Brexit – What Is It and What Should I Do?

All the news about Brexit reminds me of how the media spins stories, how bad investor behavior can cause investors to hurt themselves, and how wise investors should be grateful for volatility. It reminds me of the uncertainty in 1987, when financial markets fell “due to computers”. Brexit, Ebola, Sarin, you name the scare – volatility can create opportunity for wise investors.

That brings us to the latest panic: Brexit. The real question is what does it mean, how will it impact me, and what should I do?

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The 3 Principles of Retirement

There are millions of words written every day about the economy, the direction of the financial markets, investment advice, and so on, yet no other topic gets as much attention as the concept of “retirement”. When you think about it, it should get attention.

Investors spend their entire working career saving and planning for this phase in life. While we prefer the phrase, “making work a choice” (no one likes thinking about reaching the end of their usefulness) we know many people struggle to understand key issues of retirement. So today we want to cover three main areas.

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The More Things Change, the More They Stay the Same

To celebrate my 60th birthday my team gave me an incredible gift, a book of New York Times front pages from each of the past 60 years. A great gift indeed, but also a reminder of the words from Jean-Babtise Alphonse Karr, “The more things change, the more they stay the same.”

Indeed, the more we think things have changed, the more we are reminded they are the same.

Reading through the headlines of the past 60 years I was struck by the familiarity of the messages. Frankly, I thought the headlines were from just yesterday, not five or six decades ago. The patterns seem all too familiar:    

  • The media openly criticizing and bashing the president
  • Muck-raking political journalism (does this sound familiar in today’s political season?)
  • Hand wringing over the unemployment rate, and welfare beneficiaries not willing or interested in work
  • Negative comments related to business trade with countries we may not be friendly with such as the Russia
  • European economy in a slump
  • Israel peace talks
  • Testing of atomic blasts
  • Enemies firing at our naval vessels (Russian MiGs firing at naval boats near Cuba)
  • Embassy bombings

Another way of phrasing this point: history repeats.

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Social Media – Helping or Hurting Your Investment Behavior?

During a recent client meeting we ended up on the subject of social media, and the effect it can have on a business. Unfavorable press coverage led to an echo of bad news on social media among this client’s customers, and it was continuing to harm his business with no end in sight.

I was curious about the public’s persistent reaction, and why he believed the story was still in the news cycle many weeks later. Was his customer base being fickle? Were competitors spreading false and redundant stories? His response: social media. Once a key marketing strategy for his company, social media has quickly turned into a sore spot.

He explained that as the public hears about small incidents, they turn to social networks to share the information, which is then amplified and repeated, creating a snowball effect. Suddenly isolated incidents create nation-wide panic. The small problems become bigger than expected and a stampede occurs.

As a financial advisor I started thinking about how this applies to investors. Consider both DIYers and new investors, those who are not deeply grounded, long-term, experienced investors. Could social media be driving investors toward short-term thinking? Could it be the volume and loudness of media in general? Could this be pushing investors to make choices detrimental to the longevity of their wealth?

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Scam Alert: Courtesy of Cary Johnson

IRS Scam Alert

Government Agencies will not contact you via telephone or E-mail to settle an outstanding issue, including any payment or fee!

The IRS scam calls have never gone away. Now, however, the calls are supposedly coming from the U.S. Treasury Department or your Sheriff’s Office. These calls are from scammers, mostly calling from outside the United States, who rout the call through a U.S. Area Code to add legitimacy and fool consumers. They are meant to frighten and scare consumers into acting compulsively by providing a credit card or buying a ‘Green Dot’ money card to make an arrest warrant go away or avoid a court appearance.

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Progress in 5’s

I think daily minutia often blurs our capability to see the remarkable progress humankind has and is making. If we take a moment to think back 40 years, back to the time many of you started investing for the first time, we’ve seen tremendous advancements across the board. From energy to medicine, transportation to communication, or any one of a hundred other fields, advancement had been astounding.

But as investors it’s important to see the forest through the trees. So let’s break it down and consider a few special years – years that end in five.

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Outlook 2016: Embrace the Routine

LPL Financial Outlook 2016

LPL Research expects to see routine year-end outcomes in many areas of the economy and financial markets in 2016, but how we get there may be anything but routine. Certain conditions have been unusual for so long, that 2016 may hold some unexpected turns that could catch some investors unprepared, and it will take a solid investment plan to navigate it.

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