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3 Things 1-25


Thing One

The Chart 'Don't' Lie

As we said last week when talking about the prudence of long-term investing in stocks, the market generally goes up – no matter who’s in the oval office or the congress. In fact, the S&P 500 has gone up 31 of the last 41 years, as the chart above (provided by JP Morgan Asset Management) indicates. But it does go down too. And when it has gone down, intra-year, over the last 41 years, on average, it has gone down at least 14.3%. That’s not a warning it’s a fact. You should plan on the market going down big sometimes. But you should also plan on being in it (invested in good stocks or sensible stock funds) for the long term. Trying to time the market for short term gain is a losing proposition. One of the best analogies likens that practice to standing in front of a steam roller picking up nickels. You don't have to be a psychic to foresee how that ends. It's better to stay invested. But if the thought of knowing that the value of your investment portfolio will go down - and then seeing it do down - from time to time makes you nervous, you could always keep a predetermined amount of cash on the sidelines to take advantage of the lower prices available to you when the market drops. Let us know if you'd like our help sorting that through.

Thing Two

Got A Plan?

If you're planning to live for an extended period of time past retirement age, you should have a retirement plan. Please notice that statement wasn't qualified by any other contingency. EVERYBODY should have a retirement plan. It doesn't need to be elaborate and it doesn't need to cost lots of money to put together. But it does need to be committed to "paper" and it does need to be realistic.

Think of a retirement plan as an income plan. And think of an income plan as being built around income streams from social security, pensions, ira withdrawals, annuity payments, dividends, etc. The earlier you start to consider putting this plan together, the more time you have to make a positive impact on it. But if you're getting close to retirement, don't fret. It's better late than never when it comes to putting your plan together. If, on the other hand, you still have a ways to go before retirement or know people who do, you should remind yourself and them that there's no time like the present.

Thing Three

Just A Thought

"A farmer and his son had a beloved horse who helped the family earn a living. One day, the horse ran away and their neighbors exclaimed, “Your horse ran away, what terrible luck!” The farmer replied, “Maybe so, maybe not.”

A few days later, the horse returned home, leading a few wild horses back to the farm as well. The neighbors shouted out, “Your horse has returned, and brought several horses home with him. What great luck!” The farmer replied, “Maybe so, maybe not.”

Later that week, the farmer’s son was trying to break one of the horses and she threw him to the ground, breaking his leg. The neighbors cried, “Your son broke his leg, what terrible luck!” The farmer replied, “Maybe so, maybe not.”

A few weeks later, soldiers from the national army marched through town, recruiting all boys for the army. They did not take the farmer’s son, because he had a broken leg. The neighbors shouted, “Your boy is spared, what tremendous luck!” To which the farmer replied, “Maybe so, maybe not. We’ll see.” - Anonymous

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