Category: Smart Money Tips

Finding Hope at the End of a Hard Year: Remarkable Lessons from 2020.

finding hope

No one could have foreseen the events of 2020.

It was a tumultuous year. The pandemic overshadowed everything. Fires, hurricanes, protests, and the election dominated headlines. So did Tiger King, toilet paper shortages, major events held over Zoom, and everyday heroes.

For me, the biggest standout memories of 2020 have been the strong market growth, the creative ways people and businesses have adapted in the pandemic, being able to spend more time with Peanut, and consistently lifting weights at home instead of sitting in traffic.  I know the funny meme for 2020 is a picture of a dumpster fire, but my family and loved ones have been safe from COVID so far and there have been some meaningful bright spots.

What moments from the last year stand out for you?

Whatever they are—and whatever your verdict on last year may be—we can all agree 2020 has been disruptive and unforgettable.

It’ll be fascinating to see how history looks back at 2020 and what big lessons future generations take away from the past year.

As the year closes, here are some of the best life lessons we can take away from 2020 right now.  Bringing these lessons with us into 2021 can help make life better and happier in the New Year and beyond.

If You’re Hoping To Retire Within The Next 5 Years…

retirement

The coronavirus-driven recession and uncertainty will make retiring in Austin within the next 5 years challenging. The record volatility, recent legislation, and economic disruption mean that the decisions you make next will define your retirement. Create confidence in your plan for a work-free life by downloading this free checklist. Worried about what’s going on and want advice now? I save a few appointments each week — grab one by calling 800-840-5946.

The Amazing Power of Gratitude

gratitude

How To Be Happy When Life Doesn’t Go As Planned

IN FINANCE AND IN LIFE, EXPECTATIONS OFTEN ECLIPSE REALITY.

They become anchors for how we evaluate opportunities (like companies and stocks) and our own sense of happiness.1

They also make us fixate on what could or should have been, not what’s right in front of us.1

When reality doesn’t line up with our expectations, unhappiness, resentment, and anxiety usually follow.2

These negative feelings can intensify when we sense uncertainty.3 We get anxious about our hopes, goals, and dreams for the future when we feel like everything’s unpredictable.4

Yet, it’s not impossible to be happy when life throws us a curveball and the future seems uncertain.

How can we find joy when things feel chaotic?

Gratitude.

When we’re grateful, we can let go of our expectations. That can lead to greater happiness and life satisfaction, no matter how uncertain the present is—or the future may be.5

HOW TO BE MORE GRATEFUL & HAPPIER: 6 QUESTIONS

1. WHAT IS A MAGICAL MEMORY YOU HAVE FROM THE LAST FEW MONTHS?

We instinctively focus more on the negative than the positive. When times are tough, we expect the worst. To see things in a more positive light, we have to consciously set aside the negativity.6

Recalling happy memories is a quick way to do that. Even remembering a simple act of kindness can make you feel happier.7 

2. HOW HAS YOUR PERSPECTIVE CHANGED OVER THE LAST FEW MONTHS?

Consider the interactions, experiences, or people who have changed the way you think about something recently. Think about what you’ve learned.

Change and uncertainty can test our strength and character. How we stand up to the challenge may not just change our perspectives. It can also keep us grounded and spark personal growth.8

3. WHAT DO YOU TAKE FOR GRANTED?

It’s natural to take things for granted as we get used to them, even if they matter a lot to us. If we don’t take time to appreciate them while we have them, though, we may never get the chance.

Writer Robert Brault may have said it best with this: “Enjoy the little things in life because one day you’ll look back and realize they were the big things.” 

4. WHAT DO YOU WANT TO REMEMBER FROM THIS PERIOD OF YOUR LIFE?

“We do not remember days; we remember moments.” These words from Cesare Pavese ring true if you’re in your 20s, your 90s, or anywhere in between.

Whether you’re starting your career, raising kids, or enjoying retirement, recognize the good moments that are shaping this phase of your life. If you do, you’ll enjoy them far more as they’re happening.

5. WHAT EXPERIENCES HAVE YOU HAD THAT YOU’RE GRATEFUL FOR?

Some experiences create memories that last a lifetime. Family dinners, vacations, celebrations, major life milestones, and once-in-a-lifetime moments can shape us forever and for the better.9

They can also have positive impacts on the way we learn, see the world, and respond to unknown situations in the future.10 

6. WHAT DO YOU FEEL LUCKY TO HAVE THAT SOME OTHERS DO NOT?

This doesn’t have to be extravagant. It can be simple, like some treasured part of your day or week.

It can also be unique and intangible, like a relationship you have with a friend, sibling, child, or spouse. In fact, these close relationships are the key to fulfillment and long-term happiness. Appreciating how special they are can help you make them stronger while bringing you more satisfaction.11

SOURCES & DISCLOSURES

1 – https://www.psychologytoday.com/us/blog/cui-bono/201802/the-psychology-expectations

2 – https://hbswk.hbs.edu/item/the-subconscious-mind-of-the-consumer-and-how-to-reach-it

3 – https://dash.harvard.edu/handle/1/3153298

4 – https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4276319/

5 – https://www.health.harvard.edu/healthbeat/giving-thanks-can-make-you-happier

6 – https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3652533/

7 – https://greatergood.berkeley.edu/article/item/how_memories_of_kindness_can_make_you_happy

8 – https://www.psychologytoday.com/us/blog/the-power-prime/201201/personal-growth-four-obstacles-positive-life-change

9 – https://www.princeton.edu/news/2005/03/10/studies-relate-life-experiences-brain-structure

10 – https://www.ucdavis.edu/news/how-experience-changes-basics-memory-formation/

11 – https://www.health.harvard.edu/healthbeat/giving-thanks-can-make-you-happier

12 – https://www.psychologytoday.com/us/blog/future-trends/201808/why-do-we-think-so-much-the-future

13 – https://greatergood.berkeley.edu/article/item/why_gratitude_is_good

14 – https://ggsc.berkeley.edu/images/uploads/GGSC-JTF_White_Paper-Gratitude-FINAL.pdf

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.

