We typically write you letters to chew the fat about the stock market, the economy, and educational snippets on investing. Once in a while, however, it’s nice to learn about what goes on behind the scenes of a financial advisory firm. This past week, a truly special series of events transpired so we had to share them with you.
A 12 year-old baseball player, who may eventually become a financial advisor like his father, found a way to at least begin advertising for the firm! The young ballplayer brought attention to the My Portfolio Guide banner hanging in left field by hitting three home runs in one game! The magical moment has been published in several Southern California newspapers and young Lance can also savor the memory as it was all captured on video.
Lance Pixa has always been a solid baseball player with some notable accomplishments, like pitching two complete game no hitters, but what he did over a string of four days doesn’t happen too often at any level. He has had one of his best seasons this spring and last Sunday Lance hit his first over the fence homer at LAYB (Los Alamitos Youth Baseball). What made the moment more special was having his best friend, CJ Brown on first base when the ball left the yard and he was the first one to greet him at home plate. The following game, Thursday 4/6/17, Lance was up with CJ on first base again. This happened three more consecutive times and Lance hit 3 homers over the same part of the fence!
Lance Pixa plays for the LAYB Bronco Red Sox during the spring. This is also a special year for the league as they will be hosting the Bronco World Series in August. Along with this team Lance also plays for the OC Invaders which is a travel baseball team based out of Seal Beach. He and his teammates will be headed to Cooperstown, New York this summer to play in a national tournament and visit the baseball Hall of Fame. Lance lives in Seal Beach and is a 6th grader attending St. Joseph in Long Beach.
When asked what he wants to do when “he grows up”…the answer has changed over the years. As a little boy he used to tell people that his dream job was to be a tiger feeder at the zoo but “if that didn’t work out his backup plan would be to play on the Angels”. We won’t be one to kill dreams (or categorize them!) but for now this young man certainly created a memory that will last a lifetime. His father, Matt Pixa, will also not complain about the return on investment with all the attention the My Portfolio Guide banner received this past week!
It sure seems as though you’re stuck in a rut. Just a few weeks ago Wall Street traders were donning embroidered hats with “Dow 20,000” on them in anticipation of reaching this stock market milestone. As investors approach proverbial milestones, their thinking and decision making process often begins to falter. How was your mindset when the Dow Jones cracked 14,000 in October of 2007 versus not too long afterward when it was at 6,600 in March of 2009?
The number of investors that are still sitting in cash from way back then is mind boggling! Do you take a long time making decisions? Are you worried about making the wrong choice with your investments and therefore don’t take any action? Do you analyze all the options but later on kick yourself seeing that so many opportunities have passed you by?
If any of these questions resonate with you, it’s likely that you suffer from paralysis by analysis! Here are a few steps to consider and break free of this condition:
Crystalize the objective – The first step in overcoming paralysis by analysis is to truly understand your goal and timeline. Not everything is accomplished in one day. Your end goal will come to you by taking action but you must avoid being overwhelmed with a multitude of choices or an instant desire for perfection.
Rip the Band-Aid off! – This is obviously much easier said than done. Advising someone who overanalyzes and is prone to being indecisive, will not likely yield in a comfortable transition. There are occasions, however, where “going all in” makes sense. Practice taking small action steps that lead you to becoming confident and decisive. Once you realize that making small mistakes doesn’t always derail the end goal, you will be that much closer to breaking free of larger decisions that demand your action.
No rearview mirror needed – Paralysis by analysis can creep into your portfolio if you continuously kick yourself for past mistakes. We can learn from history but hanging on to the past can have serious negative consequences. History doesn’t necessarily repeat itself and sometimes a fresh start is exactly what you need to break through. Be forward looking as opposed to focusing so much on what has or has not happened before.
Tip-toe in the water – The typical investing approach to “tip toeing into the water” is basically dollar cost averaging. As opposed to going all in at once you may be more comfortable with more of a phased or stair-step strategy. Another way to implement a plan like this is to invest your idle cash in thirds towards your established target allocation. Ideally you should select trigger points when the market is showing weakness. Keep in mind that once you begin this course of action you must commit to completing it.
Declutter! – Most people can’t park their car in their own garage due to all the junk that has piled up over the years. Your investment portfolio and the decisions (or lack thereof) can become very much like an unusable garage! Simply get rid of what you don’t need. If you have investments that aren’t in line with a solid plan…dump them now and don’t look back. If you’re interviewing financial advisors and there are clearly some poor choices, don’t even meet with them. Why spend time and not advance a decision due to energy being wasted on distractions?
Delegate it to a pro! – Let’s put it this way…. If you had a financial advisor who got nervous at key stock market milestones and stayed in cash far too long while the market took off to set new record highs….you would fire them, right? If that financial advisor is YOU…it might be time to fire yourself! You may be very intelligent, perform tremendous due diligence (almost to a fault), and of course have your best interest in mind; but if you don’t have a clear and decisive investment strategy, you’re simply not capable of optimally managing your investments.
The stock market has been rather nasty as of late so let us switch gears and touch on a topic that most investors avoid yet need to pay more attention to. After all, what exactly happens to your investments when you’re gone? Do you actually need a living trust or would a will suffice? We reached out to Mindy Baldwin, an estate planner in Rancho Santa Margarita for expertise on this topic:
The terms “will” and “trust” come up often when doing estate planning. Many people assume that these terms mean the same thing and use them interchangeably. However, wills and trusts are different documents that are used in different circumstances. Continue reading →
Like most Mondays you begin the week with your gyrations of going up and down. All the companies that make up your identity are digesting the news from over the weekend as well as what’s on tap for the week ahead. As of this writing investors are scared and don’t completely trust you but conversely they’re also almost bored since you have yet to provide any meaningful direction or hint as to what your real plans are.
You could continue to break out and go higher or you could do what you’re supposed to do which is sell-off by at least -10% to -20% within the next few months. Guess what? We don’t care…at least not today. After some sunsets, both literal and figurative ones, there is so much more to them than what happened with the market. Yesterday, June 22, 2014 was such a day.
Driving over to the Long Beach Yacht club was pleasant and relaxing. On this first day of summer I looked out over the bridge leading into Naples and Belmont Shore and I could see tons of people splashing in the water, kids building sand castles, and nearby boats sailing in and out of the marina. As I parked my car however, the reality of why I was going to the yacht club struck me harder than expected. I was going to see a client, or at least one of them. For the third time this month our firm lost another client to cancer. Today was to be a celebration of her life and although that’s what she and her family wanted, it sure was difficult to “celebrate”. After all these years a client becomes a friend and a part of your extended family. Continue reading →
How ‘fit’ is your financial team? Putting together a financial team to help you meet your financial goals is like building a winning sports team. Each member of your financial team needs to know what their responsibility is and what they are contributing to your financial success. With tax-season behind us and the equity and fixed income markets experiencing volatility, now is a great time to assess your team and see if it is truly making the grade!
There is no single approach to building your team or a guide on how to assemble one. The key is the team needs to work for you, they need to give you a sense of comfort and they need to work together. Whether you work with individuals or utilize software solutions it is important that an assessment takes place so that you don’t suddenly find yourself in a hole that you need to dig out of.
In this article we will discuss how to build your “Team of Trust”. We will look at three key areas that every investor should consider: Estate Planning, Tax Planning and Financial Advice. We will discuss some key elements with each member of the team: Why? Who? What? How Much? Continue reading →