before you read on.
Why Many Goals Fail and What You Can Do to Avoid It
For most people, the issue isn’t that the goal is too big, it’s that the path forward is cloudy. They set the goal, often verbally or sometimes in a journal and then go for it. The problem is that the “going for it” isn’t a plan and ends up looking a lot like sitting on the stationary bike at the gym. You clock up miles but don’t move and inch.
A Map is Key to Beat Goals Fatigue and Create Success
A Goals Map is essentially your stairway from street level to the top of the building. It puts on paper not only your BIG goal but also creates a tangible path forward. Moreover, it gives you interim milestones and successes to celebrate along the way. The celebration is essential to keep up your momentum and motivation – after all, the top of that building is a long climb.
What is a Goals Map?
A Goals Map is a lot like any other map. It takes you from point A to point Z and helps you to plot your stops along the way. On a long road trip, there are often detours that open up new pathways and sustain the adventure. With a Goals Map, you can incorporate those turn offs and visualize how they will help you get to your final destination too.
At the simplest level, when building your Goals Map, you start with a goal in mind and fill in the boxes from your starting point to the end goal. Think of it not as a stone tablet or work plan but more like a treasure map. Once you reach each spot on the map, it makes the step to the very next box clear.
The Y-Axis, (Vertical) is your path to your primary goal.
The X-Axis (Horizontal) is where you can further flesh out steps from your primary goal (Y) and set additional goals that are related your original path.
Here’s a sample for someone who wants to turn their side hustle into a full-time business. You’ll notice that not every single step is represented at a granular level, but the map outlines a clear path forward.
5 Hot Tips for Using Your Goals Map to Kick Goals Fatigue to the Curb
1. Write It Down
Do not create the goals map in your head. Grab a notebook or your favorite online app and sketch it out. When you write down your goals, studies have shown that you increase your chance of reaching them.
2. Focus on Your Next Step
It can be tough to know all the steps between where you are now and your goal. When you are building your goals map, in each box ask yourself, “What’s my next logical step?” and don’t worry about four steps from here.
3. Build It From the Top Down or the Bottom Up
A trick you may want to use is to build your map from the top down. Ask yourself, “What needs to happen right before this is possible?” Decide what works for you – top down or bottom up and don’t worry about the way most people do it.
4. Post It
Now that you have your Goals Map put it somewhere you can see it and refer to it. There’s no point in writing it out if you never look at it again. Post it somewhere that you can refer to it and be reminded of where you are in the process.
5. Color It in and Check It Off
It’s powerful to see your progress and easy to feel like you aren’t making any. Use your map to help visualize progress. When you’ve completed a step, color it, check it off or put a pin in it. Equally important, don’t forget to celebrate.
Goals fatigue can stop you from creating the life and work that you most want. Instead of giving up and getting in bed or waiting for December for talk of “next year,” try a Goals Map. It works.
Building a Better Index With Strategic Beta
Written by: Yazann Romahi, Chief Investment Officer of Quantitative Beta Strategies and Lead Portfolio Manager of JPMorgan Diversified Return International Equity ETF at J.P. Morgan Asset Management
With the global economy warming up, but political uncertainty remaining a constant, it’s more important than ever for investors to position their global portfolios to navigate long-term market volatility. That’s where the power of diversification comes in, says Yazann Romahi, Chief Investment Officer of Quantitative Beta Strategies at J.P. Morgan Asset Management and Lead Portfolio Manager of JPMorgan Diversified Return International Equity ETF (JPIN).
Not all diversified portfolios are alike
In their search for diversification, many investors turn to passive index ETFs, which track a market cap-weighted index. But these funds aren’t always the most effective way to steer a steady course through volatile markets—and there are two key reasons why.
First, traditional market cap-weighted indices are actually less diversified than investors may think. For example, in the S&P 500, the top 10% of stocks account for half the volatility of the index. Within sectors, while you might assume that sector risk is distributed across the ten major sectors fairly evenly, it is a surprise to many that at any point in time, one sector can be as high as 50% of the risk.
