Investor Behavior

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Rising Interest Rates and Your Investment Strategy

It’s been approximately a decade since the Great Recession began. By year-end 2008, the Fed had lowered the target federal funds rate to almost zero and embarked on an aggressive quantitative easing campaign. Now, after several years of economic recovery, the Fed has begun to reverse course, restoring its policies and targets closer to historical “norms” through quantitative tightening and gradually rising interest rates.

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Handling Market Volatility

Over the past few weeks, markets have been experiencing more volatility than what so many have come to expect as the norm and what has characterized the markets over the past several years. It is ironic because when it comes to investing, it is market volatility that is actually the norm – what we have experienced over the last several years is what is unusual.

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Our Take on Current Market Conditions

As a fiduciary advisor, you might already be able to guess what our take is on current market news: Unless your personal goals have changed, stay the course according to your personal plan.

Still, it never hurts to repeat this steadfast advice during periodic market downturns. After all, we understand that thinking about scary markets isn’t the same as experiencing them. So, what’s going on? Why did U.S. stock prices suddenly drop after such a long, lazy lull, with no obvious calamity to have set off the alarms?

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Perspective

With Hurricane Irma now in the rearview mirror, I can gratefully say how lucky we were. My home sustained minimal damage and we thankfully never even lost power. However, we had no internet, we had no cable, our cell service was spotty at best and we had no landlines. As we were busy trying to regroup and clean up, we learned that our air conditioners had been leaking, our dryer was the victim of a power surge and our pool heater had sprung a leak virtually draining our pool!

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Financial Freedom – It’s Not All About The Size of Your Bank Account

The way in which we respond and react to events that unfold in our daily lives are often the result of our past experiences. This is especially true when it comes to money. Whether you grew up in an affluent household, you grew up in a home where having food on the table was not a foregone conclusion or you grew up in a home somewhere in between, it is likely that the way you think about money today is influenced by some of these first experiences.

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The Art of Investment Management

Many people mistakenly believe that investment management is simply selecting the investment or combination of investments that will generate the highest yield or highest long-term return.  In reality, sophisticated investment management is actually much more complicated than that as it integrates several interrelated components of which specific investment selection is only one facet.

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When You Know Better …

“When you know better, you do better.” These words, famously spoken by Maya Angelou, suggest that the more knowledge we have, the better we can do for ourselves. If we know something is bad for us, we will avoid it, if we know something can enrich our lives, we will seek it out and as we learn more about the world around us, boundaries will continue to be stretched and advancements will continue to characterize our society. But knowledge in and of itself is not enough. We must use this knowledge to change our behavior.

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Preparing for a Market Downturn

Warren Buffett’s annual Berkshire Hathaway shareholder letters often offer sage advice. His most recent 2016 letter was no exception, including this powerful insight about market downturns: “During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy.”

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My Personal Finance Vision Statement

A little while back I began jotting down some of the rules that I try and live by when it comes to personal finance. Eventually, I turned it into what you see below, something I’m calling a personal finance vision statement. My plan is to update this over time as I continue to learn more about money, investing and life. For now, here is version one.

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