Behaviorial Biases

The last two weeks is a perfect example of why you must not panic and sell when the stock market goes through a period of volatility. If you panic and sell, then you miss out on the rebounds. If you did that, then guess what? You've just discovered two things. One is that you are not a savvy investor and the other is that you need a professional money manager. Trying to skimp on paying a financial advisor just got blown to smithereens by you selling out in a panic. You didn't save anything. Instead you lost money. If you had a professional money manager, then you would not have lost anything and most likely, you would not have created a tax liability either.

The truth is that your knowledge of stock markets, financial planning, understanding investments and the like does not hold a thimble full of knowledge compared to my 31 years of experience. I know that sounds egotistical, but the truth is that if you were a CPA or an attorney for 31 years, then odds are that you would know more about your profession than any outsider using TurboTax or Legal Zoom. Think about it. Can you really disagree with me? Even if you worked construction for 31 years, or were in real estate for 31 years, then the odds are that a first time house flipper, or someone selling their house on their own could not hold a candle to these professionals. Consequentially, I am not really being egotistical when I say that you cannot hold a candle to my level of expertise.

The value of someone like me is the knowledge and experience that they have built over the years and this benefits you. If you choose to take advantage of it.

www.firstcoastplanning.com.

Alfred E. Newman Stock Market

Those of you who remember the cartoon character from Mad Magazine, Alfred E. Newman, will recall that there was usually a caption saying, "What? Me Worry?" This market reminds me of that line. Nothing to worry about with this market. If you have been sitting on the sidelines, you are missing out on one of the strongest bull markets in American history.

The best place to be as an investor is fully invested. It is even better if you can regularly add to your accounts every month. However, there are pockets where you may want to re-position some funds.

There has been some quick and major changes in some sectors of the market. Some sectors such as real estate and utilities are showing some weakness. If you look at these two sectors on a chart, then you will see that there is no bottom in sight right now. A good reason to get out for now and take a wait and see approach as to when to get back in.

This is VNQ - Vanguard Real Estate ETF

This is VPU - Vanguard Utilities ETF

As you can see from both charts, they appear headed lower. A good reason to get out for now. This is a direct result of the new tax law that did no favors for the REIT and Utilities industries.

Thanks.