Category: Investment

What do you think the future will look like?

thinking

Imagine printing out your next meal or wearing contact lenses that know your thoughts and feelings.

What if your house could learn about you … and then anticipate your needs?

Mind-blowing inventions like these could be just around the corner. And they’re not even the wildest things that we may see by 2050.

Advancements in artificial intelligence (AI), virtual reality, and nanotechnology are putting the unbelievable on the horizon.

This could change life as we know it in the not-so-distant future.

In fact, everything from our mundane routines to our fanciest gadgets may soon be obsolete. If that happens, we could have new and totally different ways of experiencing life.

We could also have far better ways of improving it.

So, what’s the stuff of science fiction and what could really happen?

There’s no way to know for sure, but we do have some clues about what may lie ahead.

Let’s check them out and see how they could change our lives by 2050.

How much do you know about cryptocurrency?

cryptocurrency

Cryptocurrency isn’t the black sheep it once was. It’s hit the mainstream, and it’s grabbing up more headlines and investors than ever before.

These days, about 1 in 7 Americans own some type of cryptocurrency. And a little more than half of them bought it for the first time in 2020.

Those numbers are likely to climb this year. That’s because more than a quarter of folks say they plan to buy cryptocurrency in the next 12 months.

With all the headlines, it’s hard to ignore all of the excitement.

And, yet, many also admit they still don’t know all that much about cryptocurrency.

Do you know the basics?

How much do you really know about cryptocurrency?

Test your knowledge here and check out the facts to see if the cryptocraze lives up to all of the hype — and if it really makes sense for you to jump on the bandwagon.

How Far Could $1 Million Go In Retirement?

retire on $1 million?

A million dollars used to be the ultimate target for retirement portfolios. Retiring as a millionaire brought status and confidence that you could live comfortably during your golden years.

If you retired with $1 million in 1970, you probably didn’t have to worry about your nest egg running out, even with a lavish lifestyle. It would be like retiring with $6.9 million today.1

Retire with $1 million in the ’80s, and it would have been like retiring with $3.35 million in 2021.1

And in 1990?

A cool $1 million would have gone twice as far as it does these days.1

Clearly, $1 million doesn’t go as far as it used to.

Just how far could it go these days?

The answer depends on how and where you live.

In retirement, as in real estate, location is everything (or, at least, it’s a lot). The map below shows how long $1 million could last in each state. This state-by-state breakdown features a few different hypothetical growth scenarios and the results of our calculations.

Let’s see how long a $1 million nest egg could last where you want to retire — or wherever you’ve already retired.

How to Be a Smarter Investor in Uncertain Times

smart investor

In a perfect world, logic would always guide our financial decisions. Emotions wouldn’t come into play.

But we don’t live in a perfect world. Far from it.

That means our emotions impact our financial choices more than we realize.1

Shockingly as much as 95% of our purchase choices are made subconsciously, driven by our emotions—as little as 5% are based in logic (and that’s when we’re in a good head-space and feeling comfortable and secure).2

When we’re faced with uncertainty, fear and instinct can take over and push logic right out of the window.3

Your brain will make you want to react quickly to protect yourself and avoid the pain you anticipate from potential losses.4

Ironically, these instincts often make things worse. Emotional reactions can lead to poor choices and the losses you were trying to avoid in the first place.5

The best way to avoid letting your hardwired biases take over? Use these strategies. They can help you fare better in any crisis. They may even make you a savvier investor.

6 SECRETS TO MAKE YOU A SMARTER INVESTOR

1. AVOID THE OVERCONFIDENCE TRAP

Overconfidence is a killer. In fact, research shows that the more experience you have as an investor, the more overconfident you tend to be.6

Stay realistic and grounded by a strategy. Get advice before making big decisions.

2. FORCE EMOTIONS INTO THE BACKSEAT

Losing money hurts. The truth is that the pain of losses can actually be more intense than any satisfaction from gains. Economists call that “loss aversion.”7 The pressure of anxiety or uncertainty can lead to irrational choices that actually work against our big-picture financial goals.

Don’t give into fear or panic when they show up. Focus on logic and rely on your professional for guidance.

3. FRAME PERFORMANCE IN A MORE MEANINGFUL WAY

Framing is everything when it comes to evaluating performance. That’s because the way information and events are presented to us can sway our perception and influence our decisions.8

Look beyond short-term outcomes when framing performance. Think about your longer-term goals and the progress you are making towards them, even when short-term corrections slow your progress.

4. NEUTRALIZE YOUR RECENCY BIAS

Recent events usually influence you more than those in the distant past. Why? The human brain remembers recent events more clearly and gives them outsized weight when making decisions. Your brain can mislead you by expecting more of what you’ve seen already. And that can lead to overconfidence and emotional decisions.9

Resist this tendency by remembering the market is constantly changing. Over the long term, bear markets recover. And no bull market lasts forever.

5. CONSIDER MULTIPLE PERSPECTIVES

With decision making, it’s natural to focus on one aspect or one piece of information as a starting point. Often, that can greatly influence your final choice. This is known as “anchoring bias,” which can give you tunnel vision. It can lead you to fixate on a single data point, like an investment’s price, while ignoring other key information.

