It’s staggering when you consider how many people are trying to separate you from your money. Early in the post-Madoff days, I once joked to a colleague at a financial planner’s conference that we should add a fee for our integrity. Imagine the email clients receive at year-end: “I didn’t steal any of your money this year. Attached please find an invoice for my integrity.” Sadly, that gallows humor joke has yet to wear out as the years have passed.
It’s easy to be seduced into going along with the herd when it comes to investments. When the stock market soars, we all get a little more bravado. “There’s nothing like the stock market! It’s so easy to make money! Buy! Buy! Buy!” Similarly, when the stock market is falling, going from downturn to correction to bear, it’s just as easy to switch gears: “The market is falling and is never going to stop! Get me out! Sell! Sell! Sell!” Yes, whiplash is a thing when it comes to investing, but only if you let it be a thing.
I used to teach Economics to evening students. They were mainly adults working full-time jobs and attending college at night. To many of them, the idea of understanding a supply and demand curve, or even a chart of any kind, was terrifying. I always started with the basics, and as we added pieces, I could (almost) literally watch the light bulbs go on. They got it!
When you reach a certain age - and it appears I’ve reached it - you watch your friends age with you to various degrees. Some age remarkably well, while others suffer through serious illnesses. Sadly, some even die. Through it all, I’m constantly reminded of the lessons we share with our clients, who are also aging.
“Sequence of events risk” refers to how markets perform after dollars are invested. The reason why it’s significant is because when a person retires may determine whether their plan is ultimately successful. Unfortunately, you can’t preplan a sequence of events as it relates to investment performance.
If you’re of a certain age, you may recall the famous song by the legendary songwriter Burt Bacharach, titled: “Make it Easy on Yourself.” This isn’t about breaking up (“which is so hard to do”) but about assuming your Social Security number has been hacked. Because there have been so many large-scale hacks, you should assume your Social Security number is on the dark web and available for sale or use by criminals.
The more people I speak to, the more people I find who don’t fully understand the concept of independent living. Considering how much independent living communities spend on advertising, I’m surprised how little is known about their benefits and programs.
If you think you’re the only one whose mood changes if your presidential candidate wins or loses, think again.
We often refer to bonds as the relatively safer side of portfolios. We use bonds in portfolios for many reasons, including reducing volatility (bonds typically do not have the same volatility as stocks), providing income (bonds typically provide more interest income than the dividends provided by equities), and as a reservoir for cash (it is relatively simple to sell short-term bond funds to satisfy both short-term and unexpected cash needs).
As America’s population ages, we’ll likely see more articles about aging in place. Aging in place should be viewed as a dynamic concept, potentially entailing multiple modifications to allow for safe living as physical abilities change.