Exceptional Investing in Volatile Markets

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Stock market volatility recently returned to normal levels after a few years of abnormally low volatility. It’s a good time to remind ourselves how to take advantage of this very natural dynamic of investing rather than be deceived by it.

Here are five important reminders:

1.   Volatility is your friend.

Exhibit 1: Long-term View by Asset Class

The very reason equity markets offer the possibility of higher returns than saving or investment vehicles with less perceived risk, such as U.S. Treasury Bonds or Certificates of Deposits (CDs), is the higher risk and greater volatility associated with such holdings.

This is called the risk premium, something investors as a whole build into liquid, open, transparent financial markets every business day of the year around the world.

For instance, the S&P 500, over the last 90 years returned about 10% per year.* However, there were very few individual years it actually returned that amount. The reality is that in 40 of the 90 years, the index was up more than 20% or down more than 20%.

So, remember, the premium (return over less risky assets) you are seeking to receive in risk assets is precisely for accepting the bumpy ride associated with the investment vehicle.

So long as you genuinely are a long-term investor who can ride out the bumps to the level you have accepted, history demonstrates you can be fine. Exhibit 1 illustrates the long-term historic view of what broad asset classes look like: **

 

 

1.   We find little evidence of excess in the economy that usually results in a recession, and this gives us reason to think the next recession is still some time away.

 

2.   The investment markets are re-pricing for a slowdown in economic growth, but absent a recession, the bull market is likely to resume.

 

3.   Non-U.S. stocks and value stocks offer some attractive opportunities given their respective cycles.

January High-5 from Janiczek

A  monthly recap of articles designed to inform and inspire on a variety of topics related to investing and wealth management. 

In this edition:

  • 2019 Outlook / 2018 Top Takeaways and Market Review
  • Investing in Volatile Markets
  • Wealth & Health in 2019
  • More Freedom in 2019
  • All for One, One for All

The Gift of More Freedom

What’s the use of achieving a high level of financial security and independence if you do not utilize this advantage to enjoy more freedom? Give yourself and your loved ones the gift of more freedom in 2019. Simply learn to utilize two tools we created to continually liberate yourself and enjoy higher and higher levels of freedom.

In doing so, you can exercise more control over your life. First, resolve to become Free FROM nagging situations that are holding you back. Then, resolve to participate in activities and pursue goals that are important to you and that you are now Free TO pursue with vigor.

Flourish

Two of the fundamental ways we help you (or can help you) flourish is to free you from the complexities of prudently investing and managing wealth. But, we are very aware that this state of flourish can be diminished if you are held back by other weaknesses, complexities or energy drains. That’s why we created a tool to help you engage in a continuous process of liberating (freeing) yourself from whatever else may be holding you back.

We also recognize that it’s not enough to only help you liberate yourself. We know it’s equally important for our clients to have exciting life enhancement goals they are pursuing with such freedom in order to fully flourish. In short, a “liberated from” needs to convert into a “liberated to,” in order to fully benefit by the transformation. That’s why we also created a tool to help you articulate the things you want to be free to do.

Joseph Janiczek, founding partner of Janiczek Wealth Management, recently wrote the following article about a project underway with Dr. Jeffrey Gladden, an interventional cardiologist and founder of APEX.

Within their respective disciplines, Mr. Janiczek (Wealth) and Dr. Gladden (Health) both advocate integrative, evidence-based programs tailored to the individual. Both recognize disciplined, pro-active resource management promotes performance optimization. Each pursues methods to help minimize risk, foster confidence, and support personal life goals.

However, even more remarkable than such parallels is the potential of wealth and health added together.     -Cathy Wegner


 The Wealth + Health + Longevity Breakthrough

Jeffrey Gladden, MD, a world-class longevity expert and founder of APEX, and I have discovered that it is quite beneficial to comprehensively look at wealth, health and longevity in an integrated way.

The Stages of Financial Freedom with Longevity animated illustration below shows the profound impact longevity has on wealth and the new possibility of reclaiming health and extending longevity that is now possible as a result of breakthroughs in medicine.

Exhibit 1: The Stages of Financial Freedom® with Longevity

Working together, we discovered two breakthroughs are possible, when looking at this dynamic together, that can be quite additive to proactive wealth management and optimum health management:

  1. The possibility of reclaimed health and expanded longevity brings an ideal financial mindset into play that can help you think, act and stay in peak financial form.
  2. The possibility of reclaimed wealth vibrancy brings an ideal resourcefulness mindset into play that can help you think, act to stay in peak health/fitness form.

What is All for One, One for All?

Our entire team is dedicated to clients gaining maximum value from our Complete Wealth Solution. The combination of our Strength Based Wealth Management, Evidence Based Investing and Semi-Annual Tune-Ups will address most of your needs in a timely and orderly fashion. The rest will be handled by calling or emailing our service team.

At Janiczek, we take care of the detail. You flourish!

How can anyone judge unless one’s mind has been opened and enlarged by reading?
– John Adams

Reading is still the main way that I both learn new things and test my understanding.
– Bill Gates

Books allow you to fully explore a topic and immerse yourself in a deeper way than most media today.
– Mark Zuckerberg

The more that you read, the more things you will know.
The more that you learn, the more places you’ll go.
– Dr. Seuss

As we close 2018, we’re pleased to share our favorite books of the past year with the clients and friends of the Janiczek community.

There are so many great Janiczek Community events coming up and we know demand will be off the charts. Take a sneak peek and chime in! Let us know your thoughts. Which should we hold first? For which events shall we add your name to our VIP invitation list? What other topics would you be interested in learning more about?  Janiczek Community Events and Survey

 

  1. Ten years after the 2008 market meltdown, U.S. equities are up over 200% and posting fresh new all-time highs.
  2. Higher interest rates during the quarter presented some headwind for bond investors, but bonds can still generate decent returns within a long-term trend of higher interest rates.
  3. The underlying economy boasts plenty of strength, with economic growth during the rest of 2018 expected to remain above 3%.

READ REPORT»

WATCH VIDEO (04:35)»

 

The Art and Science of Getting and Staying “On a Roll”

 I love adapting engineering and physics concepts to solve common financial problems many people, even financially savvy people, encounter all the time. That’s why I’m so excited about my latest invention, the Wealth Allocation Wheel.

Illustration 1

The challenge, in simple terms, is “staying on a roll.” There is an art and science to staying on a roll with your wealth. This means having enough inertia with your wealth to successfully navigate the Stages of Financial Freedom (see Illustration 1). The clear aim I have written about extensively is how to achieve controlled growth while avoiding short or long periods of stagnation or depletion.


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