Do You Ever Wonder...The Hallmark Abstract Service Podcast
The Do You Ever Wonder podcast from Hallmark Abstract Service was created for one purpose...To explore topics that our listeners want to learn more about! To achieve this we invite expert guests to discuss their specific areas of expertise with our host, Hallmark Abstract Service CEO Mike Haltman. We are always looking for input from listeners about what they would like to hear about and learn about. We have spoken with 1-800-Flowers founder Jim McCann, Heroes To Heroes Foundation founder Judy Elias, ’The Everyday Entrepreneur’ Rob Basso, Ellen Leikind of Poker Divas, women's financial literacy crusader Cary Carbonaro, and so many more. We explore subjects ranging from health and nutrition, real estate, personal finance, entrepreneurship, business, career, science, philanthropy, and of course issues we all face in life!
Episodes can also be heard at Padverb here: https://en.padverb.com/hallmark1
Do You Ever Wonder...The Hallmark Abstract Service Podcast
When The Stock Market Is Collapsing And You Want To Sell Everything...Watch This First!
Forget What You Thought You Knew About Investing!
It's Purchasing Power, Not Principal Preservation, That's The Actual Key To Success!
Behavioral Finance...Jonathan Blau, Founder and CEO of Fusion Family Wealth and his Team, stop clients from making the emotional mistakes that ultimately lead to running out of money when it's needed most (Watch more here)!
Typical Investor Behavior
1) Fight or Flight - Panic reactions leading to selling market bottoms, and euphoric reactions leading to chasing stocks at elevated prices.
2) Emotion - Psychologically pain of loss is 2X worse than the thrill of gains, leading to holding losers and selling winners.
How Do We Overcome Typical Investor Behavior?
1) Learn real risks, aka the loss of purchasing power!
2) Develop a goal-focused plan.
3) Diversify - Avoid concentration of risk
4) Buying good stock investments on sale
This discussion with Jonathan systematically convinced Do You Ever Wonder host Mike Haltman that his long-held beliefs about investing and portfolio structure were wrong.
In other words, the traditional 60/40 stock/bond portfolio adjusted over time becoming even more bond-heavy as investors age, falls short of meeting most long-term financial goals.
Why? Because the investor is going to lose what really matters...Purchasing Power!
According to Jonathan, for an investor to maintain purchasing power over time, including throughout their retirement years, a portfolio should be close to 100% stocks.
Although stocks are volatile and each year will at some point decline, (some years more than others i.e. the tech bubble, 9/11, 2008 Financial Crisis), regardless of the reason for those declines stock indexes have historically continued to move higher and beat the inflation rate by a significant amount.
And, dividends have continued to grow.
In other words, because stock prices increase over time despite short-term volatility and dividends continue to grow, an investor will preserve their purchasing power.
But it's the volatility, despite being short-term in nature, where managing investor BEHAVIOR becomes key!
First, Consider How Bonds Are The Nemesis Of Maintaining Purchasing Power
Traditional investing would include buying a bond, in this example a 30-year bond with a 5% coupon (use $1MM invested). Each year the investor will receive $50,000 and at the end of the 30 years get the $1MM back.
But because that $1MM in principal has not grown, and the income generated has remained the same, inflation has seriously impacted Purchasing Power!
This concept about bond avoidance and the inadequacy of the traditional bond/stock portfolio mix runs counter to most investors' emotional need to protect their principal.
But sitting with Jonathan Blau and listening to his investing and portfolio structure thesis, Do You Ever Wonder host Mike Haltman became a believer! Because it made perfect sense!
Investor Behavior Can Impede Investing Success!
Although preserving purchasing power is absolutely critical, it runs into the powerful impediment of investor behavior and psychology that focuses on a desire to preserve principal.
Why? Because of the ingrained desire of most investors to preserve principal despite the fact that it's destroying purchasing power.
Jonathan and his Team stop clients from making the emotional mistakes that ultimately will lead to running out of money at the time that they need it most!
Learn more at Fusion Family Wealth here https://www.fusionfamilywealth.com/
