Staying Invested in the Stock Market

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Staying invested during market volatility can pay off over time

The markets go through cycles, it’s never a straight line. It’s time in the market not market timing.

It’s normal for investors to consider pulling their money out of the stock market during a major market sell off or melt down. But doing so would be short-term thinking. Staying in the market for the long term helps investors participate in future gains and keep them on target for their goals. Missing out on market upswings can have a devastating impact on long-term earnings and returns.

Staying Invested Matters
Six of the 10 best days occurred within two weeks of the 10 worst days.*

*On August 24, 2015, the Dow Jones Industrial Average closed down 588 points. On August 26, it closed up 609 points.

Know

  • Fear is not an investment strategy—emotion-based selling can cause you to miss the market rebound.
  • Think long term—U.S. stocks can be a source of growth for investors who stay in the market.
  • Low markets can be an opportunity to buy stocks at bargain prices.

Do

  • Adopt a disciplined long-term strategy and stick with it.
  • Choose a level of risk that lets you feel comfortable and matches your time horizon.
  • Keep up your regular investments, especially into retirement plans.

Be smart. When investing, smart investors create a long-term, diversified plan to help themselves ride out the market’s ups and downs.

Source: Chase

Consumer Spending and Confidence

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U.S. Consumers remain confident, strong and spending.

Consumers haven’t cut back spending even as their worries grow. Consumer spending represents about 70% of U.S. economic activity. Nevertheless, U.S. Consumer cannot save rest of world economically, but they can insulate the U.S. economy from the slowing global economic growth particularly in Asia and Europe. The U.S. economy is relatively self contained, but it’s not an isolated island and it can be affected by what’s happening in the rest of the world.

U.S. consumer is in a good place because the labor market remain strong. Despite the silly talk from financial entertainment media pundits about U.S. economy going into recession during calendar year 2019, the main risk for consumers are the alarmist recession headlines which may create a self-fulfilling prophecy.

But waning confidence could cause them to cut back their spending in the months ahead, potentially weakening the economy. A measure of consumer confidence fell in August to the lowest level since the start of the year. Additionally, a gauge that measures what consumers think about their own financial situation and the current health of the economy fell to a nearly two-year low. Monetary and trade policies have heightened consumer uncertainty—but not pessimism—about their future financial prospects.

The main takeaway for consumers from the first cut in interest rates in a decade and from a brief inverted yield curve was to increase apprehensions about a possible recession. Consumers concluded, following the Fed’s lead, that they may need to reduce spending in anticipation of a potential recession. Falling interest rates and am inversion of the U.S. Treasury yield curve have long been associated with the start of recessions.

Source: Surveys of Consumers. University of Michigan, http://www.sca.isr.umich.edu/.

Worthy White Wines

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White wines from around the world can be as complex as red wines and like their counter parts, white wines can have vastly different tastes. Like red wines, white wine has a plethora of varietals with region specific vines as well.

White wines should be chilled slightly for serving and are typically fermented at cooler temps during the wine making process to preserve those rich fruity flavors often found in white wines.

Some of the most popular varietals are Chardonnay, Sauvignon Blanc, Riesling, Pinot Grigio, Chenin Blanc, and Verdelho. Here are a few less well known white wine varietals that are being enjoyed by white wine enthusiasts:

Albariño wine (“alba-reen-yo”) is a high-quality, light-bodied white that grows mostly in Spain and Portugal. It’s loved for its high acidity, refreshing citrus flavors, dry taste, and subtle saltiness. For seafood lovers, Albariño is a fantastic choice for pairing with exquisite dishes like ceviche, fish tacos, seafood pasta, and shrimp.

Vouvray (“voo-vray”) is a white wine made with Chenin Blanc grapes that grow along the banks of the Loire River in the Touraine district of France. Wines range in style from dry to sweet, and still to sparkling, each with its own distinct character.

Viognier (“Vee-own-yay”) is a full-bodied white wine that originated in southern France. Most loved for its perfumed aromas of peach, tangerine and honeysuckle, Viognier can also be oak-aged to add a rich creamy taste with hints of vanilla. Viognier is definitely something you’ll like to swirl.

Chablis (“Shah-blee”) is a Chardonnay that rarely uses oak-aging, resulting in a very different style and taste profile. Chablis is 100% Chardonnay that is described as having citrus and white flower aromas with dry, lean, light-bodied flavors of citrus, pear, minerality and salinity. Chablis rarely displays flavors of butter – an indication of oak-aging. In fact, one of the most desirable traits in quality Chablis is a long, tingly finish of high acidity and flint-like minerality.

Foolproof Financial Plan

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The goal of financial planning and a written financial plan are to make your money goals a reality. With smart financial planning and long term investing you can save a modest amount each month, and end up with the financial assets to retire comfortably in 30 years or less. Financial planning and developing a financial plan will help an investor identify their goals and create a long term investment strategy for achieving them.

