Blog
Year-end 2012
Year-end is often a time of reflection and gratitude. Recent events make that difficult, but not impossible… The Sandy Hook tragedy makes our hearts ache. But, our hearts will not break, having seen the overwhelming response to the victims’ families and the possibility of the positive changes which may result from the experience. WealthStep’s mission is to influence and facilitate positive changes in the lives of our clients and in…
Quarterly Thoughts – Q3 2012
What does “safe” mean? When driving car or playing baseball, the answer is generally clear. When investing, the answer is less obvious. To get where you want to go financially, it is critical to properly frame the problem, by asking the right questions: safe “from what risk?” and “when?” Safe from volatility risk? Or interest rate risk? If so, at the expense of inflation risk (i.e. purchasing power)? Longevity risk…
Quarterly Thoughts – Q2 2012
Are you in the panic group or the profit group? Often times, the discomfort of sea or motion sickness can be avoided or reduced by keeping one’s eyes on the horizon. Similarly, keeping a long-term focus can reduce “emotion sickness” of the investor kind. Anticipating and managing such discomfort is paramount, because an investor’s ability to focus on the goal rather than on short-term disturbances can impact the timing and…
Quarterly Thoughts – Q1 2012
Are you taking the right or wrong risks? Inflation is one of the various and worst risks investors must consider in the long-run. Inflation is currently lower than historical averages due, in part, to the slow economic recovery. However, the prices of goods and services tend, eventually, to rise after a period of eased or stimulative government “monetary policy,” such as we have seen in recent years. Regardless of short-term…
Quarterly Thoughts – Q4 2011
Instincts are sometimes critical for survival. If you experience fear of physical danger, your instinct may be what saves your life or the life of others. Before you’ve had time to think, fear triggers an automatic response that may cause you to run, duck, jump or fight. Unfortunately, an increasing number of behavioral finance studies show that instinct and investing often mix poorly. The human brain often responds to concern…
Quarterly Thoughts – Q3 2011
By the first half of 2011, after a post-crash jump in investment prices, many disciplined investors felt a material level of financial and emotional recovery from the 2007-2009 credit crisis market. The third quarter of 2011, however, was a reminder that the bumpy road to full recovery is not yet over, as the world slipped on Greece (how about that pun!?). Small economies can sometimes be the tail that wags…
Quarterly Thoughts – Q2 2011
Who is on your side? Insightfully, when asked what his profession was in the 1979 film “Manhattan”, Woody Allen’s character responded, “I’m a stock broker. My job is to invest people’s money until it is all gone… I’m frequently wrong, but never uncertain.” Sadly, most investors still aren’t clear about the difference between securities salespeople, i.e. “brokers” or commission-based or fee-based “advisors” (i.e. accepts fees AND commissions, unlike fee-only advisors),…
Quarterly Thoughts – Q1 2011
“The only certainty is that nothing is certain” ~ Pliny the Elder, First century Roman. Despite major unrest in parts of Northern Africa and the Middle East, a massive earthquake, the subsequent tsunami and partial nuclear meltdown in Japan, renewed sovereign debt concerns in Europe, and continuing inflationary pressures in certain emerging market countries, the global economic recovery pushed on. If recent events teach us all anything, it is that…