Always Beneficial & Enlightening
Paul's Financial Journal
September 2021

“The only problem with market timing is getting the timing right.”
~ Peter Lynch”

Record-setting earnings, official FDA approval of the Pfizer vaccine and anticipation that booster shots will begin in September helped drive equity markets steadily higher in August. Stock markets have been on a stellar run this year. It’s amazing to me that the S&P 500 has doubled in price since the lows of last March and notching approximately 70 record highs along the way.

Amidst all that good news, keep in mind that pullbacks are part of the fabric of the equity market. We tend to get three to four 5 percent or more pullbacks in a given year. Given we have not had one in approximately 10 months it’s likely that we’ll see one in the near term. What could cause the pullback is anyone’s guess. It could be concerns over COVID, Federal Reserve tapering or a host of other patterns such as weak seasonal patterns that we tend to see from late August to early October.

See the chart of the month below – the chart shows intra-year stock market declines (red dot and number), as well as the market's return for the full year (gray bar). The chart makes it clear that the market is capable of recovering from intra-year drops and finishing the year in positive territory, which should encourage investors to stay the course when markets get choppy.

Pullbacks are often not a time to panic and should rather be used as a reason to analyze and assess. Under certain circumstances, it may even be the case that a pullback represents an attractive buying opportunity for certain investors.

The majority of declines fall within the 5-10 percent range with an average recovery time of approximately one month, while declines between 10-20 percent have an average recovery period of approximately four months. Pullbacks within these ranges are not uncommon, occurring frequently during the normal market cycle.

Market corrections can be healthy in resetting stock valuations and investor expectations within a longer-term market advance. We know that markets can be volatile in the short term. But we also understand that having a long-term strategic asset allocation plan and sticking to that plan through periods of market volatility can help keep you on the right track toward reaching your financial goals.

Noteworthy links:

Raymond James Listen: The Outlook for Vaccines, Variants, and Elusive Herd Immunity Raymond James Are Your Important Documents Secure & Accessible?

Call me with questions.

What’s Your Money Mindset?

Understanding your motivators can help you better control your wealth journey.

Sensible about dollars and cents? More carefree than careful? Planner or play-it-by-ear? Your money personality affects more than just your portfolio, it likely affects your relationships, too – with your spouse, your siblings and your children. Money means different things to different people, and it’s vital to have a conversation about your spending, investing and saving habits so that you and your family will be on the same page.

According to financial psychologist Dr. Brad Klontz, “We have beliefs clunking around in our heads, and for many of us, they’ve been passed down from our parents.” But if we take the time to dig into our partners’ attitudes as well as our own, we may be able to better appreciate what drives financial decisions, recognize roadblocks and make meaningful progress toward our shared goals.

While there are a few broad stereotypes, only you, your family and your advisor will truly understand your motivations. You may not fit squarely into any of these boxes, but you may recognize a few of your own traits or those of your loved ones somewhere in the mix.

The rookie

You’re thrifty and idealistic – and you’re likely saddled with student debt as you try to launch a rewarding career. You’re optimistic and hope to align your personal and professional lives with the values you hold dear. You’re not likely to be a big spender, but when you do spend, it’s on memory-making experiences like vacations.

Bottom line: You’re just starting out and might fear an unpredictable market. While understanding your risk tolerance is essential to investing well, remember that you need some risk to grow wealth. Fortunately, you’ve got time on your side as well as the power of compounding. Use both to your advantage.

The forward thinker

You’re a little older with an established career. You’re buying houses, having children, aiming for that corner office. You’re busy and earning more than ever, but most of your money may already be spoken for, earmarked for retirement or a child’s education. You’ve got more money than time, and varying priorities compete for attention.

Bottom line: It’s a struggle to find time to dig into your investments and manage everyday expenses as well as your emergency savings. You prefer to delegate some of those decisions to an advisor, offering input along the way.

The influencer

You work hard and play harder. You’re always hustling so you can enjoy the finer things in life. You drive a nice car, carry the latest phone and eat Instagram-worthy meals. For you, your self-worth is tied to your net worth. You believe there’s no such thing as too much money, and you splurge regularly.

Bottom line: For you, a budget may not seem exciting, but it’s a way of holding up a mirror to overspending and staving off debt. You may not enjoy sharing control over financial decisions with someone else, but a trusted source can serve as a guardrail to get you closer to your long-term goals.

The ostrich

An ostrich sticks its head in the proverbial sand and avoids thinking about money. You’re not quite sure how much you have, what you spend or what you owe. And you may feel overwhelmed when it comes to financial details.

Bottom line: Ignoring your finances could mean missing out on an employer’s 401(k) match or not understanding your household expenses should you ever need to take over. If you find money management complicated or cumbersome, rely on your advisor and automate other aspects, like bill paying or contributing to your 401(k).

The stockpiler

You watch every penny, prioritizing saving and frugality. The goal is to have more money than you need, which gives you a feeling of safety and control. You may also feel uncomfortable talking about money, even with those closest to you. If you’re tired of worrying about money, you may want to assign more of the daily details to your advisor, who can shoulder some of the responsibility.

Bottom line: Saving is a wonderful habit, but if you sock most of your money away in cash and conservative investments, you may be too risk averse. Strike a balance to help you reach your short- and long-term financial goals and enjoy the journey.

The scout

The scout is well-prepared for the long haul. You see money as a tool and are willing to use it to achieve your goals. You understand that not everything will go your way, but you’re cautiously optimistic that a long-term plan will eventually get you where you want to go – no matter what is happening in the headlines.

Bottom line: You manage money with both your head and your heart, relying on expert advice when you need it. Be sure to build a trustworthy team of professionals, including an accountant and estate planning attorney, to ensure you maintain balance in all aspects of your financial life.

Planning for your financial future, like climbing a mountain, is a journey that each of us approaches a little differently depending on what we hope to achieve, our time horizon and our willingness to take on risk at that particular moment. The one thing we all have in common is the need for a guide to help us forge a path to prosperity.

Next steps

Level up your financial prowess by:

Being honest about your financial tendencies and identifying habits
Talking to your family about what your shared financial goals look like
Speaking to your advisor to determine how you can achieve your dreams

Here is a link to the full article: What’s Your Money Mindset?

Sources:;;;;;;;; Raymond James research; University of Minnesota

All investments are subject to risk, including loss.

*Views expressed are the current opinion of the author, but not necessarily those of Raymond James. The author’s opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security. Information contained in this report was received from sources believed to be reliable, but accuracy is not guaranteed.

*There is no assurance any investment strategy will be successful. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Past performance may not be indicative of future results. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. Small- and mid-cap securities generally involve greater risks and are not suitable for all investors. Asset allocation and diversification do not guarantee a profit nor protect against a loss. Individual investor’s results will vary.

*Gross Domestic Product (GDP) is the annual market value of all goods and services produced domestically by the U.S. Past performances are not indicative of future results. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success.

*This information contains forward-looking statements about various economic trends and strategies. You are cautioned that such forward-looking statements are subject to significant business, economic and competitive uncertainties and actual results could be materially different. There are no guarantees associated with any forecast and the opinions stated here are subject to change at any time and are the opinion of the individual strategist. Data comes from the following sources: Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, the Federal Reserve Board, and Haver Analytics. Data is taken from sources generally believed to be reliable but no guarantee is given to its accuracy.

*Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and Federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s Initial and ongoing certification requirements.

*The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.

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Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.