If you’re in your 40s or 50s, you may be part of the “sandwich generation,” balancing the care of both children and aging parents, which can strain your financial resources and retirement planning. With parents living longer and more adult children staying at home, it’s crucial to have a plan in place to manage these responsibilities while securing your own future.
Who are we kidding? This could probably be part 2 of 7 with the sheer number of missteps investors are making. Maybe someday this list will get shortened!
To recap, here are the investing mistakes we discussed last month in Part 1:
If you find yourself falling for one of these mistakes, contact us for a free consultation. Trust us, you’ll be doing you and your loved ones a favor.
A college course could be taught on this subject, but we’ll keep things simple since we only have your attention for the next 60 seconds. We’ll follow up with Part 2 next month.
Avoiding the stock market when things are good. The stock market hits all-time highs on a regular basis. Fearful investors who interpret all-time highs as a sell signal can miss out on substantial gains. Fun Fact: since 1933, every president except 2 (GWB and Nixon) left office with a higher stock market than when they entered office.
Focusing on a small group of stocks. The recent bull market has been unusually concentrated around a select handful of stocks. Investors may experience FOMO and make risky bets by doubling down on these stocks. Since past performance doesn’t guarantee future results, investors may find themselves much worse off. It’s always better to stay the course with a diversified portfolio based on risk tolerance, time horizon, and financial planning goals.
If you find yourself falling for one of these mistakes, contact us for a free consultation.
The term “fake news” was first used in the 1890s when newspapers realized they could sell more papers by sensationalizing stories. The only thing that’s changed in 135 years is the format! Instead of receiving a newspaper once a day, we’re now bombarded 24/7 with questionable content on our phones, TVs, and computers. Determining what’s real or fake has become exhausting.
Financial news has also become sucked into this problem, as politics has further muddied the waters. Individuals or conglomerates with political agendas now own financial news stations. By preying on people’s biggest source of stress (money), it’s very easy to sway their political choices. Depending on what channel you’re watching, the economy could either be doing “very well” or “in a recession”.
While it’s nearly impossible to avoid the news altogether, it’s much more feasible to gather your information from a variety of sources. If you hear a wild conspiracy theory on late-night TV about using your life savings to buy gold coins, take it with a grain of salt.
Lastly, by comparing what was predicted against what came true, you can easily determine the quality of the source. If one of your sources is never correct, consider moving on!
If you have any questions about the legitimacy of your financial news, contact us.
So, check this out…59% of Gen Zers and 56% of Millennials get their investment information from social media. However, a majority (56%) of those that give the advice (the finfluencers) have “negative skill”, underperforming average investment returns by -2.3% per month, or -27.6% per YEAR!* You wouldn’t trust Dr. Google to give you medical advice. So, why would you trust Instagram Advisor to help you make investment decisions?
Social media is here to stay, and unfortunately a large group of unlicensed financial hobbyists have grabbed your attention, with millions of followers in tow. It’s no surprise that finfluencers are now on the radar of the SEC and FINRA (the 2 largest U.S. financial regulatory bodies). But because the SEC and FINRA are primarily focused on licensed professionals, these unlicensed hobbyists have largely flown under the radar. So, it’s very easy for them to give “hot stock tips” with little consequence.
How we as licensed financial professionals can use social media is highly regulated. The laundry list of what we can’t say on social media is long, primarily because we don’t know who our audience is going to be. i.e. How can we recommend a stock to someone whose entire financial picture we don’t intimately know? So, if you follow someone who gives “hot stock tips”, rest assured the advice you’re getting is likely garbage!
Our advice to you is to know who you’re following, and to know that investing isn’t one-size-fits-all. Everyone has different goals, time horizons, and risk tolerances. If you need customized, regulated advice from licensed financial professionals, please contact us for a free consultation. We’re here to help!
*”Finfluencers”. Swiss Financial Institute Research Paper, May 3, 2023. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4428232
You may either be an armchair golfer watching The Masters or an avid league player about to tee it up at your local course. Either way, there are lessons that can be taken from the golfing world which can be applied to your investment and retirement planning strategy.
If you need an experienced and disciplined financial coach in your corner, please contact us for a free consultation. Golf lessons are optional.
No, you’re not really a dummy. We just needed a catchy title! We actually discuss index benchmark performance with our clients all the time. Despite the problems of using indexes as a measure of investment portfolio success, the feedback from clients is often the same: “But how did we compare to the S&P 500, NASDAQ, Dow Jones, etc.?”.
So, while we cater to client demand to show index benchmarks, we also disclose the numerous problems with it:
Diversification: If your portfolio is properly diversified across all stock and bond sectors, it’s nearly impossible to benchmark. There are 11 sectors of the stock market and 4 sectors of the bond market, each with underlying asset classes. If you own 100% U.S. large cap stocks, then there’s a case for benchmarking vs. the S&P 500. Otherwise, you can forget about it.
Benchmark Weighting: The NASDAQ is a stock index made up of the largest 100 tech companies. The largest 7 companies now make up FIFTY PERCENT of the index!
The Dow Jones Industrial Average only contains 30 stocks: If you have a solid financial game plan and own a diversified risk-appropriate portfolio, then there shouldn’t be any need to compare to the indexes.
There’s no need to compare!: If you have a solid financial game plan and own a diversified risk-appropriate portfolio, then there shouldn’t be any need to compare to the indexes.
If you’re in need of a financial game plan, or want to know if you’re properly diversified, contact us for a free consultation.
Rational people understand that stock market performance will be based on sound economic fundamentals such as corporate earnings, interest rates, inflation, and GDP.
Irrational people believe the opposite: that political agendas, campaign promises and hypothetical policies will.
We want to set the record straight: There’s a mountain of evidence going back to 1950 that proves that presidential elections have had very little impact on the market. In fact, the data suggest that more volatility happens in the year leading up to presidential elections than it does after the elections. To us, that’s a clear sign that a decent percentage of investors are using emotions and personal agendas in planning for something that will likely never happen.
We hate to break it to you: There are huge discrepancies between ideas pitched on the campaign trail and actual policy changes that take place after election day. With that in mind, why would investors continue to make decisions now based on future hypotheticals? (Pssst…remember that 2nd line about irrational people?)
Of course policy changes happen. But they happen in both directions. So it’s crucial that you come to terms with this, set aside politics, and focus on what’s most important: the long-term financial well-being of you and your family.
If you need a rational voice to help you out, contact us for a free consultation.
Have you ever felt like you’re paying more taxes than you should? Well, you’re not alone! Uncle Sam has a way of making even the most profitable investments feel like a loss. But what if there was a way to ease your tax burden on these winners? That’s where tax-loss harvesting comes in, a strategy that allows you to offset your gains with losses.
Think of it like this: imagine you’re a farmer and you’ve had a bad year. Your crops have withered and you’ve lost a lot of money. But then you remember that you have a giant pile of manure sitting around. So, you decide to sell the manure to a fertilizer company. Now, you’ve turned your loss into a gain!
Tax-loss harvesting is similar. You sell your losing investments to offset your winners, lowering your taxable income. And just like the farmer, you’ll have more money in your pocket to do with as you please.
Here are a few tips to get you started:
If you’re not sure how to get started with tax-loss harvesting, contact us for a free consultation.
Happy Harvesting!
Position Wealth LLC Form ADV Part 2A
Privacy Policy Notice – Position Wealth
Fidelity Investments is an independent company, unaffiliated with Position Wealth, LLC (CRD # 325116/SEC#:801-127393) Investment advisory services are offered Position Wealth, LLC., an SEC registered investment advisor with its principal place of business in The Woodlands, Texas. The publication of Position Wealth’s website on the internet should not be construed by any consumer or prospective client as Position Wealth’s solicitation or attempt to render transactions in securities, or the rending of personalized investment advice over the internet. The information on this internet site should not be construed as personalized individual advice. A copy of our current written disclosure statement as set forth on Form ADV, discussing our business operations, services, and fees is available upon written request. We do not make any representations as to the accuracy, timeliness, suitability or completeness of any information prepared by any unaffiliated third party, whether linked to or incorporated herein. All such information is provided solely for convenience purposes and all users thereof should be guided accordingly. ACCESS TO THIS WEB SITE IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND WITHOUT ANY WARRANTIES, EXPRESSED OR IMPLIED, REGARDING THE ACCURACY, COMPLETENESS, TIMELINESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS WEB SITE OR ANY THIRD PARTY WEB SITE LINKED TO THIS WEB SITE.
You are now leaving the Position Wealth website and will be entering the Fidelity Clearing & Custody Solutions® site.
You are now leaving the Position Wealth website and will be entering the Black Diamond Wealth Platform.
TCWP LLC dba Position Wealth is not affiliated with Position Property Group. The information being provided is strictly as a courtesy. When you link to any of the websites provided here, you are leaving this website. TCWP LLC makes no representation as to the completeness or accuracy of information provided at these websites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information, and programs made available through this website. When you access one of these websites, you are leaving our website and assume total responsibility and risk for your use of the websites you are linking to.
TCWP LLC dba Position Wealth is not affiliated with Position Insurance. The information being provided is strictly as a courtesy. When you link to any of the websites provided here, you are leaving this website. TCWP LLC makes no representation as to the completeness or accuracy of information provided at these websites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website. When you access one of these websites, you are leaving our website and assume total responsibility and risk for your use of the websites you are linking to.
Position Property Group is not affiliated with TCWP LLC d/b/a Position Wealth. The information being provided is strictly as a courtesy. When you link to any of the websites provided here, you are leaving this website. TCWP LLC makes no representation as to the completeness or accuracy of information provided at these websites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website. When you access one of these websites, you are leaving our website and assume total responsibility and risk for your use of the websites you are linking to.
We love to share knowledge with people like you – join us at an upcoming event.
