Some financial firms probably need to do a better job of communicating with investors to ensure they know exactly what is happening in regards to their ﬁnancial plan or how the ﬁnancial plan takes into account the potential volatility in the market and its impact on their portfolio. What investors are not prepared for is the hyperbole and prognostication of ﬁnancial articles that portray the ﬁnancial firm at fault for stock market returns and the dismal state of the economy.
If we lived in a world of unicorns and rivers ﬂowing with Skittles and M&Ms, I would love to see a ﬁnancial article that takes an objective and thorough look at market returns and puts those returns in their proper context. But, that is not the world we live in. The ﬁnancial press is like some bloviating carnival barker that is seeking an audience to “come and take a look” at what they are yelling about…
The reality is the actual return of the market over the past seven months has been negative and all investors who are in the market have probably experienced loss–no matter the ﬁnancial plan or promised market beating strategy. Why? Because a ﬁnancial plan cannot predict with accuracy the returns of the market but only give investors a historic probability of returns and the probability of upside gain with long-term investing.
When one looks at the Vanguard Total Stock Market ETF (VTI), you will see that the fund had a -13.97% return from January 1, 2022 to August 4, 2022. A $500,000 investment saw a drawdown of $69,827.
So, what is an investor to do? Ignore most articles that are in the ﬁnancial media since they try to prey on investor emotions. A winning strategy that can give the investor a psychological edge is to revisit the ﬁnancial plan with their ﬁnancial planner. Doing so might help them from succumbing to the temptation to sell out and pivot to a different investment strategy and plan altogether. Listening to pundits and your gut will more than likely result in DALBAR type numbers.
As you can see from the chart above, the average investor underperforms the S&P 500 due to issues such as stock picking, panic selling, active management and much more. Don’t be the average investor, have a plan and stick to it.
If you have questions about your plan, give us a call.
Have a great weekend!
Source: Lifelong Investor
Golf Tip of the Week
Driver Swoosh Drill For Distance
The “Driver Swoosh Drill” is a popular way to get rhythm back into your swing. Take out your driver and flip it around so you are holding more of the club head rather than the handle. Take a normal swing a few inches from the ground and listen for that “swoosh” sound. The swoosh should happen at and just after impact. If you hear the swoosh anywhere else in your swing, there is a chance your hands are taking over, which is not what you want. Keep your hands very light. The right rhythm is a huge factor in a golf swing — you can’t get too quick with it, your body can’t move that fast!
Tip adapted from golftipsmag.comi
Recipe of the Week
Whiskey & blackberry lemonade
- 1 tsp aromatic bitters
- 24 frozen blackberries
- 1 cup ice cubes
- 185ml (3/4 cup) Scotch whiskey
- 750ml (3 cups) chilled lemonade
- Divide bitters among serving glasses and swirl to cover the bases and sides. Divide blackberries and ice among serving glasses. Pour over the whiskey and lemonade and serve immediately.
Recipe adapted from taste.com.auii
Health Tip of the Week
Tips to Manage Stress Eating
Have you ever felt like eating a piece of chocolate cake or a bag of chips after a stressful day at work? If so, you’re not alone. Studies show that stressful events activate systems associated with metabolism, cognition and reward.
What does this mean for your waistline? It means that the candy bar you are reaching for after a stressful event (or a series of stressful events) may be driven by a combination of physiological and psychological factors.
How does stress affect your appetite?
Studies show that women with high chronic stress levels tend to engage in emotional eating. In addition to psychological responses to stress, there may also be physiological responses. During a stressful event, the body releases cortisol, a hormone that helps the body protect itself. However, if cortisol levels are elevated for a prolonged period of time, such as during repeated and constant stressors, this can lead to increased food consumption, fat storage and weight gain.
Does timing matter?
According to a study from the Johns Hopkins Department of Psychiatry and Behavioral Sciences, timing may play a role in appetite and gut hormone responses to meal and stress challenges. (A challenge is used in research studies to see how people react to different foods or stress factors.) This study showed that the “afternoon/evening may be a high-risk period for overeating, particularly when paired with stress exposure, and for those with binge eating.” This means that your commute home or evening meal may be a time period when you have a greater likelihood to eat more than you should.
To help curb this increased chance, pay attention to snacking habits after a long day of work to help prevent weight gain. Try preparing snacks in advance to control portion size or even using a food journal to track what you eat, how much of it and when.
How can you manage stress eating?
Practice mindful eating. Know that your craving may be a result of a stressful event, and then ask yourself, are you truly hungry? Wait a few minutes before eating.
Find healthier options. If you still feel the need for a snack, consider a lower-calorie, lower-fat option than what you may have previously chosen. Here are some healthy snacks I enjoy:
- Something sweet: Cut up an apple and spread some nut butter on it. The combination of carbohydrates, protein and healthy fat should help curb your appetite and satisfy your need for a sweet.
- Something savory: Consider adding hummus to deviled eggs for a lower-calorie, high-protein snack option.
Watch portion size. Instead of taking the whole box with you, put a snack-size amount on a plate. Check the package to see what one serving size is, and try to stick to that.
It’s always a good idea to consult your doctor or a dietitian when you make changes to your diet.
Tip adapted from hopkinsmedicine.orgiii
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