What Are Three Ways That You (And We) Can Stay On Course?
We don’t expect people to fly their own airplanes or take out their kids’ appendixes, and yet we expect them to manage their retirement portfolios. In my careers I’ve done all three, and investing is by far the hardest.”
The Four Pillars of Investing
If we were to picture your retirement financial plan as an airplane flight, your investments are the trade winds carrying you toward your destination. How you invest can mean the difference between your arrival at your desired location … or it can knock you into a tail-spin.
To help you stay on course toward your own goals, we offer the “compass” of a solid investment strategy based on three key points. First, we have a strategy. Second, it’s a strategy based on reason and evidence guided by the durable science of capital markets. Third, it’s grounded in our fiduciary obligation to serve our clients’ highest financial interests. > SEE MORE
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Waypoint Wealth Management
What’s THE Most Important Thing You Can Do To Prepare For Retirement?
I was thinking about this question while reading an article a client sent to me. You can find the write-up here, and it’s a helpful “countdown to retirement” with many tips to consider as you approach retirement. As I looked through the list and thought about covering these issues with our own clients over the years, the question came to mind: what is the most important financial planning step you can take to feel great about your retirement plan?
It’s really a tough question since there are a lot of important issues to consider when “taking the leap” away from a career that you’ve had for so many years. Topics such as health insurance, do you have enough saved, are you invested properly, Social Security timing and others are obviously important to explore. There’s also the softer part of the equation: how will you spend and enjoy your time? Should you still work? How will you miss the social aspect of working and contributing?
But if I were forced to answer, what would I say is the most important question? That’s when I realized it’s the one that I have been recommending most lately when helping someone plan for retirement. It’s this simple question: how much do you need to live on (and how sure are you of that?)? > SEE MORE
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Pete Dixon, CFP®
Partner and Advisor
Reminder: Headlines Are Framed to Frighten – Not Enlighten
If we’ve been doing our job as your fiduciary advisor, you might already be able to guess what our take is on the current market news: Unless your personal goals have changed, stay the course according to your personal plan.
Still, it never hurts to repeat this advice during periodic market downturns. We understand that thinking about scary markets isn’t the same as experiencing them.
So, what’s going on? Why have stock prices suddenly become volatile after such a long, lazy lull, with no obvious calamity to have set off the alarms? While we could point out fears of inflation, interest rate movements, and other potential reasons, we can’t (and no one can) know for sure what exactly moves markets on any given day, and this does not inform us of what will happen next. > SEE MORE
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Waypoint Wealth Management
Our Brain And Our Behavior, Part Two
Little did we know when we started this series last month that it would be announced the Nobel Prize in Economics would go to Richard Thaler. You may not have heard of him, but he is one of three behavioral economists who can claim credit to the award in the last fifteen years. If you remember being automatically enrolled in your company’s 401(k) program instead of signing up on your own, you can give thanks to Richard Thaler. He and many others are helping us to understand why we as humans do the things that we do so that we can better understand ourselves and hopefully improve our financial (and life) habits.
In this second of three articles (you can read the first one here), we’re exploring a few more of the most significant behavioral biases that Richard Thaler and others invested their careers to learn more about: hindsight, loss aversion, mental accounting and outcome bias.
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Waypoint Wealth Management
Our Brain And Our Behavior, Part One
If you have ever watched a youth soccer game, you’ve seen it. Basically, the players observe where everyone is headed (towards the ball), and follow suit. It doesn’t matter where the ball is located on the field or what position the child is in–they’re going after it with all their might! While it’s cute to watch, this cluster of uniformed chaos creates a hive of activity and works against them, making it difficult to move down the field.
In soccer, this behavior becomes less of an issue over time as the player learns the sport. In the world of personal finance, this type of behavior is referred to as herd mentality, a type of “behavioral bias”, and may not go away over time. And unfortunately, your own behavioral biases are often the greatest threat to your financial well-being.
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