Mental Secrets To Make Better Financial Decisions

glass globe

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 headspace 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.

Click Here for full article and to sign up for our Visual Insights Newsletter!

What Should I Do With My Old 401(k) or Employer Plan?

401k

Lots of people are losing their jobs and getting furloughed in Austin, and the CARES Act gives workers extra flexibility in tapping their retirement accounts. But there are a lot of factors to balance before deciding what to do with a 401(k) or other workplace retirement plan. This FREE guide helps investors take control of an uncertain situation and shows what the options are with an old employer plan. Overwhelmed and need personal advice now? Call 800-840-5946 to get your questions answered in a complimentary 1-on-1 phone appointment.

This FREE Guide reveals the 5 options to revive your old zombie plans!

Is the sky really falling?

sky falling

I’m sure you saw the headlines:

“Record Economic Plunge”1

“Second-Quarter GDP Plunged by Worst-Ever 32.9%”2

“U.S. Economy Contracted at Record Rate Last Quarter”3

It sure sounds like the sky is falling.

Is it really? Let’s take a step back and put the news in perspective.

The coronavirus shutdown thumped the economy, businesses, and workers badly over the last two quarters, and it’s uncertain how quickly we’ll recover.

We knew that Q2 GDP numbers (Gross Domestic Product) were going to be horrible. In fact, in May, the Federal Reserve thought they were going to be even worse.4

So, ~33% down is actually better than expected.

But, despite the headline, we didn’t actually “lose” 33% of economic production last quarter. The Commerce Department reports data on an “annualized” basis to make it easier to compare; so, if you looked at it quarter-over-quarter, the economy lost 9.5% since Q1.5

That’s still an eye-watering blow to the economy, but it’s not an apocalypse.

The largest contributing factor to the economic losses was a steep drop in personal spending, particularly on services, which makes complete sense in a shutdown.6

Three points before we move on:

  1. This is an advance estimate for Q2, and we will see revisions as more data is finalized.
  2. Though this is the sharpest drop in the shortest time in history, it was caused by the shutdown, and we’re already climbing out of it.
  3. 63.8% of economists think Q3 is when we’ll see the recovery really pick up steam, and the current forecast is for 15.2% annualized growth this quarter.7

So, what’s up with markets?

I think markets are being driven by a few big trends.

In a previous note, I mentioned what a Nobel-laureate economist calls “FOMO mania” by investors who fear missing out on the bounce. I think that’s still in effect as investors continue to pile into stocks, especially in the tech sector.8

I also think the market is being supported by massive government spending and Federal Reserve intervention.

And thirdly, I think a lot of traders are betting heavily on the recovery. If states have to shut down again, the collective delusion may collapse and trigger a correction. We’re watching for that.

How long will the rally last? That’s anyone’s guess. I’ve seen many cheerful forecasts predicting new all-time-highs. I’ve also seen plenty dolefully predicting the next crash.

With so much unknown, they’re all guesses. Even in less-murky circumstances, the market gurus are only accurate about 47% of the time.9

So, since we can’t predict what’s going to happen in Q3 and Q4, we’re staying agile and focusing on the fundamentals of good planning.

I know, it’s a really boring answer. But that’s how we give ourselves the best opportunity for success in chaotic times.

Let’s talk about you.

How are you doing?

What kind of decisions are you making right now?

Can I help?

P.S. Apple recently announced a four-for-one stock split.10 Here’s what that means: Stock splits are “cosmetic,” meaning they don’t change anything fundamental about the company. Splits just make the stock more accessible to investors by lowering the price (like getting four quarters for a dollar). If you currently own Apple stock, you’ll receive three more shares for every share you own in late August. Have questions about it? Click on the link above and let me know.

1https://www.chicagotribune.com/business/ct-biz-us-economic-plunge-20200730-t25tj4pzdvcmrirdufstpla2nm-story.html

2https://www.cnbc.com/2020/07/30/us-gdp-q2-2020-first-reading.html

3https://www.wsj.com/articles/us-economy-gdp-report-second-quarter-coronavirus-11596061406

4https://www.newyorkfed.org/research/policy/nowcast

5https://www.washingtonpost.com/business/2020/07/30/did-third-economy-really-vanish-just-three-months/

6https://www.cnbc.com/2020/07/30/us-gdp-q2-2020-first-reading.html

7https://www.wsj.com/graphics/econsurvey/

8https://www.cnbc.com/2020/07/28/paul-krugman-sees-mania-by-stocks-investors-driven-by-fomo.html

9https://www.cxoadvisory.com/gurus/#aggregate

10https://www.cnbc.com/2020/07/30/apple-just-announced-a-stock-split-heres-what-that-means-for-investors.html

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.