Read more about the article Real Life Investment Strategies #7: A Better Alternative to Blindly Following “Investment Tips” including Focusing on Current Income or Yield

Real Life Investment Strategies #7: A Better Alternative to Blindly Following “Investment Tips” including Focusing on Current Income or Yield

Why Investment Tips Fall Short … and What to Do Instead Much of what passes for financial wisdom is built on speculation, short-term thinking, and hype. Stock-picking, market timing, and economic forecasts might make for engaging headlines, but they don’t hold up under scrutiny. The reality? An evidence-based, disciplined approach to investing is far more effective. Let’s have a look at some mainstream investment advice you might be hearing people talk about or maybe some investment rules-of-thumb that are not likely to pan out for you, if you follow them…

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Read more about the article Real Life Investment Strategies #6: Beware the Risk of the Cult Stock Roller Coaster

Real Life Investment Strategies #6: Beware the Risk of the Cult Stock Roller Coaster

The Pitfalls of Fanatically Following the Stock Hype It seems to me that the central tenant of the financial media (group-think central) is to glorify stocks or sectors that have experienced recent outsized returns. The hype of cult stocks extends and is amplified by social media channels and its various influencers. Ask any reputable financial economist about these past monumental gains and they will indicate that “past performance is not indicative of future returns”. Despite the restrained advice of these financial experts, it’s easy to get swept up in the hype surrounding these popular stocks and investment trends. Some choose to surrender to FOMO (fear-of-missing-out) and follow these financial fads. for the chance of scoring a big financial win with a little excitement on the side. While these stocks may seemingly promise rapid growth, there are some obvious (and not-so-obvious) risks of chasing high-flying stocks. It’s important to consider the other option: a more thoughtful, measured investment plan. Maybe not as thrilling, but certainly a better path to reaching your long-term financial goals. Let’s explore some examples of how some stocks can achieve a cult-like following and a take realistic look at how they could play out for some real-life investors.

Continue ReadingReal Life Investment Strategies #6: Beware the Risk of the Cult Stock Roller Coaster
Read more about the article Real Life Investment Strategies #3: What is the Difference Between a Lifestyle Reserve and an Emergency Fund / Financial Cushion?

Real Life Investment Strategies #3: What is the Difference Between a Lifestyle Reserve and an Emergency Fund / Financial Cushion?

Both Emergency Fund and Lifestyle Reserve Planning are Crucial Whether You are Accumulating Wealth or Getting Ready to Retire Having an emergency fund is common advice, whether you are reading this in the financial media or hearing it from a financial advisor. Many people who are later in life and feeling comfortable with their financial situation might disregard this advice, assuming it only applies to those that don’t have as much financial stability. The truth is that an Emergency Fund is something that everyone (even you!) should have. In addition, the added financial security planning of a Lifestyle Reserve should also be part of your financial plan. So, let’s explore exactly what an Emergency Fund is, how a Lifestyle Fund is different, and why both should be in place to ensure long-term financial alternatives and adaptability. Most importantly, I’ll highlight how this applies to Suzie & Trevor Hall (The Accumulators) and Jim & Carol Oates (Almost Ready to be Retirees), so you can see how it can work for you.

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Read more about the article Real Life Investment Strategies #2: Debunking Retirement Financial “Rules”

Real Life Investment Strategies #2: Debunking Retirement Financial “Rules”

Should You Plan Your Retirement Savings According to the 4% Withdrawal Rate Rule or 70% of Pre-Retirement Income Rule? Whether you’re an accumulator or preparing for retirement, how do you plan for saving AND spending your hard-earned cash in retirement? My Answer: It depends. All those popular retirement spending rules you hear about in the popular press or through your favourite financial guru really should be called guidelines. Augmenting blunt estimates with finer-pointed planning may not be as quickly accomplished. But it’s a far more effective way to plan for how much to save as you accumulate wealth, and how much to spend as you withdraw it. In fact, it’s best to consider retirement spending as being a variable process, versus a one-and-done equation. Which is why it depends. LET’S BEND SOME RULES: THE 4% WITHDRAWAL RATE RULE & THE 70% PRE-RETIREMENT INCOME RULE

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Read more about the article Real Life Investment Strategies #1: Will Geopolitics Ruin My Financial Plans?

Real Life Investment Strategies #1: Will Geopolitics Ruin My Financial Plans?

Timeless financial tips are well and good - but how do they apply to my investment decisions in real life? To address that question, I’m launching Lowrie Financial’s “Real Life Investment Strategies.” Each post in this new series will use case studies to illustrate the choices real people are making, as they contemplate money management concerns in real time. Many have active concerns around geopolitical events and their impact on their financial futures - clear theme emerges: • worrying thoughts about current events, • what the geopolitical climate may mean to your money, and • what investment strategies to avert setbacks for your financial future So, let’s address some of the more worrisome flash points looming large at this time: the world, its politics, and its politicians.

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Read more about the article This Is Your Investment Brain on Pessimism

This Is Your Investment Brain on Pessimism

Have you been reading the headlines, viewing your investment portfolio, and assuming the worst is yet to come? Welcome to your painful crash course on what market risk really looks like—and more importantly, how it feels. Most investors say they’re ok living with periodic market risk, as long as it helps them achieve better returns over the long run. We accept (in theory) that tolerating the interim damage done to our own investment portfolios will help us meet our long-term financial goals. But that’s investment risk in theory. Since it’s been a long time since we’ve encountered an extended bear market climate, you may have forgotten or never known the reality of it. It may not have clicked then, when significant market declines happen, it is usually due to despairingly bad news … amplified by headlines screaming how things are only going to get worse from here. The reality is, when we’re in the middle of a storm of stuff, our behavioural biases make it very difficult to believe we’ll ever see better days.

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