To fight it, seek out more information. Think critically about multiple perspectives, and don’t forget to consider future potential.

6. SLOW DOWN & TAKE TIME TO THINK MORE DEEPLY

Humans like to make snap decisions. And, when you’re stressed out, you’re far more likely to make impulsive decisions. The problem is that “gut” decisions are made based on instinct, habit, and emotions, instead of logic and facts. When you’re in gut-decision mode, it can be much harder to make goal-oriented choices.10

Take your time when making financial decisions and let your brain shift into analytical mode. With a little time, emotions cool down, and you’ll typically consider more alternatives.11

We can’t foresee or control downturns or upswings. We can only control our mindset, our emotions, and our financial choices.

FINANCIAL LESSON: KEEP YOUR COOL & FOCUS ON THE LONG GAME WHEN CRISIS STRIKES

Markets and economies are never predictable or under our control. We can’t foresee or control downturns or upswings. We can only control our mindset, our emotions, and our financial choices.

That’s easy to lose sight of during periods of economic uncertainty and financial stress.

But, if you can focus on the long game and improve your mental game, you’ll come out stronger and more prepared.

That can make you less vulnerable to hardwired human biases and help you make better financial decisions, no matter what the markets are doing.

As a financial adviser, one of my most important jobs is to help you become a smarter, more capable investor. That involves using psychology and behavioral finance to help you learn more about how your brain works and improve your financial behaviors.

I’m also here to be an objective accountability partner. I talk my clients through emotional decisions, and I can be an important voice of reason and calm when markets are turbulent and it feels like the sky is falling.

If you’re curious about behavioral finance—or if you need a sounding board for a financial decision—I’m here for you. Don’t hesitate to call me at 800-840-5946.

I’d be happy to answer your questions and share some more advice.

Need a Financial Planner?
SOURCES & DISCLOSURES
1 https://scholar.harvard.edu/files/jenniferlerner/files/annual_review_manuscript_june_16_final.final_.pdf
2 https://hbswk.hbs.edu/item/the-subconscious-mind-of-the-consumer-and-how-to-reach-it
3 https://www.psychologytoday.com/us/blog/the-divided-mind/201207/logic-and-emotion
4 https://www.psychologytoday.com/us/blog/science-choice/201803/what-is-loss-aversion
5 https://www.cmu.edu/dietrich/sds/docs/loewenstein/RoleEmotionEconBehav.pdf
6 https://www.sciencedirect.com/science/article/pii/S0970389615000944
7 https://www.scientificamerican.com/article/what-is-loss-aversion/
8 https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/framing-bias/
9 https://www.sciencedaily.com/terms/anchoring.htm
10 https://www.sciencedirect.com/science/article/pii/S2352289515300187
11 https://www.scientificamerican.com/podcast/episode/making-a-decision-take-your-time-10-04-17/
Risk Disclosures: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. The S&P 500 is an unmanaged composite index considered to be representative of the U.S. stock market in general. All index returns exclude reinvested dividends and interest. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. For illustrative purposes only.
Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.
This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. These are the views of Finance Insights and not necessarily those of the named representative or firm, and should not be construed as investment advice.

Could the worst be over?

bear markets

Some market strategists are calling the end of the bear market already … do you think they’re right?

(Keep reading to see what could be behind the surge, as well as a breakdown of how the $2 trillion CARES Act affects your wallet.)

But first of all, how are you doing? Are you and your families safe and well?

Our firm has worked virtually with each other and clients for years, so the transition to working from home has been seamless for us.  Also, I’ve found that I’m not terrible at home schooling my daughter, but I have to admit I’m glad she’s only in the fourth grade and the hardest topic we’ve had to cover is acute and obtuse angles!  I’ve heard it’s very likely that she’ll be home the rest of the school year, so we’re going to have to get into a set weekday routine if we are going to get through all her daily assignments for the next two months.

With markets whipping between rallies and retreats, it’s natural to ask:

Is it time to buy?

Is it time to sell?

Are we near the bottom?

Is the bear market finally over?

Despite the recent market surge, which propelled the Dow 21% higher in just 3 days (technically ending its bear market correction), it’s likely too soon to get overly optimistic.1

What gives? How can markets be rallying when the crisis hasn’t even peaked yet? When markets have fallen so much and “priced in” so much bad news, it’s common to see short-term surges on good news like the relief bill. However, these “head-fake” rallies can be unsustainable when there’s so much uncertainty.

Bottom line: No one is good enough to call the exact bottom of a market. What’s important is looking through the bear market to the other side and picking up opportunities along the way. 

Whether the bear market is over or not, we’ve been here before and know what to do.

How worried should I be about a recession? 

Cautious, but not panicked. When a $21 trillion economy comes to a screeching halt, there’s going to be an economic contraction. Multiple timely indicators show that we are already experiencing a sharp downturn.2

However, the $2 trillion fiscal rescue act and the Federal Reserve’s new asset-buying program are a double-barreled bazooka aimed at the effects of a serious recession.

