Welcome to our blog! Be sure and check back periodically as we post content on a wide variety of financial topics.

Home Sweet Home

Be fearful when others are greedy and greedy when others are fearful.

                                                                                                                   Warren Buffett

In scary times, we tend to look to see how much have I lost? But did you know, you don’t lose anything unless you sell something when it’s down? Selling when values are down will lock in a loss, for sure. That minute. Forever.

Investors tend to focus on the bottom line. It’s natural with headlines screaming what went up and what went down. But planners know, the bottom line isn’t always what matters.

What matters most is what your investments can accomplish for you. What your investments can do for your lifestyle. The biggest fear shouldn’t be is the value or bottom-line going down.  The concern should always be am I invested in a way that I can always do the things I choose?  For most, if not all of our clients, they are investing for income…either now, or for later, or for those they love to have income. If your investments continue to give you the income or the lifestyle you desire now, does the bottom-line really matter?

Remember, you can think this way about every thing you own. If the housing market suddenly declines, but you still live in the neighborhood you want, in a comfortable place that is warm, dry and cozy, does it matter if housing prices are down? You are accomplishing what you want with this large investment. A nice place to live.

Back in the “olden days” or when Rhonda first started helping clients retire, she called it mailbox money because your investments sent you a check in the mail, month in and month out. Now the deposits go right to your bank account on the right day. Historically over time the bottom line grows. Not every year does it grow. And rarely like it did last year in 2019. And sometimes it does go down like it did in 2008. But over time it grows.

It zig-zags its way up, or at least it always has, if history is any guide…and really history is the only guide we have.  The average annual return for a conservative mix of stocks and bonds has been 8.8% a year for the last 30 years. March of 1990 to February of 2020. If you had started taking 5% income 30 years ago, and increased it by 3% each year for a cost of living increase, you would have income that grew by double what you started with AND your principal grew to 4 times what you started with. (Of course, past results are not a guarantee of future results.) But this conservative portfolio of half stocks and half bonds would have produced more income so when the light bill went up, or the grocery bill went up, or you planned a big trip or you had to buy a car, the mailbox money grew!  

But we know some of you will say but I don’t have 30 years. None of us comes with an expiration date stamped on the bottom of our foot. And everyday we meet with retirees talking about helping their parents (while helping their children). Life expectancy is increasing. The longer we live, the longer our parents live, the longer we are likely to live. Whether your lifetime is 30 days or 30 years, the rest of your life is what we call a long-term investment horizon.  And we know some of you will say, but the bad days were so bad. In this conservative investment, the worst was uncomfortable. But as long as you didn't sell when it was down, the decline didn't matter for the plan to work. but the worst was uncomfortable....down right scary. The bottom line was down 28%. Down from an exaggerated high. If you had $100,000 invested, the value was $72,000 at that scary bottom.  But you know what? The income was $416 a month. And the next year it was $428. And the next $441. and you get the idea....It took a little while (4 years) for $100,000 to be back to $100,000, but the mailbox  money came.  That's what the folks in the cozy, warm, dry house needed. The money to pay all the bills and still help their families and enjoy the lifestyle they dreamed and worked toward. 

Source: American Funds Hypothetical Illustration for American Balanced Fund March 1990 through February 2020.



Staying Home To Do Our Part
Time In the Markets is More Important than Timing


No comments made yet. Be the first to submit a comment
This site is only intended for clients and interested investors residing in states and countries in which Financial Concepts is qualified to conduct investment advisory services.
Financial Concepts is a registered investment adviser located in Columbus, MS. Financial Concepts may only transact business in those states or countries in which it is registered, or qualifies for an exemption or exclusion from registration requirements. For non-clients of the firm, Financial Concepts’ web site is limited to the dissemination of general information pertaining to its investment advisory services.

Please contact Financial Concepts at 662-327-1480 to find out if we may conduct advisory business in the state or country where you reside. Accordingly, Financial Concepts does not, and will not, effect or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, through this website. Any subsequent, direct communication with a prospective client shall be conducted by a Financial Concepts representative who is either registered or qualifies for an exemption or exclusion from registration in the state or country where the prospective client resides.