Long Term Investing

It’s my belief that the longer your time horizon, the more it starts to be your friend.

What do I mean by that? Investments of all nature tend to be cyclical, meaning as a normal course of business they go up and down. The longer you’re invested, the more of these intermediary “cycles” you’ll experience, with the end goal eventually being up. If you don’t believe that long term the value will be greater, then why are you investing?

Anyway, many times people say “but I just retired and I’m no longer a long term investor”. My answer is that I hope you’re still a long term investor, as I hope you live a long life.

For a full discussion of this, I highly recommend you watch my video. Good stuff (if I do say so myself).

 

Good morning, Mike Brady here with Generosity Wealth Management, a comprehensive full-service wealth management firm headquartered right here in Boulder, Colorado and today I want to talk about how long-term investing is probably going to be better on your stomach and being able to sleep well at night. I want to really talk about that.

You might say to yourself, “Mike, I’ve heard that before but I’m not a long-term investor because I’m retiring next year or I just retired.” All I would respond is, “I sure hope that you’re long-term because hopefully you’re going to live a very long and fruitful life all through retirement and you don’t want to outlive your money so even though you might think that you can’t be a long-term investor, you probably are.”

I’m going to put two or three different charts up on the screen so pay attention.

The first one is the 100% unmanaged stockmarket index over the last 15 years. You’re going to see it up, down, up, down, all over the place and by looking at this chart you’re probably saying to yourself, oh the market’s gotta go down. Well, I’m just saying that’s not necessarily the case.

I’m going to put the second chart up if you could pay attention to it and this is the 100% stockmarket index over a 113-year timeframe and what you’ll see, there are some times where it plateaus, sometimes where the trend is down, and times when it’s a generally up-trending market.

The third chart that I’m going to put up on the video is the range of returns over a one, a five, a 10, and a 20 year time horizon. What you’ll see, is as the time horizon is shorter, whether it’s unmanaged stockmarket index, unmanaged bond index, or a 50/50 between the two, the shorter you go the more volatile the standard deviation as we call it, it gets greater and the range of return is very high or very low. As we go out from left to right on that chart, what you’ll see is the band starts to get narrow and narrower. I bring this up because many times we have a tendency to look at things on an hourly or a daily, particularly with the 24-hour news channels and cycle anymore, weekly, monthly, even quarterly or annually, when really we need to keep our eye on our plan and start to look at things from a long-term vision.

Of course you should work with your financial advisor, hopefully I’m that guy, in order to find a plan that works for you that you feel works with your particular goals and your risk tolerance, etcetera. We do have to keep a long-term vision and of course review it, how it’s fitting with our plan, but let’s start thinking long-term.

Mike Brady, Generosity Wealth Management, 303-747-6455. If you’re not my client, give me a call and we’ll talk about it. If you’re my client, I love you and I think that’s it for today. You have a wonderful week, wonderful day, wonderful week, wonderful quarter, and of course wonderful long-term horizon as well. Bye-bye now.

 

Wrong on Inflation

Wrong on Inflation

chart- continuously plummeting inflation

With a loose monetary policy over the past 4.5 years, the fears of inflation have been touted endlessly.

I, too, have warned about inflation over the years.

But where is it? Is the lack of hyperinflation one of the biggest, most incorrect predictions of the past 5 years?

It certainly is.

With the printing presses going, why hasn’t there been the expected inflation?

Perhaps a combination of an oil boom, slow growth in Europe, ongoing reduction in household debt, etc.

For a deeper discussion of this, click on the link below

The Most Incorrect Prediction of the Past 5 Years

 

Rail Traffic Continues to Soften

Rail Traffic Continues to Soften

Rail traffic chart

One of the mostly closely watched barometers for Warren Buffett is the level of rail traffic.

 He believes that it’s a leading indication of how much productivity is going to happen in the future as goods are transferred across the U.S.

 It’s currently still in traditional “expansion” territory, but it’s been weakening over the past year or so.

 In my opinion, it’s reflecting the ho-hum economy we’ve all been experiencing. I’ll continue to watch it closely, as one of the variables to what may be in our economic future.

Full Article

 

Why Do Black Shirts Get Hot in the Sun?

Why Do Black Shirts Get Hot in the Sun?

sun

It’s summer now, and after such a wet and cold spring, I’m looking forward to some warm sun on my shoulders.

But, have you every wondered why black shirts get hot in the sun?

Fortunately, your trusty adviser here has the answer. It has to do with which wavelengths of the light spectrum are absorbed and which are reflected.

You want to appear smarter at the next BBQ with the full answer at the tip of your tongue? Click below.

 Full Article