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Friday thoughts - January 19, 2018

It seems like 2018 is coming in like a lion for me. Maybe it just feels that way because of the crazy weather?! It's actually two reasons - 1) The tax law changes and 2) Business is off to a good start to the year. 


I'm getting a lot of people asking about investing recently due to the stock market returns they're seeing or hearing about. There seems to be a renewed interest by people who have shied away over the last decade or so. Maybe they lost money in 2008 and swore they would never invest in "the stock market" again. Or maybe they heard stories from friends or families about losing big when the tech bubble burst.

Now, though, they're seeing reports of impressive gains over the last few years, especially since late 2016, and they're forgetting those reservations. Or they're hearing from coworkers at the water cooler about the 401k gains they saw last year and they wonder why they didn't see the same. 

If we haven't already, this is the perfect time for us to talk. Or, if you have friends or family that are talking about investing on their own, have them call me first.

There are many factors that drive the returns that you see on your investment statements. Research has shown that asset allocation is the most important factor in a portfolio's return. And things like security selection and how the portfolio is constructed matter. But all of that pales in comparison to the importance of behavior patterns on an individual's returns. 

Too often people want to "jump into the markets" when everyone else is. By doing so, they wind up buying when things are expensive. Instead, we should all remember the old saying - buy low and sell high.

Dalbar, Inc. has been studying investor returns for 20+ years and their research has found that the average investor does not see the same returns that were on par with general market indices, largely due to this behavior - buying when things are expensive and getting out after it has gone down.

I'm not suggesting that markets are soon going to drop like in 2000-02 and 2007-2009, but stocks are priced on the high end right now. And with interest rates already going up this year (more on this next week), NO ONE knows how this will play out as the year unfolds. It's more important than ever to understand your risk tolerance and be sure that your investments are aligned. That way, you are prepared when the markets go up, but more importantly, you're not scared when they go down.

A good advisor will help manage these behavioral reactions by looking at your personal situation and be sure that you are in a portfolio that will work for you today - and tomorrow. Not the co-worker with the big gains in the 401k last year. Not the family member who bet on tech stocks in 1998. And not even you, ten years ago. 



I mentioned a few weeks ago that some exciting changes were happening in our family. In 2016, Nancy Lee started talking about the idea of doing some consulting work on the side to help small businesses with their social media. I loved the idea and even bought her a laptop for Christmas. But things came up and that idea sat on the proverbial shelf. 

Just before Thanksgiving, she was told that the church where she worked was going to be doing some rearranging of jobs and responsibilities and that her position was being eliminated as of January 1st. So the consulting idea was brought back to the forefront. After much thought and prayerful consideration, Sword Lily Marketing, LLC was born. She will be helping small businesses whose owners don't have the time or expertise to manage their digital marketing like social media and website. You can learn more at www.swordlily.net

Axis Wealth Planning is her first client and you should be seeing some more from me on Facebook and LinkedIn. She's also trying to get me to get on Twitter. There will also be more updates on my website and I hope to be adding some neat new tools soon.

If you haven't already, please like Axis Wealth Planning on Facebook. Also of note, Facebook is changing their algorithms again. In order to see posts from me, you can do this  - On your phone app go to the three lines icons on the bottom right or top right --> Settings --> Newsfeed preferences --> Prioritize who you see first --> Select Axis Wealth Planning. If you're on a desktop, Newsfeed preferences is found up in the top corner under the downward pointing arrow. 

And if you know any business owners, pass along Nancy Lee's contact information. She can help them analyze their marketing goals and craft a plan to meet them. She's can be reached at 803-236-4851.


I hope that we're done with snow for this winter. I love my children, but I'm ready for them to be in school for a regular week!