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Improving Investor Behavior: The Price of Time

Note

This article originally appeared in the Denver Post, September 15th, 2019.

In previous articles, we’ve discussed time as our most valuable asset. With only 1,440 minutes per day, how we choose to spend our time and where we focus our attention deserves the same rigorous budgeting that managing money does, perhaps even more so. Money is a resource; there can always be more of it. But time is finite, and there is no getting it back once it’s gone… or is there?

There’s a well-known quote by American author H. Jackson Brown that goes, “Don’t say you don’t have enough time. You have exactly the same number of hours per day that were given to Helen Keller, Pasteur, Michelangelo, Mother Teresa, Leonardo da Vinci, Thomas Jefferson, and Albert Einstein.”

But I want to challenge the notion that we all have the same amount of time each day. Think about it like this: I doubt Michelangelo had to mow his yard. I bet Thomas Jefferson didn’t spend much time in traffic. And when Einstein showed up to the restaurant, they probably made a table available for him. Read more

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior: Mind Your “Owned” Businesses

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This article originally appeared in the Denver Post, August 18th, 2019.

What is Google worth? Most finance people would look up the share price, about $1,100 and multiply it by the number of shares to find what the company is currently “valued” at – about $790 billion. But does value always equal precisely what a company is worth?

If Google were to go out of business tomorrow and have a fire sale, offering up everything they have from patents to buildings, desk chairs to web servers, the total output would be significantly less than $790 billion. Likewise, if they were to announce a fully autonomous car, the value of the company could go up, likely by a significant amount.

The “worth” of a company goes beyond what it is presently priced at, to what the price could be in the future. Investors look at a company, say to themselves, “I like what they’re doing, and I expect them to grow in the future,” so they invest. They factor in a mix of intangibles: prospects for growth, risks, market conditions, and even a dash of hope, then decide to purchase a piece of that company. Collectively these purchases form the current share price.

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Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior: Retire to What?

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This article originally appeared in the Denver Post, June 16, 2019.

If I asked you to define retirement, how would you describe it? Take some time and think about it. You’re probably envisioning white sandy beaches, trips to the golf course, and visits with family, free from the constraints of work and email. Sounds nice, right?

That’s how a lot of people see retirement. The belief is that upon reaching a certain age (usually around 65), retirement should be an expectation – a foregone conclusion. And once retired, people will get to enjoy “the good life” of unlimited freedom, time, and fun.

But when I’m asked to define retirement, I do it a little differently. I think back to 1996.  Read more

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior: The Positive Mindset of Investors

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This article originally appeared in the Denver Post, May 19, 2019.

Pessimism is poison for investors. Following national headlines would have you

believe we are moments away from catastrophe, teetering on the edge of sheer doom. It’s an easy narrative in which to engage, especially when we hear it every minute of every day. The problem is that repetition often convinces people, and once convinced, people tend to ignore logic. That is poisonous for investors.

If you’ve been following this column, you understand just how damaging emotions can be when it comes to investing. Emotions cloud judgment, muddy decision making, and create stressful situations. Now I’m not going to tell you everything in our world is great, but the reality is things are pretty good. Our world is arguably better than it has ever been.    Read more

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior – Managing Your Time Like Money

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This article originally appeared in the Denver Post, April 21, 2019.

As a financial advisor, I am typically hired by clients to help them manage their resources. Most often, these are financial resources including cash, investments, etc. Sometimes I help people to manage their business resources such as connecting professionals, encouraging action, and providing advice to help make sound decisions. But there is one resource that I help investors to consider, one that we all have, but tend to be terrible at managing.

That resource is time.

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Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior – Doubt, Sold with a Smile

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This article originally appeared in the Denver Post, March 17, 2019.

Financial advice is usually broken into three steps. First, define your goals. Where do you want to go? Next comes a plan. This is the recipe for working toward your goals with actionable and measurable steps. Then comes implementation when you start your plan.

The first two steps lay out the “What” of your financial future; the last deals with the “How.” All too often investors make it through the first steps with optimism and progress, only to be led astray with the last. This is when experts, products, advertisements, advisors, and everyone else in the financial world tell you their way is best – and all the others? Well, they just don’t measure up.

