Goals For 2018
By Roger Nusbaum, AdvisorShares ETF Strategist
I think the biggest challenge in the investing landscape in 2018 will be resisting the temptations that go with chasing performance; going heavy in the hottest of stocks/themes after they have already gone up a lot.
Everyone knows about fear and greed and the tendencies to experience both at the wrong time (buy after a large run up, sell after a large decline). As things like bitcoin, blockchain and maybe even some of the mega cap tech stocks have done well, regret can creep in and pull investors away from what they know is best for them.
Unfortunately, it is human nature to succumb to these emotions. Having the introspection to recognize them in yourself as well as see it in clients can help mitigate the consequence of this. The point is not that an investor should not add some exposure to what is hot but that they not go heavy trying to make up for gains they may have missed earlier in the theme.
Mark Yusko from Morgan Creek is all over Twitter calling for bitcoin to go to $400,000. You can follow him to learn why he thinks that. If he turns out to be right, it is a good bet there will be ups and downs along the way. If the “ups” are big then all is right with the world but if the “downs” are big, really big on the way to Mark’s target there will be investors who panic in during the downs, sell out and then watch it go back up.
Someone who unfortunately follows this arc with 1% of their assets will be bummed but not damaged. Someone who follows this arc with 25% of their assets could easily be forced to delay retiring or otherwise alter their financial plans. You might read that and think “duh, who the hell is going to put 25% into a crypto currency?” Trust me, greed makes people do crazy things.
Changing subjects, there was a meme going around social media that said the following:
You’re killing yourself for a job that would replace you in one week if you dropped dead. Take care of yourself.
There is a personal finance aspect to this sentiment that ties to a quote from Coastal Carolina football coach Joe Moglia (earlier on in his career he was the CEO at TD Ameritrade) who said that “no one will care more about your retirement than you.”
One goal for 2018 should be to take more advantage of retirement vehicles available to you. Depending on the circumstance maybe that means upping 401k contributions, the limits are pretty high especially if you’re at least 50), funding a Roth IRA if you meet those income guidelines, funding an H S A account which has limit of $6950 for 2018 ($7950 if you’re at least 55) and then making sure you similarly fund accounts for your spouse.
If you already do those things, then you might be able to spread the word to your friends and families and any other circles where you have influence. If you’re an advisor you obviously talk about this with clients, but I also know that non-clients also ask you for advice too. If you are an individual investor and you’re interested enough in investing to read this blog, then you are probably the go-to person for this stuff socially and in your family so spread the word.
The information, statements, views, and opinions included in this publication are based on sources (both internal and external sources) considered to be reliable, but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness. Such information, statements, views and opinions are expressed as of the date of publication, are subject to change without further notice and do not constitute a solicitation for the purchase or sale of any investment referenced in the publication.