• $81 the next month
• $121 by January, 2021 
• $147 (approximately) by November, 2021
• $119 by September, 2022
• $146 (July, 2023)

Which raises the question: Is this kind of volatility normal?

Maybe we need to define “normal.” One wag has suggested that the only normal people are the ones you don’t know very well yet. The same might be said of the stock market. 

Yes, the market’s present behavior is quite normal. It just isn’t the normal we want.

Perhaps the real question behind the question is “What keeps the market going up?”

Short answer: The same three things it has always taken to make the market go up: an alignment of earnings, events, and emotions.

• Earnings. Nothing happens in capitalism until somebody makes a profit. The good news is this happens most of the time. According to Standard and Poor’s, since World War II, the profits of corporate America have grown at a fairly steady clip of about 6% annually.

If that were the only determinate, we would have a stock market that would grow at 6% per year, and that would be that. 

But as anyone knows, that’s hardly what happens! The next two elements of stock market growth explain why earnings are never enough.

• Events. Life happens. Wars break out. Terrorists attack. Nations default on their debt. Consumers borrow too much money. Hurricanes hit population centers. Political regimes are overturned. An oversized generation retires. 

For the most part, events are short term in nature and in effect. Markets move dramatically when, say, a novel virus shuts down whole economies, but the markets quickly regain their equilibrium. 

The reason most events do not have a long-lasting impact is because they do not significantly affect the corporate world’s ability to make a profit. No impact to earnings, no long-term effect.

Other events, however, are not so short term in their impact. Events like the financial crisis of 2007, the U.S. governments’ growing unfunded liability from Social Security and Medicare—these can all affect the long-term viability of corporate earnings, directly or indirectly. The markets know this and don’t overlook such events quite so sanguinely. 

• Emotions. Human beings evaluate both earnings and events through a filter called “emotions.” Those fickle emotions process the facts of earnings and events and attach to them a magnification factor that is somewhere up or down the “optimism / pessimism” scale. 

In the late 1990s, investors in the American stock market had experienced a nearly 20-year run of growing profits and upward market movement. Such factors can become self-fulfilling prophecies. 

In 1980, investors felt pessimistic about the future and would only pay about ten times the earnings of the average stock. So, if a company earned $5 a share, investors were willing, due to their emotional evaluation of the future, to pay $50 per share for the company’s stock.

Nineteen years later, in 1999, the same average company could earn $5 per share, and command $150 per share of stock, or 30 times earnings. It got so frothy that stocks of technology companies were selling for hundreds of dollars per share, while earning zero—and, yet, we were optimistic about the future!

Such “earnings multiple expansion” is always a function of growing or shrinking optimism about the future. In other words, emotions. 

As of today, the market is trending up. How long will this last?  Will we have a downturn soon?

As soon as I get the word, I’ll pass it on to you!

One final question around the idea of emotions…Have you settled on a plan for turning your retirement assets into retirement income—a plan you feel good about?

If not, email me at bmoore@argentadvisors.com. I’ll send you a free link to take the RISA^® Profile. This simple, ingenious quiz takes mere minutes, and it can help you create an income plan that makes fiscal sense and is a good fit emotionally. (So that you don’t spend life’s next chapter fretting 24/7!)

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

 “A friend introduced me to a very nice Christian man who is recommending I put my money into some kind of annuity or bonds or something like that. I’m not a stock market person. I don’t understand finances, but I really like this young man. He seems so honest. Does this sound like a good deal?”

My stock answer is, “No.”

Not because I know this is a questionable deal, but because I haven’t heard enough.

When evaluating offers (financial or otherwise), there are always two pertinent factors to study: the proposal and the person.

I hope this young man is exactly what he seems. However, I also know what victims often say right after being fleeced: “Oh, but he seemed like such a nice, Christian man!”

Classic logicians call this an “inverse ad hominem argument.” You rely too much on your evaluation of the person, and not enough on your evaluation of the person’s proposal.

Again, I am not saying this young man is a con artist. I’m urging you to look deeper.

The failure to investigate is how bad deals get consummated every day. A bad idea is easy to hide inside a Trojan horse of charm and smooth talk. 

So how does all of this apply to you?

When you are evaluating any idea or proposal, financial or otherwise, I suggest balancing two parts of the value equation: character and content. 

First, evaluate the other person’s character. You like him. Great. Now, go ask others who have dealt with him over a long period of time what their experiences have been.

Check references. Don’t simply settle for murky promises from a winsome personality.

Second, consider the content of the offer. What exactly is this person proposing you do? 

In the example above, both bonds and annuities were mentioned. Those are very different instruments. Did the person really recommend both? Or is there a chance you misunderstood? 

You need to make sure you understand the content of the proposal. Here’s a good test: Can you explain the offer to a friend or family member in such a way that they understand the broad outlines of the proposal?

Until it’s clear to you, it should be a “no go.”

By focusing on the person (but not the proposal), you leave yourself open to a scam. And by focusing solely on the proposal, you may end up with a great plan/idea that is being overseen by someone who’s incompetent (or dishonest).

Character and content—both are important. Don’t leave out either in your decision process.

One last thing…is the question of retirement income keeping you up at night? Are you wrestling with the question: “How can I turn my retirement assets into money I can live on for the rest of my life?!”

If so, email me at bmoore@argentadvisors.com. I’ll send you a free link to take the RISA^® Profile. This simple, ingenious quiz takes mere minutes, and it can save you a LOT of stress in retirement.

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

Keep reading only if: (a) you’re convinced the economy will be bad for a while; and (b) because of that belief, you’ve put a halt to investing and all other financial moves.

I understand why you feel cautious. I get wanting to be safe and watch from the sidelines.

But the choice to do nothing is problematic for at least two reasons.

One, nobody can say with certainty when the current gloom will give rise to the next boom. Sitting out can mean missing out.

Two, investing is only one facet of your total financial life. Even in gloomy times, there are other financial moves you can make while you are “waiting” for the economy to get better. 

Let me give you two.

• Stop procrastinating your PROTECTION.

What would happen if you: (1) died prematurely; (2) became disabled; or (3) needed long-term nursing home care? 

Whew, that’s a depressing list, isn’t it?

Which is precisely my point. Because these kinds of real-life scenarios are so unpleasant to think about, it’s easier to not think about them. We put them off.

Don’t do that. Just because the stock market isn’t soaring like you wish it would doesn’t mean you get exempted from a crisis potentially crashing into your life. 

While the market languishes, work with a professional and get a reasonable level of financial protection around yourself—and your family.

That’s a smart financial move for gloomy times. Here’s one more

• Start accelerating your THRIFT. 

“Thrift” is a word we don’t use much anymore. It implies financially carefulness. It’s being frugal with money—the opposite of a “spendthrift.”

It used to be a high compliment if someone called you “thrifty.” Today? Not so much. Frugal people get called “tight” or “cheap.” (Ask yourself: Would I rather be “cool” or “financially healthy”?)

Thrift starts with an attitude. You give thoughtful consideration to how you handle money. You ask questions like:

• What is really most important to me, given that my resources (income) are limited? 
• Since I can’t have it all, what’s more important—getting a new vehicle with all the bells and whistles…or moving a step closer to financial freedom and independence?

The road to bankruptcy court—to update the old saying—is paved with good intentions. And so, it’s critical to move down the thrift continuum from attitude to behavior. 

The goal is a thrifty mental attitude that results in consistent thrifty habits. 

That means things like: saving first, thinking before spending, putting away (and paying down) those credit cards, and seeking advice and counsel in the financial areas where you lack knowledge. 

Let’s suppose this economic mess we’re in lasts for a while—perhaps even years. (I’m not predicting; I’m simply making a point.) 

In that case, ask yourself two questions:

• Would I be better off sitting on my hands and grumbling about how bad things are? Or…
• Would my time, energy, attention (and money!) be better spent doing what I can with what I have? 

Then make these two smart moves:

• Improve your protection. 
• Increase your thrift. 

Is the question of retirement income one of the things that’s got you feeling gloomy? Email me at bmoore@argentadvisors.com. I’ll send you a free link to take the RISA^® Profile. This simple quiz takes mere minutes, and it can save you a LOT of worry down the road.

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

• The DiSC Profile
• The Myers-Briggs Type Indicator
• The Enneagram
• Strengthsfinder
• The Eysenck Personality Inventory 

It could be that you’re a “high D” or an INTJ or an Enneagram 3. Whatever the case, these assorted assessments (and all the others like them) are a fascinating reminder of just how differently we’re wired.

And it’s not just a difference in basic temperament. Consider all the ways we’re unique: DNA, disposition, family backgrounds, and life experiences. 

Our abilities, dreams, beliefs, and preferences are all over the map. Each of us is motivated by different things, driven by different concerns.

That’s why we can put 100 people in the same situation, and no two will act—or react or interact—in quite the same way.

You are one-of-a-kind. I am too. And that’s a good thing. 

Given all this, it should come as no surprise that we’re also different in how we view and handle money.

Have you noticed that some people have a scarcity mindset? (“There’s only so much. I better guard what I have with my life!”) Meanwhile, others have an abundance mindset. (“No worries! There’s plenty more where that came from!”)

Some are savers. Most are spenders. A few are always giving. A mom at our church once observed about her children, “If I gave them each a $100 bill, the oldest would rush to deposit hers in the bank. Our middle kid would immediately buy something for himself. Our youngest would call her three best friends and take them to lunch.”

The differences persist when it comes to investing.
Connie swings for the financial fences, figuring “the greater the risk, the greater the (potential) reward.” She’d be frustrated out of her mind in a conservative bond fun earning a steady 4-5%. She wants to be much more aggressive. And if a market correction has her portfolio drop 25%? Connie shrugs it off, telling herself, “That’s the price of admission. It’ll come back stronger than before.”

Connie’s brother Carl is at the opposite end of the spectrum. He’s got his retirement nest egg parked in multiple, less volatile “investment baskets.” Yet even with all this precaution, he nervously checks his portfolio daily.

Which brings us to the issue of your financial personality and “how you plan to pay for retirement.”

Here’s the thing: For many people, a monthly Social Security payment or a government pension isn’t enough to pay the bills—plus do all the other things they want to do in retirement. If that’s you, when the paychecks quick coming, how will you fund your lifestyle? 

Some retirees opt to slowly withdraw money from their IRA(s) or 401(k)s. This approach can work; however, when the markets are volatile, it can be nerve-wracking. What if some event causes your portfolio to drop in value by 20-25%? 

Other retirees choose to take a portion of their assets and purchase an annuity that will guarantee them a fixed amount of monthly income for life. This approach gives them peace of mind in times when the market is unpredictable.

Still others do a combination of these things.

Again, this is where personality differences matter so much. The best retirement plan for you is one that aligns with your financial temperament, retirement goals, and personal preferences. 

This begs the question: Do you have a clear understanding of your “financial personality”? 

If not, I’ve got a free gift for you. Email me at bmoore@argentadvisors.com and I’ll send you a link to take the RISA® (Retirement Income Style Awareness®) Profile. There’s no charge. This ingenious self-test will help you see what kind of retirement income plan best suits you. It only takes a few minutes, and it can save you a LOT of frustration. 

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

There’s a lot to like about the mindset that says, “Don’t sweat the small stuff.”

When we obsess over little matters, we often miss the big, important things in life.

On the other hand, don’t you want the doctor who does your heart surgery to be off the charts when it comes to little details? Personally, just before my anesthesia kicks in, I want to look up and see my surgeon’s furrowed brow so I can be sure he or she is “sweating the small stuff.” 

This same tension exists in your financial life. 

Wisdom urges us to focus on big issues like:

• Insurance…so that if something happens to you, you family is taken care of
• Investing…to make sure that you accumulate and grow enough wealth so that when you quit working, you can worry less and live more
• Impact…taking care to ensure you’ve got a plan in place to pass on all the assets you’ve accumulated to the people and causes nearest and dearest to your heart

Once these big financial matters are handled, we then have to sweat the small stuff. Because financial matters involve countless little details

Take Joe, for example. He was diagnosed with cancer in his late fifties. The good news is that Joe entered treatment early. He’s in remission today. 

The bad news is that even though Joe had medical insurance, he wasn’t aware of certain details in his coverage.

Like the fact that the policy he switched to—because it cost less than his old one—had a cap on the amount of chemotherapy it would pay for. 

You guessed it. Joe’s chemo bill skyrocketed. Today he has a six-figure medical indebtedness that threatens to take him under financially. 

Another pesky detail Joe discovered? A little rule about taxes on disability insurance payments. This rule stipulates that if you treat your disability insurance premium as a business expense and deduct those payments, you’ll have to pay taxes on any benefits paid to you. Only those who forgo a tax deduction can receive disability payments tax-free.

Now that Joe is receiving monthly disability benefits, do you think he wishes those payments were tax free? Sadly, he didn’t pay attention to that “small detail.”

And then there’s the guy I met 20+ years ago. He had heard that the XYZ mutual fund was a hot investment. (Yes, in the 90s, the words “mutual fund” and “hot” were often used in the same sentence.) He couldn’t send the company a check fast enough. 

For months he watched the fund rack up huge gains. Yet each time he got his statement, he noted that his account was barely growing.

When he finally came to see me, I looked at his statement and saw the problem: He hadn’t put his money into the XYZ Mutual Fund, but a money market fund owned by XYZ investment group. 

He had failed to pay attention to the details.

Here’s my advice: Focus on the big things…AND start sweating the small stuff.

Because the small stuff is often a big deal indeed.

One last note…I meet people all the time (especially those in their late 50s, early 60s), who have done the big thing of accumulating assets for retirement; however, they haven’t addressed the small but important detail of “How are we going to turn our ‘nest egg’ into regular monthly living expenses?”

If you’re one of those people, you’d benefit greatly from taking the RISA® (i.e., the Retirement Income Style Awareness®) Profile. Email me at bmoore@argentadvisors.com, and I’ll send you a free link where you can take this eye-opening self-test and find out what kind of retirement income plan best aligns with your personality.

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

It depends on a number of factors:

• How deep are the pockets of the other investors? (Or are they perhaps inviting you to the party because of your deep pockets?)
• Could you afford to risk losing your entire investment?
• How much sleep do you lose when you engage in such deals? 
• If the deal goes south, do you know how much you’d be on the hook for? 
• If all the other investors come up short on cash at the same time…will you be asked to guarantee only a portion of the loan or the whole thing?  

Remember, when farmer Brown comes into the barnyard with a hatchet in his hand, not all the chickens are at risk…just the fat ones.

Consider the case of Mark Brunell. He was a three-time Pro Bowl quarterback in the NFL. He actually won a Super Bowl ring with the New Orleans Saints in 2009 while playing backup to Drew Brees. 

Brunell threw 30 passes that season—for which he was paid a cool $1.6 million. (Nice work if you get it, right?)

But that pay is nothing compared to his earlier contracts. According to overthecap.com, Brunell earned more than $70 million playing in the NFL.

Yet in 2010, he filed for Chapter 11 bankruptcy protection. 

The Wall Street Journal reported that “personal guarantees of numerous business loans contributed to…Brunell’s Chapter 11 filing…In court papers, he listed $5.5 million in assets and debts of $24.7 million.” 

Bankruptcy laws play an important role in our society, encouraging capitalists to put their capital at risk. These laws don’t eliminate risk (ask anyone who’s been through the process), but they can soften the blow and, in some circumstances, provide room to breathe and, ultimately, recover.

Brunell joined a long list of famous individuals who have declared bankruptcy at some point in their lives: Mark Twain, Henry Ford, Henry John Heinz (the ketchup king), Milton Hershey (the chocolate titan), Walt Disney, and former President Donald Trump—to name just a few. 

I personally have known multiple individuals who have gone through the bankruptcy process. Each one would tell you it was one of the most difficult events of their lives.

In every case I’ve seen—where loan guarantees were more or less blindly-signed—the basis of the deal was a personal relationship. It was some version of “My buddies were all getting into this deal together, and I wanted to go along for the ride.”

Here are some questions to ask yourself before you guarantee a business loan:

• Do I really understand this deal?
• Why am I being asked to participate?
• Have I sought counsel from my attorney and financial advisor?
• Do I understand the worst-case scenario here and am I willing to take that big of a risk?
• Are the others in this deal really wise…or simply persuasive?

Americans are natural risk takers. That’s a good thing.

But taking a risk without understanding that risk is a dumb thing.

You need to ask a lot of questions.

Speaking of questions, I meet people all the time (especially those in their late 50s, early 60s), who have questions about retirement finances.

You’re smart to ask those questions. But make sure you’re asking ALL the right ones. Email me at bmoore@argentadvisors.com, and I’ll send you my free list of “30-Something Questions for People Who Are 60-Something.” 

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

Before we answer that question, let’s remember what an investment manager is and isn’t.

A good investment manager is not…

1. An Economic Alchemist. 

In ancient times, alchemists were individuals who claimed the ability to turn worthless metals in gold. 

Though nobody uses that title anymore, a lot of modern “experts” essentially portray themselves as economic alchemists. They act like they can turn any financial situation—no matter how dire—into financial gold. 

When you see your nest egg shrinking, it’s tempting to believe such mythology. But the fact is, when times are bad, they’re just…bad. And bad markets adversely affect everyone. 

The only way it could be otherwise is if your investment manager were…

2. A Profit Prophet. 

This is the idea that a fund manager can know what the markets are going to do. Fact is, many advisors voice strong opinions about what next year, next quarter, or next week holds. But remember: that’s all those ideas are—opinions. 

Is next year going to be good or bad? Yes! It is going to be good or bad. The problem is, we don’t know which one!

It’s sad how much money is lost annually by investors who buy into the notion that some money managers have a kind of “prophetic power.” Especially when you consider that their good financial hunches and really bad guesses have a way of averaging out over time. 

3. A Money Mentalist. 

Many people believe that a good money manager should have an intuitive “sixth sense” about when exactly to move money from “somewhere bad” in the market to “somewhere good.” 

Moving money around in a strategic fashion is certainly an aspect of good money management. But it doesn’t involve “psychic” powers.

Consider: If investment managers actually had such ability, they’d all be retired and living on their own private islands!

Okay then…if money managers can’t spin gold out of straw or peek into the financial future, what exactly are we hiring them to do? It’s my contention that a good money manager is really just…

A Financial Farmer. 

If I had said, “A good investment advisor’s job is to manage probabilities,” you’d be snoozing now.

But managing probabilities is exactly what farmers do. 

Good farmers do everything within their power to grow a healthy crop. They prepare the soil, secure the best seed, etc. To a degree, they even “help nature out” by using advanced agricultural and irrigation practices. But in the end, farmers have to play the hand Mother Nature deals them.

Let’s say a smart, experienced farmer/farm manager in Oklahoma has poor results because of a severe drought. Is that his fault? 

The same year, a less competent farm manager in Iowa enjoys unparalleled success because the conditions there are perfect for growing. Does he deserve all the credit for that record harvest?

Let’s say, based on these results, the owner of the Oklahoma farm fires his manager and hires the mediocre farm manager from Iowa who just had a stellar year. And suppose the law of averages works—as it always does. 

When weather conditions change, the inexperience of the recently-hired farm manager will be seen by all. And the farm’s owner will be left with a huge helping of regret.

My advice is twofold: 1. Know what your advisor is doing to put the odds in your favor; and 2. Judge him on his success at doing that. 

Expecting your investment manager to do anything else sets you up for poor results…and a poor decision about what to do next.

My guess is that you, like most people, have other big financial questions. Make sure you’re asking all the most important ones. Email me at bmoore@argentadvisors.com and I’ll send you my free list of “30-Something Questions for People Who are 60-Something.”

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

I’ve got some money I’d like to leave to my grandkids. I want it to grow, but I’m not comfortable putting it at risk in the market. Meanwhile, safer investments like CDs seem like they’re barely keeping up with inflation. Do you have any suggestions?

It’s a classic case of competing demands. We want the growth that comes with risk, AND we want the safety that comes with conservative investing. Just the other day I had a guy tell me (smirking), “I just want steady ten percent returns, with no risk of loss.” 

(Right. And I want delicious ice cream that makes me lose weight.)

Investing doesn’t work that way. We can’t have massive gains and guaranteed safety too. But there may be a middle ground that’s attractive.

If you’re a CD person, you’ve probably been bombarded with sales pitches for tax-deferred annuities. These are accounts set up by insurance companies. You can set aside money for retirement, and one day it can be turned into a stream of lifetime income. 

The problem with most annuities? Most have large surrender fees. If you change your mind, or suddenly need your cash…or if interest rates jump and you want to move your money back into a CD with a better yield, you can’t do it the first few years without paying substantial penalties. It is common for annuity surrender penalties to last seven or more years. Some may be shorter, many are longer.

While most folks have heard of tax-deferred annuities, not many know about the lowly modified endowment contract (MEC). A MEC is also an insurance company instrument. It’s essentially a whole life policy stuffed with cash.

Because insurance companies don’t have the short-term liquidity requirements of a bank, they can often make longer-term investments, which in turn pay a slightly higher yield. This can translate into a higher return than one would get with a CD. (Obviously, the details on a MEC can vary, or change quickly, so you need to talk with an expert and get all the facts before doing anything.)

