Year to Date Update

Year to Date Update

We’re halfway through the year, and it’s been a volatile one.

Brexit was just 1.5 weeks ago, and don’t forget that horrible January.

And, this is an election year.

What are my thoughts about this year, the big picture, and the election year in particular?  Click on the video (6 minutes) for my thoughts.

Transcript:

Hi there.  Mike Brady with Generosity Wealth Management, a comprehensive, full-service financial firm here in Boulder, Colorado.  Although I have to admit it’s July 4th weekend I’m recording this on Sunday the 3rd and I’m at my Wyoming cabin.  You know with today’s technology, internet, cell phone I can run thing just as well here at the cabin as if I was there in Boulder or in downtown New York.

Let’s talk about the year to date.  Give or take it’s about breakeven.  When you look out a year same thing.  It’s plus or minus a couple percent which is how I define breakeven.  When we look out three years and five years that’s different.  The unmanaged stock market indexes are positive.  So far in 2016 this is a great example of why you want to have a mix of stocks and bonds and be diversified.  Unmanaged bond indexes have done quite well this year as people have done the flight to safety.  And so I think that’s a good thing to have in your portfolio especially this year.

I’m asked a lot about what do I think this year is going to produce now that it’s an election year.  This is an interesting election.  I have to admit I’ve been in many different elections and this is kind of an interesting one.  I did all the stats going back to 1976 and that’s about ten different election cycles, the last one being 2012, the first one being 1976.  And on average the election years were positive.  Eight out of ten were positive years.  And they were followed by the next year on average – so the first year of a presidency that was very good.  I mean out of the four years for a presidency it was the second best.

So Peter Lynch one said that more money has been lost avoiding corrections than was every lost in a correction.  And what that means is if we allow our motions and our fears to dictate what we do, to get into that particular game of investing, et cetera, then that’s going to have long term negative consequences for us as investors.  And I have to just tell you that as a financial advisor I look at some of my peers, other advisors, other investment professionals, a lot of them play up to that fear, up to that emotion because some people have been so scarred from 2008 that every little blip that happens all of a sudden it’s 2008 again.  And that’s just not true.  I mean 2008 just to put it in perspective was a very unique event.  I mean since 1926 it was the top one or two worst events.  So it’s not like it’s repeated every six years although it could.  I mean I don’t know the future any more than you do.

But one thing that I do want to impress upon you is that let’s look at the big picture and not overcomplicate things.  I had a boss frankly who everything was complicated.  If something was complicated in his mind that meant that it was good, that it was obviously sophisticated or that this was something that we could show in add value that we’re adding value to a client.  If something was simple he’d make it complicated and in my opinion I never agreed with that particular philosophy.  That’s not to say that some things that are complicated are bad.  It just doesn’t mean that’s necessarily good or that things that are simple can stay simple.

What I might ask you is with all the different options that are out there at this point do you believe that the stock, bonds, mutual funds, investments the U.S. is something that you would like to invest in for over a 5, 10 and 20 year time horizon.  If the answer is yes then these blips are things that you shouldn’t lose too much sleep over.  These 6 month and these 12 month periods, even two years, are not things that should cause you to stay up at night.

Even when we’re looking at election years and years afterwards at the end of the day either your conviction is that you believe that things are good from an investment point of view because the President, he or she in this case, is not a benevolent despot who gets to choose everything that’s right or wrong in the United States.  It’s a very complicated economic and political system of which they absolutely have the biggest pulpit out there.  However, you should not make your determination solely upon whether your guy or gal is the winner in the particular election.

I could sit here and give you my prediction for the rest of the year.  I’m not going to do that because then that helps propagate that quarter or 6 months as something that we should look at.  And so I’m not going to do that.  As a matter of fact going forward I think I’m going to stop doing that because I want to keep your eyes on the big picture and the things that are going to probably be the biggest advantage for you which is keeping things in the long term, keeping diversified and keeping your emotions and being disciplined going forward.

My name is Mike Brady.  This was my year to date, quarter end review.  I hope you’re doing great so far this year.  My phone number is 303-747-6455.  You have a great day.  See you.  Bye bye.

 

 

My Brexit Thoughts

My Brexit Thoughts

CaptureLast week I did a full newsletter on Brexit, with video, explaining my thoughts.

The market over-reacted (in my opinion) and then came back to almost where it was before the whole event.

Good newsletter if I do say so myself, and recommend you check it out if you haven’t already.

2016 06 29 – Brexit Thoughts

Investors Often Mistake Emotion for Gut Instinct

Investors Often Mistake Emotion for Gut Instinct

In May I was in New York City, and the highlight by far was the interview I did with Financial Advisor IQ (division of Financial Times) on biases.FT Still

It was really fun, and focused on the types of emotions and biases that investors have to be aware of and overcome.

The producer liked the interview so much that he decided to make it a 3 part series, so the link below is only for the 1st of 3. The rest will come out sometime in July and August.

Anyway, pretty good interview, so I hope you watch it.

Investors Often Mistake Emotion for Gut Instinct

Dubois, Wyoming Cabin

Dubois, Wyoming Cabin

IMG_9306

In today’s technological world, as long as I have internet and a phone, I’m able to run my business from anywhere.

This summer I’m fortunate to spend much more time in our Wyoming cabin now that it’s fully outfitted as another office, just like my Boulder one.

In addition to all my business travel this summer, I’ll be traveling back and forth between Wyoming and BouldIMG_9307er, working strategy in the cabin and having in-person meetings in Boulder.

Life is good.