Happy Fall!

August 22, 2022

Happy Fall!  I finally stopped saying “I love summer” or “I love fall” because I realized I don’t have a favorite; what I do love is the change from one season to another.  I’m always ready for it.

The carefree days of summer have given way to a daily school routine, and the Halloween décor and pumpkin spice displays at the grocery store get me excited about the fall holidays.

In this age of online classes and Youtube videos, we have opportunities to master any subject that piques our interest, and personal investing is certainly one of them.  Building up net worth by saving and investing in the stocks of well-run, innovative companies during the working years is a no-brainer.

There is another aspect to investing, the behavioral aspect, and that is where individuals can find great value in working with a trusted professional.

Over the past 24 years I’ve observed that investor behavior is the number one predictor of financial success.  Did the financial crisis of 2008 destroy the retirement savings of many investors like some sentient villain, as has become lore?  No, we have to look to the specific actions taken on the part of the investor to find the culprit.

The forces that act on our emotions, that storm past our “smarts” and right to our deep need for security and peace aren’t as easily understood, much less mastered.  That is why the advisor as a behavioral counselor can be so valuable year after year. 

We all know that buy high, sell low is NOT the formula for investment success, so why is the opposite so counterintuitive, and so difficult to stick to without guidance?

We know tough times will come, it’s a reliable cycle.  Difficult times for the country, the economy, even the globe, and our investments will feel the impact.  You wouldn’t be human if you didn’t question yourself and the decisions you’ve made during these times. 

Impersonal advice and alarming predictions from salespeople and the media do not help us think clearly.  The only fear that should motivate an investor is a healthy fear of outliving your financial assets.   

At this point you might be thinking, why is Rachel focusing on years that the market has had a negative return?  The S&P 500 index has provided positive returns to investors 71 out of the last 96 years, and has averaged 10.5% annual returns over that time.* 

A plan-based investment portfolio has provided countless people with the purchasing power they need to accomplish their long-term goals.  Why dwell on negatives? 

I would respond that easier times are, well, easy.  Helping people maintain a long-term perspective during more challenging times can be enormously consequential to their success.  Let’s all look forward to the joys the next season will bring.

  *Source: Ibbotson Associates

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. Reference to markets is an index which is unmanaged and may not be invested into directly.

Securities and Retirement Plan Consulting Program services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. Investment Advice offered through Western Wealth Management LLC, a Registered Investment Advisor. LPL Financial, Kennebec Wealth Management LLC and Western Wealth Management LLC are separate entities.