Is the Sky Falling? 6/4/22

Friends of NFC,

As I write, war continues to rage in Ukraine, markets are selling off, inflation is now a growing concern, recession is looming (it always is), and we now know that something called Monkeypox exists, for cryin’ out loud! At least Covid is over. Or is it? Sounds like the sky is falling.

A visual I find to be foundational when presenting to groups or speaking with NFC clients is below. I encourage you to take a moment to digest this image before addressing the most recent collection of “crises” we face on our collective financial planning journeys to building and preserving our financial fitness. Were I inclined to tattoos, this image might take center stage on my body canvas : ).

Each of us is on his/her own unique path for providing safety and security for ourselves and our loved ones. Some are retired/retiring, some are just starting their careers, some are single, some are married with kids and grandchildren, some are trying to buy a house, others are figuring out how to pay kids’ college tuition. Each stage brings unique challenges and opportunities. One of us just celebrated her first participation in the stock market last month, buying a share of VTI (Total Stock Market ETF from Vanguard)! Others, like myself, have been investing for decades and seen our net worth drop by hundreds of thousands of dollars in the first 5 months of this year. (Total Stock Market Index Fund (VTSAX) return year to date: -%14.2%.)

So what is a person to do in times of uncertainty? First, recognize we are always in times of uncertainty. Second, know that my crystal ball is no better than yours, or any other financial planner’s, advisor’s, or coach’s. Third, consider reserving your energy for controlling the controllables, and focusing on what matters most. Should you need help doing this, reach out and we can schedule our next meeting.

As for myself, here is what I am doing during this year’s crisis de jour:

1. Maintain my regular Dollar Cost Averaging into all of my tax-preferred retirement accounts (Roth IRA, 403b, and 457b).

2. Re-read portions of The Simple Path to Wealth* or The Little Book of Common Sense* Investing can be a nice refresher for why this matters.

3. Turned my DRIPs (Dividend Reinvestment Plans) back on in my taxable portfolio (I had turned them off for the past year to raise some cash).

4. Bought my first iBond in April; will likely buy another in my wife’s account in October.

5. Stopped checking my Personal Capital account net worth page as frequently, but still use it to manage/pay bills.

6. Enjoy time with my family and sleeping well at night because I know that my savings/ investing plan is solid and automated.

I trust you are enjoying this tremendous start to summer!

Warmest Regards,

David

* Courtesy gift to all NFC Clients at first meeting.