Investors instinctually get on and off the train at the wrong time
There is a common assumption that average market performance and average investor performance are roughly synonymous. If the market has a good five-year run, investors have a good run. If the market is down over five years, investors, on average, lose money. However, since the market almost always goes up in the long run, a patient and diversified investor should get solid long-term results, right? That is what most believe.
The problem is that investors, on average, do not succeed in taking advantage of long-term trends. They do not approach the market in an entirely rational, wholly prudent way. Great market news excites people and spurs them to buy when prices are high. Sharp drops and prolonged downturns discourage or frighten people into pulling back and liquidating assets.
My favorite productivity coach of all time is David Allen, famed author of Getting Things Done.
When you first work with David’s concepts and materials, you think it is all about optimal levels of productivity…but you soon realize his methods also have a wonderful way of unleashing you from all the complexity and worry that often accompanies high levels of achievement.
In one of his audio recordings, he says: “Too controlled is out of control” and this immediately resonated with me. Actually, it articulated the “sweet spot” I have always aimed for as I created (and ultimately patented) Systems and Methods for Optimizing Wealth and most all of the other wealth and investment management systems, structures, support and tools I’ve created over the years. I always have heard that you can have a form of “unconscious competence” that serves you, but you can typically build upon it at an even higher level when you become aware of it and it becomes “conscious competence” – this was the case for me with this concept.
Whether you are seeking to better invest your money or seeking to be a better “depletion-resistant” wealth steward, my advice is to keep the “too controlled is out of control” insight in mind. Here are some tips:
Janiczek Wealth Management is proud to sponsor an Expert Panel on Life-Changing Liquidity Events. Experts from EKS&H, Minor & Brown, The Forbes MA Group, Business Enterprise Institute (BEI), Denargo Capital and Janiczek Wealth Management convened to share stories and best practice tips on creating “the perfect exit.”
The panel includes Joanne Baginski, CPA (partner EKS&H); Lisa D’Ambrosia, Director/Shareholder, Minor & Brown; Bob Forbes, President/Founder, The Forbes M+A Group; Joseph J. Janiczek, Founder/CEO, Janiczek Wealth Management; John Brown, Founder of Business Enterprise Institute; and Pal Berg, Co-owner of Denargo Capital. Kumar Dandavanti, Founder, Dandavanti Group is on the expert team but was excused due to overseas travel. Check out great video snippets, quotes, tips, article and an infographic at: www.janiczek.com/expert-panel/. Also includes resources from the Selling Your Business – How to Create the Perfect Exit event several of the Expert Team panel members put on in conjunction with the Denver Business Journal.
Janiczek Wealth Management has been named one of the Top 12 Financial Advisors in Denver, Colorado Springs, and Boulder (Colorado) by AdvisoryHQ. To read the full article/review “Janiczek Wealth Management – A Beacon of Light for High-Net-Worth Individuals” go to this link.
Now in our 25th-year serving high net worth investors (those with investment portfolios of $2- to $20-million) and ultra-high net worth investors (those with $20-million+ investment portfolios) in the Denver, Colorado Springs, Boulder, Aspen, Vail, Beaver Creek, Summit County and Snowmass areas of Colorado and in approximately 24 other States in the U.S.A., we our proud that our patented Strength Based Wealth Management (SBWM) and our comprehensive Evidence Based Investing (EBI) services helps to “unleash” our clients from the complexities of wealth and investing so they can flourish with their good fortune.
It’s been an annual tradition of mine to put something special together to share with clients and friends for the new year. This year, the theme is “The Big Breakthrough” and it includes three powerful tools for mastering time, focus and wealth. Watch the video presentation and download the companion worksheets below:
I was challenged by a friend to put together a compilation of the most powerful tools young and middle-aged adults (those in 20’s, 30’s & 40’s) could utilize to gain maximum traction in their careers, wealth creation efforts and mastery of wealth. The presentation went so well, I decided to go in the recording studio and create a version clients and friends could share with their adult kids, nieces, nephews, grandkids and so on.
So here it is…the Big Financial Breakthrough Video and Worksheets. Click to watch the video and download the worksheets…you are moments away from taking your wealth creation and mastery to an exciting new level.
We are all touched by terror. Our response can be to give into it (live in fear, live in hate, etc.) or lever off of it with unquenchable courage and love. Here is a link to a beautiful tribute by Antoine Leiris to his wife Helene, one of the victims in the Bataclan theatre attack in Paris:
As we approach Thanksgiving and Christmas, our heart and prayers are that we all can respond to any setbacks or evil in such a loving and courageous way.
Spending two days in New York City with Jim Collins (author of Good to Great), Sir Richard Branson (Virgin Group), Oscar Farinetti (founder of Eataly), Stephen Ritz and many other business and civic leaders was absolutely amazing. The event took place at the Lincoln Center and the theme was all about Story Makers – people who face shocks – both personal and organizational – and who use those shocks to achieve the extraordinary.
I believe one of the best ways to learn huge life lessons is to encounter other human beings and listen intently to their stories. Lessons are learned from great successes, great failures and great challenges that were overcome.
I have a learning approach I call the iMethod™ I use to maximize learning. It consists of four steps:
The risk of another retest of recent correction lows has sufficiently reduced to encourage us to go back into an overweight stock/underweight bond posture after moving into a short defensive oriented neutral position from early/mid August to early October. While our bear watch, rally watch and top watch models rarely trigger short-lived tactical stock market moves, this was the case this time.
In short, our evidence based investing discipline has encouraged us to closely watch for signs of a relatively normal correction (shallow -10% decline in equities worldwide over short 45 day (+/-) period) or signs of a more severe cyclical bear market (-20% decline over 9 months (+/-)). Enough signals have turned from bearish to neutral to bullish to compel us to shift back to the bullish equity stance we have maintained for quite some time.
All eyes are on the Fed this week.
What this means is that when the Fed and Central Banks are accommodative to growth…like they have been for a long time…we take other indicators, such as fundamental market valuation indicators, and give them a bit less weighting in our overall assessment of investment opportunities and dangers. Simply put, fighting the Fed or “tape” is typically considered foolish in the world of investing.
Our research indicates that regardless of when the Fed starts increasing rates from the current emergency level, that the increase amount and pace will be low and slow. Here’s a brief snapshot of some reasons why: