Investing

My, it’s been a busy 10 days! One for the record books, I’d say, but we have a winner – or do we? Regardless, someone will be sworn in come January. I think.

• November 1, 2020

A couple of weeks ago, I talked about the recent stock splits from Apple and Tesla, and since then, a number of you have asked why there’s no Apple stock in our Envestnet accounts. We all use Apple products on a daily basis, right? Whether an iPhone, iPad, MacBook or even an old iPod, it’s hard to escape Apple. So, why don’t we own a company we all use on a daily basis?

• October 9, 2020

This week, I want to talk about stock splits, as I’ve been getting a few questions about what this means. Apple recently split their stock four-for-one, and Tesla split five-for-one. That means that if you used to own one share of Tesla worth, say, $2,000, you now have five shares worth $400 each. Stock splits certainly aren’t anything new, and were common during the late 1990s tech boom (more on that later). The split does not change the value of Tesla.

• September 3, 2020

This week, we’re going to address the second most popular question I’ve been receiving lately, right behind “what about the election??” That question is: “Should I consider cashing out and staying in cash for a while with what’s on the horizon with…?” Fill in the blank as to what’s causing you anxiety: the election, Covid, the second wave of Covid, Trump, Biden, China, unemployment, no football (for you Big 10 and Pac 12 fans), masks. That should about cover it! Hopefully your blood pressure isn’t up too many points.

• August 20, 2020

For those of you who read last week’s newsletter, we talked about all of our future plans that have been cancelled. This week, I wanted to focus on some of the things we can look forward to as we wait for life to resume some semblance of normalcy. Now, I’m not talking about going to a restaurant, or to see your favorite sports team play, or hopping on a plane to somewhere that isn’t having monsoons! I’m talking about life events that will, one way or another, happen.

• May 23, 2020

When was the last time you reviewed your mortgage? If it’s been a couple of years, it may be worth pulling out those documents and taking a look at your rate, terms and payment. A few things have happened recently that might make this a good time to look into a refinance, especially if you have a strong credit score.

• October 17, 2019

Sometimes the best strategy is to do nothing at all.  

It occurred to me recently as I was thinking about the financial markets that there’s a strong possibility we’re in the same situation we were in between January 2, 2014 and January 4, 2016. During that time, the markets didn’t do much – they went up, but a lot of volatility occurred, and by the fall of 2015, everyone thought for sure we were headed for a recession. The markets were acting funny, and people were convinced that the bull we’d been in since the end of 2009 was officially over.

Then, between January 25, 2016, and October 9, 2019, the Dow Jones Industrial Average gained a little better than 60 percent, not including dividends. Even though most people’s accounts were positive, we were bombarded all the time during that two-year period between ’14 and ’16 that the bull was dead. Many people were still making money. They just weren’t making as much money.

The reality is that we do sometimes go through these periods where the markets gyrate up and down and there’s a bunch of gibberish made up by journalists. But, this volatility is worth looking into, and some of you have decided to make some portfolio adjustments now, while we’re not in a recession. And that’s okay.

What I do find somewhat problematic is that, when the markets go nowhere, the best thing for investors to do might be to sit on your hands. Most of the stocks we own are solid American companies who continue to innovate, and whose worth will be realized by investors. But these will also gyrate back and forth, and we won’t know who the true winners are until we’re out of this market period we’re in.

People often take volatility as a time to make a lot of changes in their investments, and while we are actively monitoring your portfolios, I can assure you – and trust me, in my business, I rarely get to make guarantees – but I can tell you that between now and the next election, you’ll be hearing a few soundbites over and over: Trump. China. Impeach. Brexit. Boeing planes grounded. GM strike. Loss of consumer confidence. Impeach.

In my opinion however, all of that is just noise along the investment path.

Here’s the deal. If you’re going to need your money in, the next 24-36 months or so, please, give us a call and let’s talk.  But, if you’re a longer term investor, it may be best to sit tight and ignore the news. Mentally remind yourself that most of your investments are a bet on the growth and innovation of America, and nothing else. 

When I got into this business in February 1997, the Down Jones Industrial Average was right around 7,000. Currently, it’s around 26,000. I had no idea what the markets would do back then, and while I don’t have a crystal ball to forecast the next 22 years, I do believe that American ingenuity should continue to advance, and that the markets should reflect that ingenuity.

• October 10, 2019

In our office, we see different approaches to money that tend to fall into a few distinct categories. In my business, I often find myself serving as a financial therapist for the families I work with, and that sometimes means figuring out why certain people fall into one of these categories. Finding and addressing the why can also help change any patterns that might be working against you.

• July 25, 2019