FINANCIAL CONCEPTS BLOG

Welcome to our blog! Be sure and check back periodically as we post content on a wide variety of financial topics.
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Don't Look at Your Feet

Don’t Look at Your Feet

By the time you finish this blog, you may feel like you’ve completed a Triathalon, running, riding, and swimming. 2020 feels like that. Because this year, we haven’t had the luxury of only running or riding! In our recent webinar, A Way Forward, Capital Group’s Alex DaPron, provided us with perspective for our journey, a look at where we are, and some information about opportunities on the road.

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The Only Certainty in Life is Uncertainty

The Only Certainty in Life is Uncertainty

What a year 2020 has been! We are a couple of months past the halfway point, and it feels as though we have had a decade’s worth of headlines crammed into just a short seven and a half-month window. This year has been anything but smooth, as investors, for many physically or many financially. All around 2020 has brought more than a fair share of challenges. But we have made it halfway! And while uncertainty is still alive and well, we would remind you that in life, the only certainty we have is uncertainty (for those of you who have known us for a long-time, you have heard us say this for years).

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This is Risk

This is Risk

Downward volatility makes all of us anxious. Even those of us who have been through a Bear market eight times….8 times in a 35-year career get anxious.  Bear markets make even the seasoned planner, investor, and money manager anxious.

But having done this eight times, we know it will end. We never know the reason. Or the timing. Or how bad it will be, but we do know, this too shall pass. We plan. We prepare. But we may not have thought the next Bear would be because of a global pandemic. (We also didn’t know in 2008 that we’d experience a global credit crisis.) But history has shown time and time again that the best minds in the world get to work to solve the problems. Then. And now. The media increases our anxiety with cries that the sky is falling. Social media cries conspiracy. We’d say our barber or stylist could tell us the solution, but this time we haven’t been able to visit them.

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Bear Markets are all Similar, but the Problems Always Hurt

When we are in them – bear markets, that is – the anxiety is so high. While by some measurements
the recent bear market we experienced is technically over, many people are still anxious that it could
return. And this time the anxiety isn’t just financial. We have the worry that those we love might get
sick with a virus that is still very unknown.
 
First, let’s define and discuss the “average” bear market. For a market to be defined as a bear market
means that it has declined by 20% or more. The average decline of all the bear markets since the end
of World War II is 30%.1 And they have happened on average every 3-5 years.
 
We have lived through several extremely scary bear markets. The ones that stand out happened in
1987, 2001, and 2008-2009. And of course, the recent bear market caused by the COVID-19
pandemic. Let’s look at them all a little closer.
 
Every time the best companies in America decline by 30% or more, it felt like we had never been
through a time like this. How will this end? When will it end? What if it doesn’t end? Well, we
don’t know the answers. We aren’t embarrassed by that because no one else does either!
 
We don’t know the health solutions. We don’t know how earnings or dividends will be impacted.
And, for a while, we don’t know the true value of the greatest companies in the world. But let’s look
at the last three times we felt like this. We’ll go through the ones we remember clearest first.
 
In 2008-2009, we experienced a financial crisis (versus the current health crisis). Credit completely
dried up. This caused a bear market that was worse than anything we’d seen since the Great
Depression. The market’s fall from peak to bottom was over 50%.2
 
But as with all worldwide problems, financial or health, the great minds work to solve them. The
Federal Reserve and their equals around the world became the lenders – just as they are supposed to
be! Credit became available again. Some financial companies ceased to exist, true. Some companies
dependent on credit got government aid – aid that was paid back. But the market declined. Investors
were anxious, and in many cases, were terrified. But the problems were solved over time. And the
market recovered – and went on to greater heights than ever before. (And this is why when someone
states, “I can’t go through that again,” we ask, “But why?”)
 
On September 11, 2001 we experienced the unimaginable: attacks on our soil. It seemed this might
be World War III. We were scared to see anything else in the sky and worried about other attacks at
home. Where were the terroists hiding? Could we experience biological or nuclear attacks? The
financial markets closed for nearly a week and we thought things would never be the same. But,
being Americans, we mourned, we removed the rubble, and we got back to living. The markets
recovered fairly quickly.
 