We’re monitoring the data rolling in and will know more about how the economy is reacting to the unprecedented aid in the coming weeks and months.

What’s inside the $2 trillion CARES Act? What’s in it for me?

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is designed to provide relief for individuals and businesses who have been hurt by the outbreak. I won’t try to include all 800+ pages in this email, but here are a few key provisions that you should know about:3

One-time cash payment. Taxpayers are eligible for a one-time direct deposit of up to $1,200 per adult ($2,400 per couple) plus $500 per child under age 16. Amounts are reduced for those who make more than $75,000 ($150,000 if married). If you have filed your 2019 taxes already, the IRS will use that income to calculate your payment; if not, they’ll use your 2018 tax filing.

Better unemployment benefits. The Act will extend and expand unemployment insurance through Dec. 31. Eligible workers (now including self-employed, independent contractors, and gig economy workers) will receive an extra $600/week for four months, on top of what they receive from state unemployment benefits.

Early withdrawal penalty waiver. The Act waives the standard 10% early withdrawal penalty for eligible coronavirus-related distributions from retirement accounts (retroactive to Jan. 1). You’ll still pay income taxes on withdrawals, but you can spread them over a three-year period or use that time to roll the distribution back over.

2020 RMDs suspended. You won’t have to take a Required Minimum Distribution from your IRA or 401(k) this year, leaving you in control of how much you withdraw. If you already took your RMD for 2020, you have several choices: keep it and pay taxes on it, return it to your IRA as an indirect rollover, or convert the amount into a Roth IRA (Roth conversions are permanent).

“Client” means someone who is under my protection, and that extends to your loved ones.

Financial advice is a public service in these times, and I’m here to help. Please forward this email to any friends and loved ones who have been affected by the coronavirus and who might need some help. If you have questions about how the slew of recent changes could affect you, please call the office at 800-840-5946 and we’ll find a time to talk.

Need a Financial Planner?

1https://markets.businessinsider.com/news/stocks/stock-market-news-today-index-reaction-jobless-claims-stimulus-bill-2020-3-1029037145

2https://finance.yahoo.com/news/ihs-markit-march-2020-flash-us-purchasing-managers-index-134651548.html
https://www.cnn.com/2020/03/26/economy/unemployment-benefits-coronavirus/index.html

3https://www.fidelity.com/learning-center/personal-finance/coronavirus-stimulus-package
https://www.washingtonpost.com/business/2020/03/30/coronavirus-stimulus-cares-act/
https://www.cnbc.com/2020/03/26/coronavirus-relief-act-expanded-unemployment-payment-and-eligibility.html
Chart source: https://www.npr.org/2020/03/26/821457551/whats-inside-the-senate-s-2-trillion-coronavirus-aid-package

Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.

This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Risk Disclosures: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. The S&P 500 is an unmanaged composite index considered to be representative of the U.S. stock market in general. All index returns exclude reinvested dividends and interest. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. For illustrative purposes only.

Why you shouldn’t worry about who the next president will be

elections

Do you know what one of the number one causes of market losses during an election year is?

Fear.1

In fact, the uncertainty of the elections can stoke your fears. It may even encourage you to make rash, emotional decisions.1

That can lead to losses, but it doesn’t have to.

If you know the facts about the market during presidential election years, you can potentially avoid investing mistakes that so many others make.

When it comes to the market during a presidential election cycle, the election itself may not matter as much as you think. We explain why and look at some proven facts about the market and elections in this month’s Visual Insights Newsletter. Click here to see it!

No matter what party is in power, it’s important to remember that past results with one party in the White House don’t guarantee future results if that party wins.

Go ahead and click here to discover more facts about politics and the markets.

Need a Financial Planner?

Risk Disclosures: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results. The S&P 500 is an unmanaged composite index considered to be representative of the U.S. stock market in general. All index returns exclude reinvested dividends and interest. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. For illustrative purposes only.

What do you know about bear markets?

bear market

Do you know why bear markets happen?

Or what you should do during them?

In this issue of the Visual Insights Newsletter, we’ll explore these questions and much more, giving you the facts about bear markets. Click here to check it out!

We can never predict when there will be a bear market, but knowing the facts can help you feel prepared.

Click here to find out some helpful things to do during bear markets.

What do you need to know about investing in marijuana?

The discussion around marijuana has undergone great social, legal, and economic changes in the last few years: From Reefer Madness to hot new investing fad.

Think marijuana is missing from your portfolio? Read this first…

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About Richard

Richard Archer is a financial advisor and the President of Archer Investment Management with more than twenty years of industry experience. He specializes in providing comprehensive financial planning and investment guidance and personalized care and attention to professionals with complex compensation and families pursuing financial freedom. Along with holding a Wharton Bachelor of Science in Economics and a Texas MBA, he is a CERTIFIED FINANCIAL PLANNER™ and a Chartered Financial Analyst®. He combines his advanced industry education and knowledge with his genuine care for people to provide clients with an exceptional experience. To learn more about Richard, connect with him on LinkedInFacebookTwitter or visit www.archerim.com.