“Is your glass half empty or half full?” asked the mole.
“I think I’m grateful to have a glass,” said the boy.”
― Charlie Mackesy, The Boy, the Mole, the Fox and the Horse
We celebrated United States’ independence at Riverbend on July 5th with a potluck office lunch. I always bring doughnuts.
I went through the drive-through at Dunkin Donuts. “Everybody” was in line. Must have been 10 to 12 cars deep. Inside was empty, so I parked, went inside, got doughnuts, and left before the line moved 4 spots.
What is the financial lesson here? Let me share with you a story…
Two people: let’s call one, Fast Eddie and the other, Steady Eddie.
Steady Eddie has a diversified investment portfolio and a holistic retirement plan designed for his specific goals. Some parts of his investments did well and others did not, but he stayed the course. He focused on his family, his retirement, and his best life.
On the other hand…
Fast Eddie said to me in 1999 “everybody is making money but me.” What he really meant was that his diversified investment portfolio did not have 100% of his money in the top performing sector, which was internet stocks at the time. But “everybody” else did.
In 2003, he was not making any money. From 1997-2003, he did not make any money. I found that strange because Steady Eddie got around 6% average return. I looked at Fast Eddie’s notes. He sold all of his value stocks (lowest performing at the time) in 1999 and bought internet stocks, then sold out at the bottom of the dot-com bust in 2002.
- “Everybody knew” the internet was going to change the world and it did. But not every stock made money. In fact, many went bankrupt.
- In 2005, “everybody knew” real estate was a good investment — “they aren’t making any more of it” was a popular refrain. As a result, many people became over-leveraged and went bankrupt.
- In 2008-09, “everybody knew” there was a Global Financial Crisis, yet the stock market went on one of the greatest 10 year runs in history. (See chart below)
- With COVID, “everybody knew” we’d go into a recession and might never recover, yet the S&P went from being down 34% at its lowest point in 2020 to up 114% at the end of 2021. (See chart below)
- “Everybody knows” the drive-through is faster, so they miss the empty store 10 steps from their car. All they have to do is park and walk in.
Everybody may accurately predict the news or events, but they have no idea how the investing world will react to that news or events.
Know the winds can change. Be flexible and have a cash cushion.
It is ok to ask for help…
“What’s the bravest thing you’ve ever said?” asked the boy.
“Help”, said the horse.”
-Charlie Mackesy, The Boy, the Mole, the Fox and the Horse
Would you like some help to make sure you are on the right track financially? We are flexible…you can email me at Jeremy@Riverbendwm.com or click here to set up a phone appointment.
On the lighter side, Elliott got in a car wreck last week. He is ok. The front of his car was flexible folding under, and the airbags were a cushion, saving Elliott from major harm. Sometimes being soft is being strong…
Hope all is well with you and your family,
P.S. To put things in perspective, here is a link to the first images of the James Webb Space Telescope. Some images are below.
P.P.S Click here for the Retire Happy Podcast Ep. 3 Season 2, What it is like to be a client of Riverbend Wealth Management.
Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information. My intention is to share principles, so that you will have more clarity and peace, that help you make better financial decisions.
Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor; DBA Riverbend Wealth Management.
This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.