Anyone who worked in the financial industry at the time will never forget the beautiful Monday of
October 19, 1987. Back then, we didn’t have online tickers or computers with prices. We had to call
a trading desk to learn about the movement of the market. We could not believe the answers we got.
Our phone didn’t ring off the hook because our clients didn’t have tickers either. They didn’t know
what had happened until they came home form work and turned on the evening news.
 
That infamous day is now called Black Monday. The Dow dropped more in that single day than it
ever had before, to the tune of 22%! It felt like a crash. It felt like a Depression. But it turned out it
was the failure of some financial instruments that didn’t make good sense in the first place.
 
Right now, sitting safer at home, we feel anxiety is at even higher levels because we can’t go about
our normal daily routines. And different than that day in 1987, we all know the movement of the
market minute by minute just by pulling out a device in our pocket! So, given that anxiety, it’s hard
to believe this will ever end. But it will end, because it must.
 
Remember, while the solutions aren’t happening as fast as we want in this world of instant
information, we know that scientists, medical professionals, and epidemiologists are working to find
treatments, therapies, and a vaccine. When? We don’t know. When will the curve flatten? We don’t
know. How long will we social distance? We don’t know. But eventually this will end. And the
world will go back to living. In America, and around the world.
 
The market will recover and advance. (If history is any guide.) But then there will be another
unimaginable crisis. It’s the nature of the world. It’s the nature of the market and owning what we
need to meet our goals and dreams.
 
But as much as the other events have moved to the back of our memories, and the markets have
moved back to where they were - and even higher again and again – it’s natural for investors to
believe that this time is different. It’s not. The cause may be different because the cause is always
different. But the pain is the same – and the triumph of overcoming that pain will be the same, too.
The next time we write about a crisis, we will likely reference this one. Eventually, this will feel as
far distant as 1987, or even 9/11. And we will remember once again that the best reaction to a bear
market is no reaction at all.
 
1 “8 things you need to know about bear markets,” CNBC, https://www.cnbc.com/2015/08/24/8-things-you-need-to-know-aboutbear-
markets.html
2
“United States bear market of 2007-2009,” Wikipedia,
https://en.wikipedia.org/wiki/United_States_bear_market_of_2007%E2%80%932009
3
“Black Monday (1987)”, Wikipedia, https://en.wikipedia.org/wiki/Black_Monday_(1987)
 
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This Has Been Hard

How are you doing? Are you holding up ok? These are the two questions we find ourselves asking friends, family, and co-workers daily. There is no doubt about it, 2020 is going to go down in the history books as a difficult and challenging year for many. Many closed their businesses or are working remotely. Others are isolated at home away from loved ones.  And many work the front lines of this global pandemic.  We’ve seen downside volatility and uncertainty in the markets and investment portfolios, and a strong economy has taken a hard hit. Economic and physical health concerns can take a toll on our mental health. We’ve been hit with a lot!
 
It’s hard being away from loved ones. It’s hard not giving your mom a hug or holding hands with a grandchild. It’s hard to be away from church gatherings or to miss seeing your child’s high school graduation. It’s hard to close your business to stop the spread, and we can only imagine how hard it is to worry about where the next meal will come, like so many families across the country are. It’s hard not knowing when things will return to “normal.” There is no doubt about it. This is hard. 
 
Are we out of the woods yet? Are good days right around the corner? We wish we knew the answer, but we don’t and, no one else does either. Do we still have faith in the future? Absolutely! We believe very strongly that out of the gloomy clouds of fear and uncertainty, we will see a bright future in the world and markets alike. Hard times have come before, and hard times will come again. In every hard time our country has faced, we’ve always come out stronger and better prepared for the road ahead.
 
We plan for bumpy markets in every financial and investment plan that we create. We know there will be downturns along the way. We pride ourselves being there for you during moments of market uncertainty, and uneasiness…truly this is when we earn our keep. This is hard, and these times are scary.  Always remember, we are here for you. If you need someone to talk too, we are here. Of course, we are always available to discuss your investment portfolios, but we are here to talk about anything. If you need help getting groceries or medical supplies, we are here. We are all in this together! Hang in there, and remember we are just a phone call away!  
 
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Days vs. Decades? Fear vs. Faith? Despair vs. Hope?

As we celebrated Easter a little over a week ago, I realized we have our folks focus on the decades.  Because only occasionally do days mean a lot. Like the three days between Despair and Hope. Hate and Love. Those three days meant so much because they meant eternity. There are other times when a day means a lot. Wedding Days. The Day a Baby is Born. The Day a Grandchild is Born. The Day we Retire. Those days mean love and joy for many decades. 
 
