“Take it all in…it’s as big as it seems. Count all your blessings. Remember your dreams.”
Avoiding Investing Missteps
Nobody wants to make investment mistakes. And yet, we’re human; mistakes happen. Here’s how to minimize the ones that matter the most, and make the most of the ones that remain.
Bad Decisions v. Bad Outcomes
First, let’s distinguish between the concepts:
Investment mistakes arise from flawed decisions, irrespective of whether the result is positive or negative.
Bad decisions are the ones a rational investor would not make. For example:
- Lack of Diversification: Putting all your eggs in one basket by concentrating on a limited number of securities rather than broadening your exposure across many investments and asset classes.
- Mistaking Speculation for Investment: Chasing fleeting market trends instead of structuring your total portfolio to capture expected market growth over time.
- Mismatched Risk Appetite: Investing in a manner that’s either too conservative or too aggressive for your financial goals and risk tolerances. Overlooking Investing Costs & Taxes: Not being vigilant about fees and taxes can erode potential long-term returns.
- Falling for Behavioral Traps & Biases: Relying more on instinct than informed judgment, allowing emotions to overshadow rational decision-making.
These common investment mistakes share a recurring theme: By making wise decisions about that which you can control, you can best prepare for that which you cannot.
Risk Mitigation in Action:
Take car insurance, for example, which blends manageable decisions with unpredictable perils. From sudden hailstorms to unexpected hit-and-runs, misfortunes happen. While these incidents aren’t a result of your negligence, they aren’t mistakes you made either. But you insure against them anyway since they can still generate a substantial loss.
Similarly, you take proactive measures to avoid mistakes within one’s your control. You don’t drive under the influence. You maintain your car. You follow traffic laws. While these prudent actions don’t guarantee absolute safety, they significantly increase your likelihood of being accident-free.
As an investor, you can take a similar approach:
Mistake-free investing does not guarantee success. Rather, it improves your odds for happy outcomes, while softening the blow if misfortune strikes.
It’s worth noting, even if you make all the right investment decisions for all the right reasons, random misfortune can still strike. If it does, it would be a mistake to decide your prudent investment strategy was to blame. It would be an even worse mistake to abandon that strategy because you’ve encountered the equivalent of a market hit-and-run. This would be like dropping your insurance coverage because it didn’t prevent the accident to begin with.
The Upside of Making Investing Mistakes
“I’ve failed over and over and over again in my life.And that is why I succeed.” – Michael Jordan
As just about any star athlete will tell you, the path to success is paved with errors. The same can be said about investing. The occasional misguided decision may even be good for you as an investor—especially if it’s made when the stakes are smaller and time is on your side.
The point is, if you’ve made investment mistakes in the past, don’t beat yourself up over them, or make more mistakes trying to “fix” the past (such as deciding you’ll never invest again after being burned by the market). Often, your best move is to identify which investment mistakes were involved, embrace the lessons learned, and give yourself permission to move on.
Admittedly, if you made an investment that didn’t pay off as you hoped for, it may be hard to know just what went wrong. Was it you, the whims of the market, or both?
As financial advisors, one of our primary responsibilities is distinguishing between genuine investment missteps and market-driven anomalies so you can move forward with renewed confidence. Sometimes, this means adjusting your portfolio to reflect evolving personal financial goals. More often, it means convincing you to stay the course and reassuring you of your already solid plan. Either way, your journey is ongoing. Let us know if we can help you make the most of your next steps.
Dissecting Labor Market Trends
By Schwab Market Perspective
- The revision tally for private sector jobs was -358k. Payroll gains have clearly decelerated; with 2022’s monthly average of nearly 400k in contrast to the past three months’ average of 150k.
- The services sector continues to have the strongest payroll gains—with last month dominated by education and health services.
- Temporary layoffs ticked up, but have largely been moving sideways for more than a year.
How The Highest Real Yields Since 2009 Affect Investors
- Real long-term Treasury yields are at 14-year highs.