Second, cap-weighted indices come with some inherent weaknesses, including exposure to unrewarded risk concentrations and overvalued securities. So, while these indices provide investors with exposure to the equity risk premium and long-term capital growth, as is the case with any other investment, investors can also experience painful downturns, which increase volatility and reduce long-term performance. For investors seeking equity exposure with broader diversification—and potentially lower volatility—strategic beta indices may be better positioned to deliver the goods.
How do we define strategic beta?
Strategic beta refers to a growing group of indices and the investment products that track them. Most of these indices ultimately aim to enhance returns or reduce risk relative to a traditional market cap-weighted benchmark.
Building on decades of proven research and insights, J.P. Morgan’s strategic beta ETFs track diversified factor indices designed to capture most of the market upside, while providing less volatility in down markets compared to a market cap-weighted index. Rather than constructing an index based on market capitalization—with the largest regions, sectors and companies representing the largest portion of the index—our strategic beta indices aim to allocate based on maximizing diversification along every dimension—sectors, regions and factors. The index therefore seeks to improve risk-adjusted returns by tackling the overexposure to risk concentrations and overvalued securities that come as part of the package with traditional passive index investing.
So, how do you build a better index?
As one of just a few ETF providers that combine alternatively-weighted and factor-oriented indices, our disciplined index methodology is designed to target better risk-adjusted returns through a two-step process.
First, we seek to maximize diversification across the risk dimension. This essentially means that we look to ensure risk is more evenly spread across regions and sectors, which balances the index’s inherent concentrations. As uncontrolled risk concentrations are unlikely to be rewarded over the longer term, we believe investors should strive for maximum diversification when constructing a core equity exposure.
Second, we seek to maximize diversification across the return dimension. Research shows that there are a number of sources of equity returns beyond growth itself. These include risk exposures such as value, size, momentum and quality (or low volatility). When creating a diversified factor index in partnership with FTSE Russell, we seek to build up the constituents with exposure to these factors. We therefore select securities through a bottom-up stock filter, scoring each company based on a combination of these return factors to determine whether it is included in the index. These factors provide access to a broader, more diversifying source of equity returns as they inherently deliver low correlation to one another, providing diversification in the return dimension.
So, whereas traditional passive indices allow market cap to dictate allocations, the diversified factor index seeks to ensure that we minimize concentration to any source of risk—whether it be region, sector or source of return.
How are you currently weighted versus the market cap-weighted index, and how have your under- and over-weights enhanced risk-return profiles?
Crucially, our weightings don’t reflect specific views on sectors or regions and are instead, by design, the point of maximal diversification. It is important to remember that market cap-weighted indices typically carry a lot of concentration risk—for example, at various points in time, a single sector can explain half the risk of the index when left unmanaged. At the moment, three sectors explain two-thirds of the risk of the FTSE Developed ex-NA Index—these being financials, consumer goods and industrials. In contrast, the FTSE Developed ex-NA Diversified Factor Index—or strategic beta index, which JPMorgan Diversified Return International Equity ETF (JPIN) tracks—is explicitly designed to maintain balance and therefore these sector allocations range from 8% to 12%. In the short term, any concentrated portfolio can of course outperform a more diversified one, if the concentrated bet paid off.
Investing wholly in a single stock may outperform over short-term periods. At other times, it may significantly underperform an index. However, it is well understood that an investor is better off diversifying across lots of stocks for better risk-adjusted long-term gains. The same applies here. From a pure return perspective, if financials, for example, account for half of a cap-weighted index in terms of market cap and have a strong run over the short term, of course, this index would outperform over this period. Over the long run, however, it is fairly uncontroversial to suggest that the more broadly diversified index could achieve better risk-adjusted returns.
Seeking a smoother ride in international equity markets?
For investors targeting enhanced diversification through a core international equity portfolio, JPMorgan Diversified Return International Equity ETF (JPIN) targets lower volatility by tracking an index that more evenly distributes risk, enabling them to get invested—and stay invested.
Learn more about JPIN and J.P. Morgan’s suite of strategic beta ETFs here.
Call 1-844-4JPM-ETF or visit www.jpmorganetfs.com to obtain a prospectus. Carefully consider the investment objectives and risks as well as charges and expenses of the ETF before investing. The summary and full prospectuses contain this and other information about the ETF. Read them carefully before investing.
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