Often when you ask us, should we do something. We ask have your dreams changed? Has your life changed? Have those days that mean the most to you changed? Headlines will scare you into thinking all the things I care most about are now in danger…there is despair. I’m afraid that there is not hope. That I don’t have the days needed.
 
Our easiest answer would be to tell you, let’s do something. You will feel better if you do but we know doing something can ruin your plans. We know that there will be wolves in sheep’s clothing, telling you there is a more comfortable way. There isn’t. 
 
Reaching all the things we want most in life require time, faith, and hope in the future. We know those are requirements for the most important things of life. 
 
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National High Five Day

 
 
Each year on the third Thursday in April, we observe National High Five Day. Typically, this is a fun day where you can “High Five” everyone that you see.  🙌Of course, it’s a little different this year.
 
We can’t exactly High Five each other right now, so know that we’re sending you a virtual one. We’re especially high-fiving our local and national USPS workers right now. From the census to the November election, the Postal Service is critical to American democracy and day-to-day function.
 
Like so many businesses, the United States Postal Service has been hit hard by the coronavirus. Mail volume is down nearly a third over this time last year and continues to fall. These men and women work tirelessly to fulfill our essential need for the postal service. 
 
This year, the Postal Service is also playing an expanded role in sustaining democracy. In the new world of social distancing, mail-in and absentee voting are crucial to ensuring that Americans do not have to risk their lives to cast their votes.
 
Whatever your hobby is right now, see if you can turn it into a sweet Thank You for your local postal worker. Maybe sew them a mask, make an ear-saver for those pesky mask straps, or even a carefully-made bag of baked goods. Let’s show them how much we appreciate their unwavering dedication and service.
 
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Straight from the Heart

Today, I write again,  straight from the heart.

I could tell you about statistics. I could tell you about my call with economists yesterday.

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Staying Home To Do Our Part

In these days of travel restrictions, several conferences have become teleconferences. Today, I had two such meetings. Although I love to travel and visit different places around the country, I’ve got to say; it’s nice to be at home in my bed tonight! 

Thank goodness the opportunity to learn is still available every single day. (Parents enjoy the time you are learning with your kiddos from home! Granted, I would not want to be teaching algebra and science!) When this is all over, we will know who the real heroes in our community are. The teachers, the administrators, the health care workers (all of them), the people who stock our groceries, the drive-thru clerks, and the truckers! And of course, the people who manufacture the paper goods!

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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.

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Time In the Markets is More Important than Timing

When we have volatile days, up or down, it’s easy to think the pendulum swing has begun and it will never stop. But if history has shown us anything, that is not the case. The pendulum swings both ways. And over time, the advances have far outlived the declines.

We recently shared an essay illustrating the importance of why we believe it is critically important to stay invested – through both the ups and the downs of the market. While today’s headlines may be filled with negative news, this essay shows how quickly things can change! Time in the market is far more important than trying to time the market ups and downs. (If you’d like a copy, send us a message, an email, or give us a call)

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HEADLINES! HEADLINES! HEADLINES!

Or As Chicken Little Cried , “The Sky is Falling! The Sky is Falling!”

The headlines are terrible. They seem worse than they ever could be or ever have been! The world is going to “you know where” in a handbasket. Things couldn’t get much worse.  Or, they are going to get much worse week after next. (As the media would have us believe.)

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All in the Family....YOURS and OURS

We are happy to introduce you to our newest team member, Leslie F. Richmond. And yes that F. is for Ferguson.  Did we expect to be working with a daughter, or a sister? Nope. But we are so excited to have her FINALLY join your financial planning family!

Leslie will serve as our Relationship/Communications manager. Her job will be to help us stay in touch with you, often!

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Happy New Year and Happy New Decade

I know there is debate, and some remind us the new decade doesn’t start until next year, but I’m excited to be heading into the 5th decade of my career. And Scott is heading into his 3rd.

As I looked back over the last decades, I realized as we've helped families live through these times, we’ve helped families through lots of headlines and lots of life.  We’ve seen so much. The 80s, the 90s, the 00s, the 10s, and now the exciting roaring 20s.

