Financial advice of the things that are not said

One of life’s truisms is that certain things are better not to be said.

In the world of investing, however, some things are never said at all. Not because silence is “the right thing to do”, but more because no matter how much someone might want to imply something, saying it out loud would be wrong.

I found proof of this recently when my podcast, “Money Life with Chuck Jaffe,” celebrated its 10th anniversary. There were previous iterations of my show on radio and as a podcast dating back 20 years, but the hour-long weekday version that debuted April 30, 2012, has now done over 2,500 episodes, most featuring four interviews.

In these nearly 10,000 interviews – featuring thousands of unique guests – and excluding the many other conversations I had with experts for the purpose of writing this column, you would think that I heard it all now.

But what struck me as the show entered its second decade were the things I didn’t hear anyone say on air. Already.

I keep waiting and hoping – because the talks would make a good talk show – but I doubt I’ll find anyone who will ever give me the next four chestnuts with the belief that they’re true and right.

“The time to panic is NOW.” Whenever the market gets salty, the media is quick to apply the balm of an experienced financial planner or money manager saying, “Now is not the time to panic.

They make this statement as if there really is a good time to panic, as if there is a real time during a market frenzy when hysterical or irrational behavior is the right thing to do.

But even in the worst stock market declines, the verbal panic button has never been pushed on my show, and never will be.

Whether it’s a stock market drop or a big grocery run before a winter storm, or any other nerve-wracking situation, panic is never good, so eliminate it altogether. the conversation.

Don’t be taken by surprise or oblivious; as an investor and consumer, if you are aware of your current situation and conditions, you can deal with problems calmly and achieve better results.

If you are ever tempted to panic, something is wrong with your plan.

Individual investors are better off on their own, without financial advisors. There are many investors who do not need the services of a financial planner to achieve their goals and achieve their goals; a large percentage of my show’s audience is made up of successful, happy and confident self-directed investors.

Plus, nothing a financial advisor will do for you is so complicated that you can’t figure it out on your own.

But the same can be said for plumbing and carpentry, yet most people have no problem hiring an expert. Plus, we all know people who have overestimated their home improvement skills and ended up damaging their biggest investment, their home, in the process.

Just because it’s possible to do as well or better on your own doesn’t mean everyone should go that route. Having written two books on choosing and working with financial advisors, I realize there’s no denying the dangers of hiring the wrong expert and trusting the wrong people.

But virtually every study shows that people who work with advisors are more confident and less stressed about money. They pay for emotional discipline – the ability to chart and stay the course – rather than raw returns, and the expense is usually worth it.

“How you invest is the main determinant in achieving your goals.” The world’s most confident fund manager will tell you what he hopes to deliver, but investments are far less of a determinant of your financial future than your savings.

This is not to downplay the importance of good stocks – the long bull market after the 2008 financial crisis helped generations of investors catch up – but rather to maximize the importance of seeding those investments too. richly as possible.

Everyone wants to get rich quick while risking little money, but this is the least successful investment plan ever. The best chance you have of achieving your financial goals is to save as much as you can, for as long as you can, no matter what’s going on in the stock market.

It is a market of index selectors. You hear all the time that “this is a stock picker’s market”, implying that the conditions are tough, so good stock picking is necessary to achieve better results.

I hate that saying because it’s still a stock picker’s market. Superior stock selection is, well, superior.

It’s also incredibly difficult to achieve, which has given rise to long-term index investing. Many index investors these days are “tactical investors,” not the classic buy-and-hold index pickers inspired by Vanguard Group Chairman Jack Bogle to own the stock market, the bond market, and the let it roll.

Today’s index investor owns a portfolio of index funds, each representing different sectors, slices, corners and bites of markets, countries, industries, investment styles and ideas.

One thing that many of these investors forget is that it’s easy to mess up a portfolio by moving money at the wrong time into an ETF covering the wrong sector of the market. Poor index selection is as bad as poor stock selection.

The index might be the best investment tool for the average person, but even the best tools don’t always produce great results in the hands of an amateur.

The most important point: a real index investor who follows the teachings of a giant like Bogle is preparing for the roller coaster. They will experience ups and downs.

In markets like we have now, there will be pain. It will be temporary, although it may still be a long time. An “index picker market” would be one where the advice is “Buckle up, it will be scary until you come out the other side”.

This is generally the correct advice; funny that nobody seems to want to give him.