Of course, this leaves investors with a problem. Who can you trust? Read more

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior – Learn to Love a Falling Market

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This article originally appeared in the Denver Post, January 20, 2019.

The financial markets have given investors quite a ride in the past few months. Not only have we seen a drop in the prices, but the volatility and multiple-percentage point days seems to have investors feeling a little seasick. The first thing queasy people want to do is to get off the boat.

This is precisely the wrong thing to do, and here’s why. Thinking fluctuation is bad for investors is an incorrect perspective. Volatility is the stock market’s way of redistributing shares of great companies to their rightful long-term owners. When markets fluctuate as they have in recent months, it is nearly impossible to divorce yourself from the emotional powers of fear and greed. The price per share does not matter unless you are buying that day, or selling that day. Other than some “entertainment value.” daily fluctuation should be ignored.

“What makes stocks valuable in the long run is not the market. It is the profitability of the companies you own,” said Peter Lynch in Worth Magazine in 1995. I agree with him. Over time, as corporations become more valuable, sooner or later, their shares will sell for a higher price. Our contention is you need to remember you own a piece of successful, profitable companies. Read more

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior – Focus on the Right Number

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This article originally appeared in the Denver Post, December 16, 2018.

With the year coming to an end, 2018 has been a tumultuous one for investors. For the first time in 46 years, there has not been a clear winner in any asset class: from stocks to bonds, emerging markets to precious metals. As of this writing, none are on track to generate a better than five percent return according to a recent article from Bloomberg.

With all the attention focused on performance and prices, little appreciation goes to what we believe is a most desirable outcome for investors: income. Why do most people invest? Income. Whether you need that income today or tomorrow, most people invest with the belief that doing so will provide, maintain or improve their income. Read more

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior – Managing the Pain of Regret

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This article originally appeared in the Denver Post, November 18, 2018.

Regret may be the most enduring and damaging emotion investors grapple with during their financial lives. As financial advisors we see it from both sides: clients either regret having done something, or regret NOT having done something, or more often, both. Like a cancer, regret can crawl into all facets of your financial life and encourage you to make bad decisions. All too often, it’s successful.

What is regret? The way I see it, regret is the revisitation of past mistakes. Maybe someone hit the panic button as the market dropped, only to watch investments rebound in a short period. Perhaps they jumped out at a good time, but couldn’t decide on a “right time” to jump back in, missing out on would-be gains. Investors watch themselves do this over and over each time saying they won’t do it again. Then, when they inevitably do, the regret only deepens. This vicious cycle can pour over into other areas of life. How often have we heard the stories of someone betting their life’s savings just to have the outcome bounce the other way? Read more

Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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Improving Investor Behavior: Managing Your Fears

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This article is set to appear in the Denver Post in about one week. We felt it was worthwhile to share with our clients now, given the events of the past few days.

Shark Week is among the longest running and most popular cable programs in history. First appearing 30 years ago in 1988, the show has since been watched and celebrated by millions. Why would a program about sharks and their danger be so popular? I think it plays on the emotion of fear, and more interestingly, people’s desire to be a little bit scared.

This is quite the paradox: some people enjoy engaging in an activity designed to make them uncomfortable. The same can be said for horror movies, especially at this time of year. In both circumstances, however, the fear is often wholly unfounded. Sharks are responsible for about six deaths per year, and I highly doubt zombies will be taking over the world anytime soon. Instead, people should be much more afraid of mosquitos with their death toll last year of more than 830,000 people.

My point is this: sometimes our greatest fears are the most unfounded. Whether it’s an oversized fish or monsters under the bed, our worst fears take up an oversized portion of our conscious and drive actions that can be damaging and counterproductive. Fear is a powerful emotion and one you must learn to rein in if you want to be a successful investor.

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Steve Booren

Steve Booren

Steve Booren is the Owner and Founder of Prosperion Financial Advisors, located in Greenwood Village, Colo. He is the author of Intelligent Investing: Your Guide to a Growing Retirement Income and a regular columnist in The Denver Post.

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