Are You Checking Your Accounts Every Day? Stop it.
Does it help or harm the average long-term investor to peek at their own accounts or pay attention to the market every day?
Does it help or harm the average long-term investor to peek at their own accounts or pay attention to the market every day?
For the person who is currently contributing to a portfolio and does not need to take distributions anytime soon, this is a gift. That’s right, a bear market is a gift to those investors. If you are contributing to an investment account right now, you are already in the Bear Market Buyer’s Club.
Investing in the market is not about getting rich quick. It’s not led by FOMO, the fear of missing out. Ideally, it’s not driven by fear or greed at all. It’s patient, thoughtful, intentional and guided by a long-term vision of success.
Barbells work great at the gym because they put weight on a bar in such a way that it’s balanced, leaving room in the middle for someone to use it to workout. We often see portfolios that are designed like a barbell at the gym: lots of risk in one account and lots of cash or very short-term securities in another. In aggregate, it might produce some balance, but the reality is that it can create some real challenges.
Money is emotional and our “news” cycle is a catalyst. Investors react to what they hear and how they feel, oftentimes to their own detriment.
For anyone invested right now, it feels like we’re sinking. But just as boats have lifejackets to keep you afloat, your financial life should have its own lifejackets in place to help keep you from sinking in bear market times like these.
Money is emotional and our “news” cycle is a catalyst. Investors react to what they hear and how they feel, oftentimes to their own detriment.
For anyone invested right now, it feels like we’re sinking. But just as boats have lifejackets to keep you afloat, your financial life should have its own lifejackets in place to help keep you from sinking in bear market times like these.
In our family, we have a tradition in which, the night before our kids’ birthdays, we pause for a moment to recap the last year by reminiscing about their successes and failures. It dawned on me that these are the same feelings investors experience and learn from on their financial journeys.
Housing affordability is trending in the wrong direction. Take a look at our chart of the month showing housing affordability over the last 50 years.
"Why would anyone buy a 5-year bond at 3.5% when you could get a 1-year bond at 4%?"
"Why don't I put all my money in a 4-month T-bill and make 4.9%?"
Trying to time the market and choosing to sell in reaction to headlines tends to be a predictable mistake. There always seems to be a reason to sell.
The housing market has been hot since the start of the COVID-19 pandemic. Prices have soared and the interest rate to borrow money for those homes has been at historically low levels. But what is happening now?
Increasing interest rates have many effects, not only on the economy, but also on stocks. Given the recent rally, we wanted to highlight that rising rates do not always mean that stocks will go down. While the stock market is not making new all-time highs just yet, the market has been resilient to a regime thought to be a drag on the markets.