While advisors and their clients may look closely at oil prices, interest rates or what’s happening in Greece to have a big impact on their portfolios, the biggest threat to an investment portfolio is you. In his latest blog post and at a panel discussion at Nasdaq Marketsite, advisor Josh Brown argues that the emotions and actions that individual investors take during times of volatility or drawdown will affect long-term returns more than any external factors. Such overreactions can include “excessive trading,” “throwing money at bizarre alternatives like coins, bars, bricks and bullion which have no proven ability to fund a retirement,” and “conflating political views with investment expectations.” Instead, Brown recommends creating a plan in advance. The plan should be agreed upon and adopted in times of clarity and sanity and revisited often.
The financial services industry is still overcoming the public’s lack of trust following the financial crisis. But what actually makes people trust you? Authentic communication that is followed through with actions and rewards, according to Art Markman, a professor of Psychology and Marketing at the University of Texas at Austin. Writing for Fast Company, Markman notes that the phrase “talk is cheap" is old, but it still applies. People actually communicate in three ways: through what they say, do, and reward.
Since the mid-1980s, average retirement age has steadily risen, due to changes in social security, pensions, education and lifespan. But recent data seems to indicate that the trend toward later retirement may be leveling off, according to MarketWatch. The average retirement age for men (64) and women (62) has remained flat since 2008. But those numbers could start increasing again soon, with wages stagnant. A new study from Bankrate found that one-third of people don’t make enough money to save for retirement, meaning they will have to keep working later in life.
It’s a trying time financially for millennials around the United States, and it turns out that simply making ends meet is a top-level concern for Generation Y. According to a survey of 2,041 people ages 18 and over conducted by Harris Poll, 84 percent of Generation Y has financial concerns, where the top issue is not having enough money in emergency savings funds. That number drops to 66 percent for the boomer generation and 83 percent for Generation X.