Or, Alternatively, Fun with Pictures! — You’d never put something in your body before knowing what’s going in, right? Yet, similarly, why do investors sometimes spend huge portions of their precious savings into investment vehicles they know very little about? Simply put, the creativity of marketers has spread beyond the pharmacy. Just like any medication, it’s always wise to know exactly what’s going into your portfolio BEFORE you buy it. Have you heard of NyQuil’s latest miracle sleep aid, ZzzQuil? This achievement of modern medicine is no achievement at all – check out the labels to see why: Non-habit forming – sounds good so far! But what’s in it? Active ingredient: Diphenhydramine HCl 25mg. Sounds sophisticated enough to help me get to …
Money + Emotion = Less Money
Or, Why It’s Never Smart to Trust Blanket Statements, Built upon Emotional Bias, on Investing When it comes to allocating savings (aka Investing), a surprising amount of reward will come from the decisions you don’t make. Not sure what to do? Try doing nothing. In most instances nothing is very much something. Markets should be considered to be one of the most manipulative, conniving and destructive forces in existence – and guess what, the psychological/behavioral interference they create have a direct line to the levers you pull when making important decisions about your money. Needless to say, this is a very dangerous combination. Hence, the title of this post: Money + Emotion = Less Money. Even the smartest participants will inevitably make wrong decisions at the absolute worst times. The best …
Patience
What does a picture of a sunset have to do with investing? Quite a lot, in my book, actually. I’ll quickly elaborate. I live in a very scenic area of Seattle near Alki Beach so I find myself lucky enough to be in place to view a lot of beautiful sunsets. My phone’s full of sunset pictures. Most of them are just average, a few are pretty forgetful but then there is the picture above. It’s an absolute masterpiece. I may never again capture something so amazing. Yet, most importantly, I’ll keep trying. This process is a lot like investing. It has parallels to a tenet I hope my clients are sick of me talking about: staying focused on the long-term. Keeping your portfolio …
War in the Middle East, Crashing Jetliners, Ebola…Oh My!
Last week the world had its fair share of headline-grabbing events. Stocks, measured by the S&P 500 index, were down over 2.5%. Time to lighten up on your equity holdings? Please don’t. It’s a sad truth, but very bad things are going to continue to happen in the world. Every day, pundits will tell us there is a new threat to the global economy. They will tell us how this time it’s different in the Middle East, this time that dictator is a major threat to our livelihood and this time that virus is surely going to wipe out the population. Fear drives viewership and mouse clicks. Sorry, pundits, but the truth is that this time is almost 100% certainly …
The 1%
No, I’m not talking about the 99% versus the 1%. I’m talking about the most powerful force on earth: compound interest. If an investor can earn an extra 1% on their investment portfolio, the effect of compound interest churned over decades reveals a massive windfall. It can be the difference between a comfortable retirement and a nervous retirement. My goal as an advisor is to make sure every client gets that extra one percent. That said, my strategy to get there has nothing to do with making riskier investments or “beating the market.” It has everything to do with fees: my fees and the expense ratios of your investments. “In investing, you get what you don’t pay for.” – …