NWP Monthly Digest | November 2019
Who doesn’t love a Snow Day?
We’ve had an interesting end to the month of October here in Denver. This week saw record levels of snow for the month and buried us in for a few days. That’s right…SNOW DAYS! And just in time for Halloween!
For any of you that grew up in a part of the country that was likely to receive large amounts of snow fall from time to time, the snow day brings back fond memories of sitting around the house, going sledding, and spending long hours playing board games instead of going to silly old school. Perhaps a game of Risk, anyone?
Risk is a major focus here at the Global World Headquarters of Noble Wealth Partners, but not the kind that involves 6-hour long marathons devising plans to destroy your brother or sister’s empire in a board game. No…we’re thinking about financial and investment risks over here at NWP.
Judging by our conversations with clients and prospective clients lately, it seems it might be all you can think about, too.
What’s going to happen if the President is impeached?
What’s the deal with Hong Kong?
Why are we pulling our troops out of Northern Syria?
When, Grant and Jeff, do you think there is going to be another recession? When???
Well, my friends, the answer probably isn’t all that satisfying. When will there be another recession? We don’t know, but this will certainly be the most well predicted recession of all time if it happens next year.
What about all this uncertainty, though? Well, historians will happily point out that the only common thread of the last 100+ years or so has been uncertainty. Two World Wars, a cold war conflict between nuclear super powers, terrorism, and even a couple of Presidential impeachments. The only thing certain, my friends, is that the future is always UNCERTAIN.
So how do we define risk when it comes to investing? Is there a risk that the stock market will go down? Absolutely. In fact, we’re quite positive the stock market will have another correction in the future. It happens all the time.
We would also have you think of it this way: what is the risk that you miss out on returns by attempting to predict something that is inherently unpredictable?
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch
We know it continues to sound like a broken record, but it’s one of the most important changes to your mental model you need to make if you want to increase your success as an investor. If you’re having thoughts that you just need to do something RIGHT NOW because of all this uncertainty, well…we’ll just leave you with this last paragraph.
If you’ve taken the time to go through the financial planning process with us or someone you trust and you understand where all of your money is invested and why it’s invested that way, then you can relax. You can never predict, but you can plan and prepare. The goal isn’t clairvoyance, the goal is to build an investment portfolio that is durable and can withstand the occasional, if completely unpredictable, shock in the stock market.
If you haven’t done those things…well, maybe you should call us.
Our Noble Wealth Pro Tip for November
Does your company’s 401(k) or 403(b) offer a Roth option? Building retirement assets into a Roth IRA becomes very difficult as your income increases, ultimately phasing out at Modified Adjusted Gross Incomes of (MAGI) $203,000 for married couples and $137,000 for single filers. More and more retirement plan options at the workplace are offering the opportunity to contribute on a Roth basis - meaning the contributions go in after-tax, grow tax-free, and then are available in retirement (after age 59 1/2) as tax-free withdrawals.
Things we’re reading and enjoying…
The Economists Hour: False Prophets, Free Markets, and the Fracture of Society by Binyamin Applebaum - in this "lively and entertaining" (Liaquat Ahamed, The New Yorker) history of ideas, the New York Times’ Appelbaum tells the story of the people who sparked four decades of economic revolution.
What we’ve been up to…
Noble Wealth Partners was recently invited to the University of Colorado’s professional networking event for the student’s in their fledgling Personal Financial Planning Program. It was a great opportunity to answer questions from the next generation of financial planners and to spend time with other professionals in the industry. As usual, Grant and Jeff continue to be busy in the community as financial professionals and volunteers. Click on the button below to check it all out…
Getting worried about the cost of college?
Jeff recently hosted a live webinar on the cost of college and how to prepare your family finances for this expense. If you have questions or concerns on how your going to pay for your kid's college, how the FAFSA and the student financial aid process works, or if you are just plain curious how this all comes together, then spend some time educating yourself on the cost of higher education by listening to the replay below.
