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The Stakes Have Changed

Nick Murphy, CFP®

Throughout my life, I have always tried to be someone who listens and observes before taking action. It’s similar to the old saying “We have two ears and one mouth for a reason – because we need to spend twice as much time listening as we do speaking”. I am certainly not perfect, and the impulsiveness of human nature sometimes gets the best of me. However, in large part I have found that a thoughtful and purposeful response only after considering relevant facts, information, logic, and reason generally leads to a better outcome.

Let’s be honest. As humans this is a HARD thing to do. It feels much better to react swiftly based on instantaneous feelings, rather than to act with restraint. The immediate emotional gratification is intensely rewarding!

Having observed human nature throughout my 20-year career, I have come to this conclusion. The greater the stakes, the more emotionally reactive humans will be. Think about that concept for a minute, I believe it is accurate in all aspects of life. For example, Steph Curry is probably not going to argue a bad call by the referee during a mid-season game when the Warriors are up by 25 points. He would probably just look the ref, shake his head, and walk away chewing his mouthpiece. However, if they are down by 2, with 30 seconds left in game 7 of the NBA Finals, my assumption is that he may react with a bit more emotion. In both of those instances, the “bad” call might have been the exact same. What was the only difference? The stakes were higher.

The same holds true as we approach the later stages of our lives. When the time window of our earning years becomes smaller and the balance of our portfolio becomes larger, we suddenly realize the stakes have changed. Our situation is completely different than it was 30 years ago. A financial misstep now might lead to financial disaster, whereas we could afford to make a few mistakes in our younger years. Consequently, once we comprehend the magnitude of the situation, sound decision making has the potential to be completely derailed by emotion. If you combine this natural phenomena with the palpable increase of the endless fear-filled cycle of news headlines and negative social media, it is no wonder why an increasing number of adults are struggling with anxiety. This is the exact reason why so many people capitulate and sell at their investments during the worst times. Should potentially life-altering choices with your entire life savings be trusted to anxious, emotional, reactive decision making?

Truthfully, this is one the most compelling reasons I believe successful individuals should hire a CERTIFIED FINANCIAL PLANNER™ (CFP®), particularly as they approach the latter stages of their careers and into retirement. I am convinced that walking alongside a professional to guide them through the inevitable onslaught of emotional headwinds is critically important. After all, there is a reason the greatest athletes of any generation still relied on coaches for accountability, support, and guidance.

To our clients, I hope that our genuine desire to be your trusted guide is evident and tangible. It is the exact purpose behind everything we do. To us, this is much more than a job or a career . . . . it is a calling. As you enter these latter chapters of your lives, we encourage you to lean on us, share your concerns and fears with us, and allow us to be your support system. While I don’t know what tomorrow may bring, I can assure you we will have a disciplined and purposeful plan for how to navigate it.

All things considered; we believe it’s very possible that in the second half of the year things could get better. Inflation could decline at a faster pace than expected and the current expectations of 8-9 interest rate hikes by the Federal Reserve could likely be less than current forecasts. I realize this is a contrarian view, but there are data-driven reasons why this is a possibility. I’ll spare you the detailed commentary.

In summary, we want you to be encouraged and remember the following:

  • The economic outlook may appear gloomy and the markets are volatile, but if you have a well-constructed portfolio that is allocated properly, stay the course.
  • If your financial circumstances have shifted in any way (job change, sale of an asset, inheritance, family structure, etc.) it may be time to review your situation with a professional. These types of events may require adjustments to your financial plan and/or your investment portfolio.
  • If you have cash on the sidelines and have been waiting to invest, this may be the opportunity you have been waiting for.
  • Consistently timing the best opportunity to invest large amounts of money into the stock market is nearly impossible. We suggest investing smaller amounts in pre-determined intervals to reduce the risk of poor timing. This technique is called “dollar-cost-averaging”.

In summary, if you have clearly defined goals and you have implemented a well-constructed financial plan, be confident. Discipline and commitment are the pillars to achieving success. If you lack these things, our team is happy to have a casual conversation about whether our firm is a fit for you and your family.

Counterweight Private Wealth is a Registered Investment Advisor (RIA) with the Securities and Exchange Commission (SEC) with its principal offices in Raleigh, NC and Wilmington, NC. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Counterweight Private Wealth only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Counterweight Private Wealth’s current written disclosure brochure filed with the SEC which discusses among other things, its business practices, services, and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov.

Please note, the information provided in this document is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs. Please refer to the disclosure and offering documents for further information concerning specific products or services. All investing involves risk, including the possible loss of principal. Statements of future expectations, estimate, projections, and other forward-looking statements are based on available information and author’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Past performance of various investment strategies, sectors, vehicles and indices are not indicative of future results.

This material is not intended to be relied upon as a forecast, research, or investment advice, and is not a recommendation, offer, or solicitation to buy or sell any securities or to adopt any investment strategy. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed to be reliable, are not necessarily all inclusive, and are not guaranteed as to its accuracy. This material is provided for educational purposes only and does not constitute investment, legal, tax, or accounting advice. Please consult with a qualified professional for this type of advice for your own unique situation.