- The expected inflation rates implied by TIPS have declined.
- Stocks are more expensive relative to bonds as rates rise.
TD AMERITRADE TO SCHWAB TRANSITION:
Welcome to Schwab
As of Tuesday, September 5, your TD Ameritrade accounts are now at Schwab. If you’ve set up your new Schwab login info, there’s nothing else you need to do.
To Create Your Schwab Alliance Login:
I f you still need to create your new Schwab Login ID and password, have your Schwab or TD Ameritrade account number handy and click the link below or copy and paste it into your browser: https://client.schwab.com/Login/SignOn/CustomerCenterLogin.aspx?&kc=y&sim=y
- For questions or assistance with web activation, please contact our office by calling 561-650-8061 or emailing firstname.lastname@example.org. You can also contact the Schwab Alliance team at 800-515-2157.
- Please know that current waiting times are longer due to the volume of new Schwab clients establishing credentials.
- If you are not ready to establish your Schwab credentials but want to verify your accounts are where they should be (they are) and have access to our Orion Client Portal, you can always access your accounts and performance there. Please let us know if you need help accessing the Orion Client Portal.
- If you would like to continue paperless document delivery, you must set up your Schwab login info to keep receiving your statements and tax documents electronically.
Get ready to use Schwab.com and the Schwab Mobile app by accessing our learning resources, including how-to videos, online guides, and live webcasts with Q&A.
The Forum Club of the Palm Beaches
For over four decades, The Forum Club of the Palm Beaches, a non-partisan political and public affairs organization, has welcomed a parade of illustrious speakers, including former Presidents, U.S. Supreme Court Justices, and influential thought leaders whose words and deeds shape our world.
As a proud supporter, Mariaca Wealth Management is delighted to sponsor a table for our local clients and friends at these events. Kindly note that seating is limited and available on a first-come, first-served basis. If you’d like to attend a particular luncheon, please reach out to Victoria, at email@example.com.
Upcoming Forum Club Events:
U.S. Congressman and Chair of the January 6th Committee, Bennie G. Thompson
Monday, October 2, 2023 at 12 p.m.
Former Congressman and CNN Political Commentator, Adam Kinzinger
Tuesday, October 24, 2023 at 12 p.m.
Back By Popular Demand
We’re thrilled to have Weston Wellington, Vice President with Dimensional Funds and a distinguished market historian as our special guest speaker at our upcoming October client event. After hosting Weston in 2017 and receiving overwhelmingly positive feedback, it became evident he needed an encore.
Back in 2006, when I was considering Dimensional funds, Weston significantly influenced my choice. For years, he penned an annual article drawing comparisons between analysts’ forecasts and the actual year-end results. The consistent message was evident: the predictions of economists and Wall Street analysts are as reliable as those of astrologers, warranting a healthy dose of skepticism.
Let me be clear: I believe it’s imperative to be well-informed about critical matters like finances and investments. However, hanging onto the short-term forecasts of economists or analysts isn’t the way to do this.
Mariaca Wealth Management Annual Client Shred Event Featuring Special Guest Speaker Weston Wellington, Vice President of Dimensional Funds
When: Wednesday, October 18th
Where: Hilton – West Palm Beach | 150 Australian Ave. West Palm Beach, FL
Time: 6 p.m. to 8 p.m.
About Wes Wellington:
Weston Wellington has accumulated over 40 years of experience in the investment industry. He serves as the Vice President of Dimensional Fund Advisors and is one of the firm’s most engaging speakers, helping to shed light on the firm’s unique evidence-based approach to investing. Weston stresses how an equilibrium-based investment strategy may be a good way to pursue investment success and why investors are unlikely to hear about this approach from the usual sources of financial advice. Weston also is an accomplished writer whose column, Down to the Wire, appears regularly on Dimensional’s client website.
Prior to joining Dimensional in 1995, Weston was director of research at LPL Financial Services, Inc. He holds an MBA from the University of California, Los Angeles, and a bachelor’s degree from Yale University.