Think of a financial plan as a written planning guide to remind you of what you want, where financially you want to be in the future, and what it will take to get there. A comprehensive financial plan will include many of the following parts:

  • A personal net worth statement—a snapshot of what you own and what you owe. This will help you know exactly where you stand, and also give you a benchmark against which you can measure your progress.
  • Cash flow is essentially income minus expenses—exactly how much money comes in and goes out every year, and understand if it is sustainable in the long term. The foundation for a budget includes identifying fixed and what’s discretionary expenses and if necessary, devise a debt management plan.
  • A budget–helps to manage your money, to consider your immediate needs and wants, and to prepare you to achieve your long-term financial goals
  • An Emergency fund–ensure adequate cash on hand to cover three to six months of living expenses to handle any unplanned expenses or loss of income.
  • A debt management plan—is a crucial part of becoming financially responsibilities. Debt can be used smartly to achieve one’s financial goals, or debt can be used poorly to buy things a person may not need with money he or she does not have.
  • A retirement plan—specifying how much you need to save each year to achieve the lifestyle you and your family hope to maintain. This includes a recommendation on how best to maximize Social Security benefits, to incorporate any pension funds and to utilize personal savings.
  • An analysis of how current investment portfolio aligns with short, intermediate and long-term goals.
  • A plan for college education funding offspring.
  • A review of employee benefits, including equity compensation or deferred income planning.
  • A review of insurance coverage—the key is to make sure that you have the right types and amounts and that you aren’t paying for unnecessary coverage.
  • Planning for special needs—for a child, parent, or other dependent.
  • Recommendations for creating or updating your estate plan, including charitable giving and legacy planning.

Young and Turning Sixty

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For those of us who are turning sixty years young, we sexagenarian have much in life to be grateful and thankful regardless of the current hand we’ve been dealt. As we ease into the seventh decade of life, just the mere fact that we were able to awake each morning, to take another breath, and to feel the warmth of the of the sun on our skins represents a great blessing.

Furthermore, we should cherish and appreciate each day of walking above ground since the daily walk is not guaranteed and it beats the alternative by a wide margin.

Additionally, we should all be from the school of thought which dictates that as long as you’re alive, you should never, never, never, give up on on this life, or give up on achieving your dreams and goals. You should not fear failure, but you should fear not trying or quitting too early before achieving your dreams and goals. Follow the example of the Ohio born Thomas Edison who was quoted as saying that “I have not failed. I’ve just found 10,000 ways that won’t work.” When trying to create the incandescent light bulb. After thousands of repeated failures, he persevered and never permitted the fear of failure stop him from realizing his dream.

So, my fellow sexagenarians, never give up on pursuing your dreams or passion… since it never too late to write the next great American novel, to visit that faraway dream vacation destination, or to pursue that new skill of learning to play the piano or alto saxophone.

When in doubt, remember the words of the genius Albert Einstein, You never fall until you stop trying.”

Inverted Yield Curve and Recession

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This morning, we awoke to the financial entertainment news hysteria [trying to sell ads] that the Federal Funds interest rate yield curve briefly inverted for the first time since 2007.  Inverted yield curve does not cause a recession, but typically forewarns of a economic recession within eleven to eighteen months of the inversion.  Many of the financial entertainment network commentators and financial pundits appear to imply that the “world is dire” economically due to the inverted yield curve and talked incessantly that a ‘big-bad’ recession is on the horizon for the U.S.

Source: CNBC Squawk Alley

Inversion of the yield curve occurs when the longer term 10 year U.S. bond interest rate falls below the shorter 2 year U.S. bond interest rate.  Historically, a recession does not occur without an inverted treasure  yield curve.  However, investor should be aware that recessions are a normal part of the economic cycle.  And, no one, not even Noble Prize winning economist can predict if or when a recession will arrive on the doorstep of the U.S. economy. 

Even with an inverted treasury yield curve, the stock market can still go up as much as four present in the twelve months following an inversion since economic expansion tends to continue.  Currently, the U.S. economy continues to expand, although the rate of growth is slowing or decelerating.  

The news of the yield curve coupled with slowing economic growth in China and Europe, the turmoil in Hong Kong, and U.S. – China trade tensions have spooked traders causing equity markets, specifically the Dow and S&P 500, to tumble. 

Advice for investors is to stay invested for the long term and review your financial plan.  Eventually, there will be a recession…that is certain since it is a normal phase of the economic cycle.  Whether it is a direct result of today’s new regarding the inverted U.S. Treasury yield curve is anyone’s guess.  

Never Give Up on Dreams

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Trust and believe in yourself!

The power of never giving up is a necessity for success because success isn’t supposed to be easy. Most people give up way too soon. To achieve something great, a person can’t be afraid of failing. People must learn how to keep going when it seems impossible to continue.

“There is no failure except in no longer trying.” ― Elbert Hubbard

The only way to truly fail is to quit. To be successful…never quit. The most successful people are the ones that failed the most and quickest.

