Good afternoon everyone. In case you missed it, here’s what happened in the markets this week. This week it seems that no news is good news. So, in the absence of any breaking news I’m going to change the format up a bit and hit on articles related to Investing, Retirement, Personal Finance, and a Random Read that I want to share.
The Rise of Amazon from The Irrelevant Investor - There’s a hard truth behind if only I’d invested in…and this article does a great job of using Amazon as an example. In a nutshell if you’d invested $10,000 in Amazon in 1998 your investment would be worth over $3,000,000 today. Seems perfect. So why am I not going out trying to find the next Amazon for my clients? The reason is that almost immediately after purchasing your stock, from 1999 to 2001, you would’ve had to watch the value of your stock plummet by a whopping -93%. How many people out there could actually stomach that much of a dip? My guess is not a lot. So there’s no sense beating yourself up over a lost opportunity. There’s a lesson here somewhere….For me it’s whenever you’re presented with an opportunity that could be the next Amazon or Apple ask yourself if you’re willing to watch the value of your investment decrease by -93% AND have the conviction not to sell—and if so, how much of your savings are you willing to risk on such a gamble?
The Ten Commandments of Retirement from Marketwatch - Such a great article on what you need to know heading in to retirement. Here are some of the highlights:
2. “Remember that Social Security is designed to replace no more than 40% of pre-retirement income—and for many, that 40% is an overestimate, because the benefit calculation is skewed toward lower income Americans. In retirement, you’ll want some steady sources of income, and Social Security is probably the most secure. But recognize that it’s intended to be a minor part of your total income.”
7. “Save as much as possible as soon as possible. You can always reduce your savings rate later. Investment compounding really is powerful. Load up on savings early in your career and let the money work for you in the decades that follow. When money gets tight, such as when paying for the kids’ college, you may need to trim savings for a few years. But if you over-saved during the first 10 years or so of your career, you will likely still reach retirement in good shape”.
8. “Recognize that your taxes may not be lower during retirement. All the signs point to higher taxes in the future for everyone.”
Teaching Finances to Your Future College Student from Capstone Wealth Partners - When should you start discussing finances with your children? It’s a tough question to answer. But as it turns out, during the college admissions process might be the perfect time. This article shows you how going over what a post-grad budget will look like with your kid might actually be the best way to help them decide on a college too. Budget spreadsheet included.
Can You Tell Sports Commentary From Political Commentary from FiveThirtyEight - If you do one thing this weekend watch this video and see how well you do.
Have a great week everyone! And as always, thanks for reading.
*These are the general views of Stanton Burns and they should not be construed as investment or financial advice for any individual. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Stanton Burns does not maintain positions in any securities mentioned as of the writing of this article. Past performance is historical and does not guarantee future results.