Investors Wall of Worry and Clouds of Uncertainty

Investments climb a wall of worry. The more uncertainty, the more investment opportunity. Investors have many things to worry about. Markets, inflation, economy, war, Ukraine, China, Israel, affordable healthcare, retirement, our kids. Modern politics are fraught with emotions, and this year is no different. Sometimes it seems like things are getting worse, not better!

Right now, you may be full of uncertainty. This is normal. Think about how things will unfold. Someday, you will have clarity.

Possibly you will lose (perhaps a lot of) money. Obviously this would be horrible. You might look back at your investment decision and say, “I should have known better.” You might feel, “clearly this was a bad investment decision.” 

On the other hand, possibly you will make (a lot) of money. This would feel great. Your elation may make you feel regret for not investing more money which could be the best decision of your life. The clarity only comes after the clouds of uncertainty have passed. Is it a storm cloud? Is the sun going to break through? You never know until it is too late. We always have to make decisions under clouds of uncertainty.

Our research team will be happy to share with you some of the opportunities we see today. Contact us at a time and in a manner that is comfortable for you. As I think you will find out, we put a lot of thought and effort into the investment decisions.

Importantly, many people worry about international investments. We believe in our long-term, strategic allocation between international and US equities. Learn more about how we invest in US equities and mutual funds. 

Investment research shows that timing and selection of investments matters less than financial planning, asset allocation and behavior management.

We make our biggest impact by aligning the investments with the real-life goals of our clients. At every financial planning meeting, start your conversations with an agenda and a map of your most important relationships, values and goals. Frame your financial decisions in light of what means the most to you. With the help of your financial planner, the investments pay homage to your plan, and unless the plans change, your asset allocation probably does not. Learn more about our financial planning process. Check out our resources for financial planning.

For example, Grandma Helen. She was frugal, and as she aged, became more so. We knew her investments would outlive her. We encouraged her to align her money with her meaning. Helen wanted to transfer some of the money she knew she would not spend during her life to the grandkids, as long as they went to college. We helped make sure things would go in alignment with her values. Read more about grandma’s college fund.

You want investments in alignment with your values, goals and relationships. You do not want to be worried about the economy, current market conditions, or what will happen next. The truth is, no one knows exactly how the economy is going to turn out. Even if we did, it would not be predictive for our investments.

Instead, we focus our energy on the asset allocation. How much money we put into this investment, or that one, will determine our success. Asset allocation accounts for more of the real-life investment returns than does an accurate economic prediction. Look at the statistics here.

In fact, the asset allocation matters more than the underlying investments themselves. If you have money in equities, which deliver long-term, large annual returns then you should earn those average returns. On the other hand, if you have money in low-risk, low-return investments, you will earn those low returns. Learn more about how we make asset allocation decisions.

Financial planning, asset allocation make a bigger impact on the real-life, long-term results achieved by investors than timing or selection of investments. But the biggest impact is your behavior. Can you stick with it? We are your guide, your coach, your counsel. Talk to us and let’s make sure everything is in alignment with what means the most to you. Mainly, what means the most are your values, goals and relationships.

The wall of worry that investors face today feels more daunting than in recent memory. However, the media thrives on situations like this. In fact, they sell more ads the more bad things are. Things are bad for the traditional media. With so much competition from social media the traditional media face an “existential threat.” It is no wonder we read so much bad news!

Read a summary of what we know about stocks and bonds. See for yourself how history shows that equities climb the wall of worry. The more worried we are, the better long-term results may be. And consider downloading our white paper with a more complete investment philosophy.