Fear and quitting are the top two reasons many people never realize success or achieve their dreams. Don’t ever give up or quit on your dreams.

Fear of failure, fear of rejection, or the fear of the unknown hold people back from living their best lives. In order to overcome fear, people must be willing and even eager to take calculated risks from time to time and stop playing it safe. Otherwise, an individual will live a life or end up filled with regret.

Life is short to not live life to its fullest; not to live one’s best life. People never know when the end of your life will happen. So, don’t get so caught up day-to-day living that you let life pass by. Tell people how much they mean to you. Travel, laugh, have fun. Don’t wait until it’s too late to do everything you’ve ever wanted to do. Life is short, don’t forget to enjoy it.

Growth Mindset vs. Fixed Mindset

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There are two types of mindsets that greatly determine how you view the world.

These two types of mindsets can have a huge influence on person’s life if they let it. The two types of mindsets were first identified by Carol Dweck in the book, Mindset: The New Psychology of Success.

Live the Best Life

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Live the best life, we must overcome and free ourselves from bitterness. Focus on what you need to focus on. Take Personal responsibility, it is what you choose to do:

1. Let it go!

An individual can’t keep blaming the past for their current predicament.

  • Get rid of all bitterness.
  • Bitterness hinders the work of the Holy Spirit in our hearts.
  • Bitterness is deep seated anger that comes from hurt.
  • Never base forgiveness on restitution or the actions of others.
  • Forgiveness must be based on one’s own choices and actions. For if you forgive men their trespasses, your heavenly Father will also forgive you. But if you do not forgive men their trespasses, neither will your Father forgive your trespasses.
  • Whatever you pray for, believe you’ll receive it. If you believe, you will receive whatever you ask for in prayer.
  • Live in the power of forgiveness.
  • Jesus said…Father forgive them, they do not know what they do.

2. Live it Up!

  • Stop living in the past; start living in the present.
  • Seek the peace and prosperity of that city;
  • Increase and don’t decrease.
  • Build something. Plant something.
  • Enjoy the land of abundance.
  • Bitterness keeps us from abundance; Forgiveness leads us to abundance.

3. Look Ahead!

  • Whatever that difficult season is will end.
  • God will bring you back to peace, prosperity and abundance.
  • Don’t be a victim of your past. Be a visionary of your future.
  • I can do all things through Christ whom strengthens me.
  • Be a Visionary of your Future.

Source: Jeremiah 29:4-11

Retirement Realities

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Running out of money pales in comparison to running out of family, friends, good health, and time – Robert Laura

Retirement can result in a full-blown disengagement from work and colleagues, leaving those who aren’t well-prepared feeling lost, unfulfilled, and misguided.  Therefore, it’s crucial for new and existing retirees to “Retire to Something” such as traveling, planting a garden or volunteering at a local non-profit, otherwise they can lose their sense of purpose and stability.

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Retirement planning should focus the more personal areas of life that are crucial to creating a purposeful, happy, healthy, and connected retirement.  Retirees can unknowingly put off taking care of themselves, their relationships, and the pursuit of passions and hobbies. Therefore, new and existing retirees have to take the time to discuss and plan for those things that lay beyond the scope of traditional planning.

Retiree who are financially able to maintain their standard of living can still miss the boat.  Financial resources can’t buy love, health, family or friends. At the end of life, very few people ask to see their financial portfolio when they’re on their deathbeds. They want to be surrounded by those family members and friends that they love and mean the most to them.  

Retirement magnifies what retirees already are, not necessarily what they want to be.  If a pre-retiree is unhealthy, has bad habits, or prefers to keep to themselves, retirement will foster more of that unless those habits and patterns are purposefully altered.  

Retirees need to understand that true independence and freedom come from managing life’s challenges and trials.  Success in retirement is truly the result of good judgment. Only by experiencing the difficulties of life and going through the transition that retirement presents each day can retirees truly appreciate the independence it offers.

Retiree’s attitude, understandably, can play an important role in how a person acclimate to retirement.  A positive attitude is contagious and can help build stronger relationships and a greater sense of purpose, as well as help an individual stay relevant and capable. 

One of retirement’s greatest paradoxes is that it takes work to achieve a successful retirement. Retirees have to work at staying active, developing a active schedule that gets them out of the house, learning new things and pursuing their passion… not to mention meeting new people. Retirees have to work at replacing their work identity, keeping busy, as well as staying relevant and connected to family and friends.  As a result, they need new skills, time to practice them, and in some cases a retirement coach to help guide them.

Retirees should focus on purpose, relationships, health, and well-being.  They should always be on the lookout for ways to stay motivated… and continually seek out new things and opportunities.  The ultimate goal of Retirement is making the most of Retirement. 

Source:  Laura, Robert, 7 Of The Best Retirement Quotes To Get You To And Through It, Forbes Magazine,  May 26, 2017, https://www.forbes.com/sites/robertlaura/2017/05/26/7-of-the-best-retirement-quotes-to-get-you-to-and-through-it/#566a3b746c2b