Apprise’s Five Favorite Reads for the Week of October 3, 2021

Articles discussing the folly of market forecasts, Steve Jobs' business strategy, raising financially healthy kids, better life tips, and saving funds in an HSA.
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Welcome to October. As usual, the year has flown by. Fall is in the air and Halloween – our son Daniel’s birthday – is fast approaching. The leaves here haven’t started to change yet, but they will soon.

This week’s first article reminds us of the folly of forecasting. Many market pundits speak of doom and gloom on a regular basis. Why? It captures our attention. It scares some investors, too. Investors should expect bull markets, bear markets, and corrections. Unfortunately, none of us can time the market consistently. Any pundit can have his or her day in the sun. Follow their guidance at your own peril.

Investment Commentary

The S&P 500 Index closed Thursday at 4399.76. September’s decline was the S&P’s first since January. It ended the month down 4.8%, its largest monthly drop since March 2020. The S&P rose 0.2% for the quarter, marking the sixth consecutive quarter in which the S&P rose. The Nasdaq and Dow fell for the quarter. It was the first quarterly decline for both since the first quarter of 2020. After three consecutive up days, the S&P is up 2.1% so far this month.

Market-related uncertainty has increased. Investor concerns include the risk that higher inflation – helped by supply-chain issues – will stick around longer than expected. Fears of contagion associated with debt-laden property developer China Evergrande Group also hurt. Other factors included data showing U.S. economic growth is starting to slow and worries about the battles in Washington related to the debt ceiling.

News that lawmakers had reached a deal on a short-term debt limit extension helped drive this week’s rally.

When it comes to investing, please keep the following in mind: Investing is hard; stocks go up AND down; if investing was easy, we would all be rich. If you are looking for suggestions as to what to do, consider taking the following steps:

  • Create a financial plan for your investments;
  • Make sure it reflects your long-term needs and risk tolerances,
  • Practice the discipline needed to stick to that plan.

I often say that you can manage your own money if you have the knowledge, interest, and time to do so. It also requires emotional discipline. The easy part is getting started, the difficult part is staying with it.

Here are the links to this week’s articles as well as a brief description of each:

  1. The Broken Clock. If you spend much time reading about the financial markets, you will likely find someone predicting the next market crash. Periodically, I receive emails asking me about one of these predictions. The first thing I do is do a Google search for the forecaster’s name. More often than not, I find this person has made the same prediction several times in the past. That leads to my normal response: Not all roads point to the sky. Markets will go down at times. Investors should expect market corrections and bear markets. Could the prediction be right? I can’t say for sure. After all, even a broken clock is right twice a day. This article shares some thoughts on these projections and their poor track record.
  1. Steve Jobs Summed up Apple’s Entire Strategy Using Just 6 Bullet Points Each One Teaches an Amazing Lesson. On October 24, 2010, Apple’s CEO, Steve Jobs, sent an email laying out the agenda for the company’s upcoming “Top 100” retreat. The email was recently published due to an ongoing lawsuit. While the email was long and detailed, it included many lessons for business leaders. The highlight, entitled “2011 Strategy, related to the first point on the agenda, which included only six major bullet points. This section of the agenda included the task Jobs assigned to himself. Each one provided an important lesson. More important than the bullet points was their underlying meaning:
  • Be intentional
  • Identify your strengths.
  • Learn from competitors
  • Focus on one big thing
  • Look to the future

If you run a business and want to plan your business strategy, you need to consider each of these steps.

  1. Want to Raise Financially Healthy Kids? Here’s What to Do – And Mistakes to Avoid. This article pairs nicely with my recent two-part blog 11 Financial Tips for Parents to Share With Their Kids – Part 1 and Part 2. These suggestions are more behavioral in nature than the ones I shared.
  1. 100 Tips for a Better Life. I like sharing lists like this one. I think everyone can find at least one or two good ideas. Here are a few of my favorites:
  • #6 – Establish clear rules about when to throw out old junk. (Phil’s note – your kids will appreciate it some day.)
  • #13 – When googling a recipe, precede it with “best.”
  • #32 – Make accomplishing things as easy as possible.
  • #46 – Things that aren’t your fault can still be your responsibility.
  • #54 – Procrastination comes naturally, so apply it to bad things.
  • #71 – A norm of eating with your family without watching something will lead to better conversations.
  • #83 – Compliment people more.
  1. Can You Save Too Much in a Health Savings Account? As I’ve discussed in the past, health savings accounts (HSAs) represent a great way to save for retirement. If you use the funds for qualified healthcare expenses, an HSA is more tax-advantaged than either a Roth IRA or a traditional IRA/401k. The short answer to the question posed in this article’s title is “No.” One caution. You don’t want to leave money in an HSA to someone other than your spouse. Inherited HSAs do not have the same flexibility that inherited IRAs do.

Our practice continues to benefit from referrals from our clients and friends. Thank you for your trust and confidence.

We hope you find the above posts valuable. If you would like to talk to us about financial topics including your investments, creating a financial plan, saving for college, or saving for retirement, please complete our contact form. We will be in touch. You can also schedule a call or a virtual meeting via Zoom.

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