What a year! This is my last post of the year (no post scheduled for next Tuesday), so it’s a bit of a reflection, and not a specific topic. Yes, we all know it’s been a challenging year and a rollercoaster ride for investors. However, as of this writing, the DJIA is on track to likely turn in a positive return for the year barring any unforeseen large drops in the equities markets between now and December 31. We fear large drops in the market, but hardly anyone is talking about the 12,000 point gain we experienced this year. Let that sink in for a moment… a 12,000 point gain! During a pandemic! For perspective, keep in mind that the Dow didn’t reach, and close above 12,000 points until the year 2012. And this year, we gained over 12,000 points and are now closing over 30,000 on a regular basis.
We could argue the merits of solely focusing on the Dow. After all, it’s a number that reflects only a select group of 30 blue chip companies. If those 30 companies on average are trading lower, the media reports the Dow is down, and we lay investors assume the whole market is down, and thus, our own portfolios (which may not be true). This one stat has become a cultural fixture in our society. We could ponder whether equities are overpriced, fairly priced, or undervalued. After all, for any growth to occur, doesn’t the share price need to be undervalued at a specific point in time? These are all technical issues that we can geek out over and are topics best reserved for cocktails.
What we should focus on is ourselves, and our families. I am not saying that it’s not important to keep an eye on the markets, we definitely should. And, we definitely need a baseline measure of sorts. But the most important thing is that your saving and investing should be consistent, and almost boring. Yes, boring. We need to develop a saving and investing plan, put it in place, stick to it, adjust as necessary and let time and the magic of compounding do its thing. Just keep at it and try not to focus on the daily numbers. How long before the media starts harping about Dow 35,000? I’ve said it before and I’ll reiterate it here again; if you are a younger investor, you have time to recover from market drops. If you are at or near retirement, you should have already put a plan in place that is not dramatically affected by market drops. That is a longwinded way to say, relax, you’ve planned for it. IF you haven’t, we need to talk.
We are in December, it is year-end and you need to keep in mind that some things such as charitable giving, tax-loss harvesting, and certain account funding should be completed by December 31. It’s the final closing day for the fourth quarter and for the calendar year tax payer. It is an important date, so don’t miss this key deadline.
End of year is also one of our biggest holiday seasons. We have Hanukkah, Christmas, Kwanza, and the Solstice just to name a few. All on the heels of New Year’s Eve, so yes, a season. During this time, focus on those things that are more important than investing. Focus on yourself and your family and your friends. I am challenging you to gift yourself with a call, text, or Zoom with a relative you have not connected with in a while, or an old friend. You would be surprised at how good it can feel to reconnect with someone. It’s good for you and for them so reach out.
Here are a few other ideas for focusing on yourself and your own family. Take an early evening walk and enjoy all of the lights this time of year. Tonight, should also be a good night to see the Great Conjunction of Jupiter and Saturn (peak night was December 21). Consider other activities that you like that make you feel good, and improve your mood. Maybe you used to paint, or enjoy photography and got away from it. Now would be a good time to get back to that hobby. Try to keep a daily routine (wake, eat, sleep, exercise at roughly the same time). If you can, try to get outside regularly and enjoy a walk, hike, run, or just some fresh air and sunlight. Be sure to maintain social distancing, wear your mask, and sanitize! Be sure to maintain contact with friends and family even if virtually. I get it, another Zoom is the last thing we want; but it can be different if it's a close friend or family member. Try new hobbies or games (we've taken up Chess at our house thanks to The Queen's Gambit), order a meal, or plan date night. Be proactive about filling your day and staying busy. I may take up quilting again over the winter holidays.
That’s it for this post. Just a reminder to keep an eye on your investments, but don’t fixate on the daily closing numbers. Have a plan, put it in action, and stick to it. More importantly, take care of yourself and your loved ones. Now, go bake some cookies and then go for a nice walk!
As an independent Certified Financial Planner™, I can help you plan for retirement or other goals. I also have some good recipes to share if you are interested, and great trails to share. Contact me and let’s get started on a savings, investing, or retirement plan, or a walk! #talktometuesday #education #Hireaplanner #stressfree #hanukkah #christmas #kwanza #solstice #savings #retirement #CFPPro #vacation #holiday