10 Ways To Not Sweat The Small Stuff (With Investing)
If you pay attention to the news, you can’t help but hear about how volatility has increased recently. Overall, market temperatures have been so mild for so long, many newer investors have yet to weather a perfect market storm. Even if you have, you may have forgotten how challenging those times can be.
This worries us. Experience and evidence alike show us how severely bear markets test investor resolve. We’ve also seen how damaging it can be to act on rash fear rather than rational resolve during market downturns.
Let’s be clear – we’re not saying that we think markets are about to go south. But we do think that investors should be as informed and educated as possible. So just as we prepare for other emergencies in life, here are 10 timely actions you can take when financial markets are tanking … and, frankly, even when they’re not. > SEE MORE
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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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Waypoint Wealth Management
Can Budgeting Actually Be Rewarding?
Many people view budgeting as a never-ending exercise in self-denial, characterized primarily by the word “no”. But it doesn’t have to be that way.
Instead, think about budgeting as the connective tissue between where your money is going this week, this month or even this year and the life in retirement you’re working toward. When seen in that light, budgeting can be remade into an affirmative tool, an integral part of a fruitful and constructive financial rhythm aligned with your values and goals. And regardless of where you are financially, consider this: Staying within the reasonable guidelines you’ve set with your budget is like saying “yes” to a fulfilling retirement.
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Waypoint Wealth Management
Should We Track an “Index”, or Follow the Evidence?
Legend has it, a pharmacist named John Pemberton was searching for a headache cure when he tried blending Coca leaves with Cola nuts. Who knew his recipe was destined to become such a success, even if Coca-Cola® never did become the medicine Pemberton had in mind?
In similar vein, when Charles Dow launched the Dow Jones Industrial Average (the Dow), his aim was to better assess stock prices and market trends, hoping to determine when the market’s tides had turned by measuring the equivalent of its incoming and outgoing “waves.” He chose industrials (mostly railroads) because, as he proposed in 1882, “The industrial market is destined to be the great speculative market of the United States.”
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Waypoint Wealth Management
Is Your Advice Good Enough?
In today’s climate of one-page financial plans, bargain-basement fund pricing and automated investment tools, you may wonder whether you need a living, breathing financial adviser.
We think you do, but with a twist. First, we need to redefine traditional financial advice – the kind that’s been delivered by those focused on issuing buy/sell recommendations, executing transactions, making you think they have the best investment product for you, and collecting their commissions. If that’s what you’re thinking of, you are correct. You don’t need that. You probably never did.
As we face continual changes with the markets, Social Security, taxes, etc., the welcome advances we referenced above are best thought of as augmenting rather than replacing the solid advice most investors still sorely need to see their way through to a rewarding retirement.
So, what is “good advice”? > SEE MORE
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