As another wonderful Thanksgiving is approaching, I thought I’d use this week’s newsletter to enjoy a tongue-in-cheek situational laugh.
Every family has an “Uncle Rico.”
He’s predicted 17 of the past three recessions.
He’s predicted 35 of the five best-performing stocks this year,
and if you aren’t careful, you might find yourself taking investment advice from your well-meaning, fun-loving, pumpkin pie-devouring, former high school PE teacher uncle.
Uncle Rico is sly. He’ll find a quiet moment and pull up on you to share his favorite new stock app.
Unsolicited, he’ll provide 3-5 hot stock picks you must get in on.
After all, he’ll point out that his system predicted the rapid run in [insert best-performing stock].
**We’ve all been in this situation, and we’re just having some fun here – Uncle Rico means well, but…
Keep in Mind
- Uncle Rico likely does not have a written financial plan.
- It’s extremely unlikely Uncle Rico knows how much money he needs to be financially independent.
- Uncle Rico usually takes substantially more risk than required to adequately fund the plan (that he doesn’t have).
Closing the Loop with Uncle Rico
Option 1: Provide a boring nugget of wisdom.
“Uncle Rico, you know that my financial advisor shared with me recently? The worst rolling 30-year return for the S&P 500 is 7.8% annually.
Which means that $100,000 could be worth $951,837 in 30 years!”
SOURCE: https://awealthofcommonsense.com/2023/02/deconstructing-10-20-30-year-stock-market-returns/
Option 2: Offer Uncle Rico another slice of pie or a refill on his favorite beverage (proceed with caution; this could backfire).
Option 3: Check on the kids.
Option 4: Enjoy the solitude of doing the dishes.
What We Believe
- Acting upon a written financial plan is the ultimate safeguard to keep the barbarian of investment behavior away (acting emotionally upon Uncle Rico’s advice).
- Getting quality investing returns is NOT easy. Investment returns are earned. It takes faith, patience, and discipline.
- Your family’s dreams or vision of the future determine your financial plan. Your financial plan determines the portfolio.
- Your plan dictates how much you should allocate to growth, fixed income, and cash.
- We believe investment strategies should be low-cost & diversified.
If you or someone you’re close to could use help aligning their finances and establishing a financial plan, please reach out to us, we’re accepting new clients and eager to help.
Happy Thanksgiving!
Cheers,
Nic
