If My Investments Could Talk, Here’s What They’d Say To Me

George Washington

1. I am well rounded and diversified.
I’m a liberal arts major. I’m conversant in a variety of subjects which is great since you never know what the hot topic of the day will be.

2. You won’t always be talking about me but you’ll always be very comfortable with me.
I don’t need to be fawned over, but I do need to know that we’re in this together.

3. I will carry on through the highs and the lows.
I know there will be some great times and some terrible times and I’ll just keep rolling as long as you let me.

4. I won’t be compared to the S&P 500 or the Dow Jones Industrial Average.
I’m different than them so I can only be expected to behave differently.  I do share some characteristics and behaviors with them but we are not the same investments.

5. You will not constantly trade me out for new investments.
You took some time to find me.  Returns were not a big determinant in my selection. I was picked for other reasons.  If those reasons haven’t changed then you better have a really good reason for getting rid of me.

6. I may not always act like I did in the past.
I’m not programmed to repeat my performance of last year.  In fact, my memory isn’t very good so I don’t really remember what I even did last year.

7. You will have realistic expectations of me.
I can only do so much. Let’s not bank on double digit returns. Planning on mid-single digits is prudent.

8. I will not always be able to explain my behavior.
Sorry, but sometimes I will act irrationally. Sometimes my actions will be completely random.  I hope that you will come to accept this characteristic of mine.

9. I will always play second fiddle to your financial plan.
I know my role.  I’m going to do my best to help you live your best life possible.

10. You will give me a long time to prove myself.
I don’t want to be judged tomorrow or next month or next year as to how I’m doing.  How about we check back in 5 or 10 years from now?

11. Time is on our side.
The longer we stick together, the greater the likelihood that things will work out between us.

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Internet, Email and Phone Outage

Woodward Financial Advisors is currently experiencing an internet outage, which is impacting our ability to send and receive emails or make and receive phone calls.

This outage appears to be impacting a significant portion of the NC Triangle area. As of the time of this post, our provider is unable to determine when service may be restored.

We will respond to any received emails as soon as we are back up and running. We apologize for any inconvenience.

Posted in Firm News

Woodward Financial Advisors to Teach Retirement Planning Class: May, 2017

For the past few years, we’ve been teaching a retirement planning course on the UNC-Chapel hill campus. Several clients and blog readers are graduates of this course, and reviews have been consistently positive. Our next course offering will be in May, 2017. If you know someone who might be interested in the course, please forward this on to them.

(Please note that this course is not intended for current clients of Woodward Financial Advisors since the material covered is already part of the advice given to current clients.)

Classes will be held on Tuesdays (May 9, 16 & 23) from 7 PM – 9 PM

Location: UNC-Chapel Hill Friday Center (100 Friday Center Drive, Chapel Hill, NC  27517)

Course Description: Retirement Planning Today Course Description

Instructor: Benjamin Birken, CFP®

Tuition is $49, which includes the 224-page textbook.

To register, please complete the online registration form  and use Course ID: P00N21, or call our registration hotline at (984) 960-1985

Posted in Classes, Retirement Planning

Human Nature: Where Weather Meets Investing

Miller Family Spring Break 2017

The Miller Family (from left to right): Ava, Melissa, Jim, Mason & Liza

We recently returned from our family spring break trip to Puerto Rico.  It was a wonderful week spent with good friends of ours (two families – ten people – one house!) exploring a part of the world our crew had never visited before.  We met lots of delightful people, ate delicious local cuisine, and took in a plethora of beautiful beaches and countryside.

While the week was fantastic, it wasn’t without its moments of anxiety, particularly as we landed and were met with a 7-day weather forecast sporting something like a 40-80% chance of rain each day!  While the other three adults in the house started to strategize about the weather, my mind quickly hopped to its parallel with investing.  Island weather is unpredictable at best, but when it’s a tropical island in the spring, it’s truly a crapshoot.  So, as I listened to everyone I silently gave each of us a nickname.  Real names have been changed to protect the guilty….

“Stormy” (aka Technical Analysis man) – the patriarch of the family we traveled with loves to track weather patterns and attempt to glean information from them.  He’d say things like, “The wind has been out of the southwest each morning so we should be fine once it breaks around noon, which will push the clouds off towards the north and calm the ocean tide. The best beach time looks to be in the 12:00-3:00pm window.  That’s going to continue for the next couple days and then the pattern is shifting.”  That prediction would be fine if patterns were always predictable and guaranteed; the same goes for weather and stock markets.

“Cloudy” (aka Market Timer woman) – the matriarch of their family is a little more willing to bounce around in hopes of always being in the perfect weather place.  She’d conjure ideas like, “There is less chance of rain in the morning at Beach A, less in the midday at Beach B, and less in the afternoon at Beach C.  So, let’s go to Beach A from 10:00am-noon, Beach B from noon-2:30pm, and Beach C from 2:30pm-4:30pm.”   This may seem reasonable, but what about the transaction costs involved, such as travel time between locations, the cost of gas, and lost time loading and unloading ten beach chairs and towels?  And that’s just the guaranteed losses: what if the weather prediction part is also wrong?  Similarly, we can aim for the perfect investments at every moment in time based on ideal predictions, but, even if our predictions could be consistently right (they can’t), the transaction costs and taxes of constantly changing investments will eat away the earnings.

“Overcast” (aka Forecast woman) – my bride loves the weather channel app and was glued to it from the time our plane landed.  She’d exclaim: “They are saying we’ll have clouds and over 50% chance of rain basically every day.  We aren’t going to see much sun, and we came all the way here for a tropical vacation!”  I’d liken the all-knowing forecast to an economist’s prediction.  Someone publicly assigns a likelihood to a future state.  But meteorologists and economists are rarely held accountable when their predictions are wrong, as they often are.  So why would we blindly base our daily activities (or retirement funds) on them?

“Spring” (aka Fundamentals man) – Okay, so this is me.  My spring break outlook became: “Alright, we’re here and the weather is going to be what it is going to be.  I can worry about it and spend a lot of energy trying to strategize about it, but it’s going to be what it is.  We’re on a tropical island that traditionally has temps in the low 80’s in March, sunshine most of the day, frequent rain showers in the late afternoon, and a similar pattern daily.  Let’s develop a sound plan (i.e., pick what looks to be the worst weather day and plan some non-beach activities and set aside the days that are supposed to be the nicest for activities that need sun).  Let’s monitor this game plan as time goes by (i.e., check the radar) and course correct if needed (i.e., not put our head in the sand – pun intended).”

It’s human nature to want to avoid all the “bad” (weather in this case but markets in others) and experience only the good.  But life doesn’t work that way.  The effort to attempt to avoid bad isn’t worth the cost, and it can’t consistently be avoided anyway.  It’s more prudent to set a plan that is reasonable for your circumstances and course correct as new information arrives.  That makes for a great trip, and a wonderfully enjoyable retirement.


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