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FOOTBALL DOWN SOUTH

 

Scott and I don’t have a lot of hobbies but in the South, college football is definitely a hobby! With a long season, sometimes longer than others 😊, and our own superstitions, college football requires commitment. And our hobby is Alabama Football. As you can imagine, November 2019 won’t go down as our favorite football month. But that doesn’t stop us from saying ROLL TIDE ROLL!

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Sometimes Grandmothers Do Know Best

 

Often, we tell you to stay the course, or no action is the best action. But successful financial planning is about following some principles that are fairly simple, but not always so easy to follow! That’s why we remind you whenever we get the chance; we earn our keep by keeping your eye on the plan. 

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Return of Volatility? At Financial Concepts, we never knew it left!

One of the most frustrating headlines to read is that the market was volatile today or it’s turbulent again. Again? When wasn’t it? Both the biases that up is normal, and down is volatile or bad are wrong.

 Webster’s defines volatility as the tendency to change quickly and unpredictably. CHANGE. UNPREDICTABLY. Notice that…change without specifying direction. And the most important adjective we stress is unpredictably. No matter how many brilliant talking heads tell us they can predict when and which direction, they can’t. No one can. Even the person that was right, once or twice before.  Remember a broken watch is right twice a day!

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Plan Today for Happier Tomorrows

 

“If you don’t know where you’re going, any road’ll take you there.” Lewis Carroll, Alice in Wonderland

 

You’ll have happier tomorrows if you start planning today. It’s that simple. The benefit of a plan is as that silly commercial says……PRICELESS!

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I'll be successful when I hit a certain number.

This week marks the birthday of one of the, if not the, most successful investor the world has ever known. Warren Buffett, the Oracle of Omaha, turns 89. And his wisdom or quotes have been shared many times over. Those who didn't learn from them, were often at least entertained by them. Reading some of those gems in an email today, reminded us that many explain what we believe to be the keys to financial success very simply, and sometimes quite humorously. Below find just a few of our favorite Warren Buffett quotes:

1. Someone's sitting in the shade today because someone planted a tree a long time ago. It all starts with a plan for the future.

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Financial Noise on Full Volume

Have you ever been to the doctor and stated what WebMd said? I did that once. I told my doctor that my Apple Watch had woken me up to tell me my heart rate was low. He asked, well what did Doctor Apple tell you to do? I got his point. Doctor Apple doesn’t know me or my health. Doctor Apple was reacting to one number.

Last week we sent our friends a letter that explained the Rules of the Financial Classroom. If you didn’t see the letter and would like to, let us know.  Today the financial “experts” on television screamed scary headlines. All were variations of The Sky is Falling.

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A Trumpet Call of Freedom

Everyone knows that July 4th is “America’s birthday.”  It’s the commemoration of our national independence.  A day for fireworks and fun, patriotism and pie.  A celebration of America itself. 

But in a sense, the Fourth of July is even more than that. 

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24/7/365

 

We are all bombarded with information and headlines from various news organizations and social media platforms, 24 hours a day. The power of technology has put a world of information at our finger tips. We are all just one click away from infinite information at any given moment. The more eye-catching the headline the more likely we are to click, read, or watch. And unfortunately, the more dramatic or sensational the story, the better it sells, making it more likely we will tune in and stay glued to the screen. A recent Nielson & Pew Research Center study found that heavy cable TV news viewers watched an average of 72 minutes of news every day…or 26,280 minutes a year.

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Did you know doing nothing is taking action?

We are bombarded every day with information that tells us we should be doing something with our money. But sometimes doing nothing is the most important action we can take.

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The Power of Gifting

The Power of Gifting

With Christmas just a few days away, it’s probably not a stretch to think that you may have last minute Christmas shopping on your mind. With gifting in mind, we want to quickly outline some of the benefits of investment-related gifting.

First of all, financial gifting can have both positive financial and also internally gratifying results. Gifting can be a great estate planning tool that allows you to transfer your wealth to others during your lifetime.

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Cyber Security

October is synonymous with fall, Halloween, and more recently Breast Cancer Awareness, but what many don’t know is that October is fast becoming Cybersecurity Month.

With the internet becoming more prevalent worldwide in the last decade, it’s important for everyone to be secure when accessing the internet. There are many different ways your computer may be targeted. From using a credit card to purchase things from your favorite store online, to accessing the internet at the airport, there is potential for your computer to be targeted.

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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.