The Forum Club of Palm Beaches Presents U.S. Senator Marco Rubio:
When: Wednesday, October 18th
Where: The Kravis Center: Cohen Pavilion
Time: 12 p.m. to 1 p.m. (Doors open at 11 a.m.)
For over 40 years, The Forum Club of the Palm Beaches, a non-partisan political and public affairs organization, has hosted speakers from former Presidents, U.S. Supreme Court Justices, and thought leaders whose words and actions affect the world in which we live.
As a supporting member, Mariaca Wealth Management sponsors a table at these events for our local clients and friends.
Limited spots are available, and seats fill up quickly!
SMART MONEY MATTERS:
The year is zipping by! But, hey, realizing we’re halfway through isn’t all bad. It’s an excellent opportunity to evaluate our progress and refocus our efforts for the remainder of the year. So, how are you doing with your 2023 financial goals? Here is a mid-year financial checklist to help ensure you are on track.
- You are sticking to your budget.
- All of your financial accounts have beneficiaries.
- Your estate plan is current, and your beneficiary designations, personal representative & trustee appointments are accurate.
- Don’t forget your living will and healthcare surrogate.
- You have automated bill paying and savings set up.
- You are keeping track of your ‘bucket list’ goals and making plans!
Currently Employed Checklist:
- You are sticking to your budget.
- You have an emergency fund (3-6 months)
- Retirement contributions are on track.
- College savings is on track.
- HSA contribution goals are on track.
- You have set-up automated bill paying and savings.
- Your beneficiaries are up to date.
- All financial accounts have beneficiaries.
- You and your family are protected with adequate disability & life insurance.
- You are making progress in reducing your debt as planned.
If you’ve been crushing your goals like a champ, kudos! Keep doing what you’re doing. But if you’ve slid off the path a bit and haven’t been sticking to your plan, remember, there’s no time like now to get back on track. Don’t wait another day to get started. Trust me, there’s nothing like that feeling of knowing you’re making real progress on your goals.
If you need any help, please let us know.
Halftime Report Webinar with Economist Fritz Meyer
This webinar will cover the latest data on:
- Federal Reserve actions and outlook
- The jobs situation
- ISM Purchasing Managers Index
- Inflation measures
- U.S. debt situation
- Household balance sheets
- Consumer income and spending
- Retail sales
- Housing starts
- Consensus forecast For The Quarterly WSJ Survey
- Latest GDP Now forecast for Q2 2023 GDP
- M2 and the liquidity picture
- And, much more…
Recently, our good friend, economist Fritz Meyer joined us for another insightful annual Halftime Report Webinar on July 12. During the webinar, Fritz put the current financial and economic numbers into perspective, comparing them with past records, and discussed how certain economic metrics, like the LEI, can become outdated because the economy is constantly changing. Fritz didn’t stop there, though. He also reviewed some reliable, time-tested indicators like the Federal Reserve’s stock valuation, price-earnings ratios, and other key metrics to help us understand where we are right now and how things might shape up in the near and distant future.
Introducing Coach ‘Me’ and the Mariaca Wealth Somethings!
This year, my son Joaquin wanted to try soccer, but when Andrea tried to sign him up, we found out there was a waiting list, making it unlikely he could participate. I was crushed for him (and me) because I like to expose the kids to new things – especially when it’s their idea. But, not one to give up easily, I inquired if coaching or sponsoring a team would help, and it did! So, I’m coaching a U-8 soccer team sponsored by Mariaca Wealth. Dana and her husband Todd are also coaching this year for their boys, Parker and Jack. We look forward to an exciting fall soccer season, valuing teamwork and fun!
Our Weekly Wave is all about giving you good insights and valuable information. While we’re good at managing wealth and financial planning, please remember; this content is for informational purposes only and is not legal, tax, investment, financial, or other professional advice. So while we hope to provide insightful and helpful knowledge, please don’t take it as official guidance.