Like an annuity, MEC funds are tax deferred while left in the contract. And there is a federal government tax penalty for early withdrawal if you take money out before age 59 and a half. For that reason, a MEC is typically most appropriate for folks over that age.

Unlike an annuity, with a MEC the ability to get to all of your money comes much quicker, as in the second year. 

There is also a death benefit attached, so that proceeds pass income tax free to your heirs. Because of the death benefit, you have to go through a physical underwriting process to qualify for a MEC. My experience, however, is that most reasonably healthy older adults qualify. Again, talk to a trusted, licensed agent to learn all details.

Here’s an example of how a MEC can work. Suppose a reasonably healthy 65-year-old man puts $100,000 into a MEC. If the man died the day after the contract was in force, his beneficiaries would receive $175,000. 

Or, if he changed his mind, he could cancel the contract and get back his $100,000 plus some interest by the end of the second year. If he let the money grow and reinvested the dividends, his $100,000 would grow to about $150,000 ten years later, assuming current dividend rates. That’s about a 4% annual rate of return, with no taxation and no market risk. And the death benefit, according to current dividend yields, would have grown to $220,000 in the tenth year. Dividends, of course, are not guaranteed.

The same $100,000 placed in a 5-year CD might get close to 0%…or as high as 4.5%, depending on which bank you use. That is a huge spread, but that’s the rising interest rate environment we’re in right now. Penalties for early withdrawal vary from bank to bank.

MECs are more trouble to set up than CDs. They aren’t right for everyone. But for a long-term saver, looking to maximize returns for you and your loved ones, a MEC is certainly worth investigating.

If you’re like most people, when it comes to things like MECs, you’re not even sure what questions to ask! No worries. I’ve already done that for you. Email me at bmoore@argentadvisors.com and I’ll send you my free list of “30-Something Retirement Questions for People Who are 60-Something.”

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

“Despite what some are saying, I don’t think our economic hard times are over. In fact, some are saying online that the ‘experts’ are hiding how big our problems really are. Some think the whole world is on the brink of bankruptcy. If that’s true, how safe is any investment?”

In a New York Times column in 2009, Dennis Dutton reminded readers of the big Y2K panic…remember that scare just over 23 years ago?

Supposedly, computers—due to a programming oversight—wouldn’t be able read dates beyond 1999. Therefore, when the clock struck 12 a.m. on January 1, 2000, the world was going to plunge into chaos. 

People were bracing for “aircraft to fall from the skies,” wrote Dutton. They feared that “electricity grids, water systems and telephone networks would be knocked out… nuclear power plants would be subject to meltdown. Savings and pension accounts would be wiped out in a general bank failure.”

Many expected “vast shortages of food and medicine, which would, in turn, produce riots, lawlessness and social collapse. Even worse, ICBMs might rise from their silos unbidden, spreading death across the globe.”

In his column, Dutton concluded that the Y2K fiasco was less about technology and more about humanity’s “morbid fascination with end-of-the-world scenarios.” According to Dutton, for many people, it’s always the end of the world as we know it.

Back in the 1970s, my father read books like How to Profit from the Coming Economic Disaster. He was concerned enough that he bought enough freeze-dried food to feed us for six months!

Fortunately, we never had to eat dehydrated broccoli. Instead, we got fodder for teasing Dad for years to come.

All this prompts a question: Why do we love doomsday predictions so much? Here are three possible explanations:

• They offer us entertainment. They’re like reality TV. Reality TV is just cheap entertainment (in more ways than one). It’s alluring precisely because it is staged to look so…real. We can picture ourselves in that same scenario (living for a month, trapped in a house with 10 super models…you know… reality). 

Imagining a worldwide economic collapse is somehow entertaining to us, in the same way that we pay to watch movies that scare us out of our seats.

• They offer us distraction. Life can feel boring and mundane. Often, the things we need to do to be successful are not exactly exciting. Disaster scenarios can give us the feeling of being a part of something urgent and exciting…even if it would mean the end of life on the planet.

• They offer us simplification. Real life is complex. And the solutions to big problems are usually difficult to figure out and enact. Plus, it may take years to see a positive outcome. Disaster scenarios, on the other hand, typically offer a clear villain, an obvious problem, an unmistakable hero, and a victim that’s easy to spot (often you and me!). 

To be sure, evil does exist (see: Hitler) and disasters do occur (see: Hurricane Katrina). 

But like the economist who predicted 20 out of the last three recessions, an excessive focus on disaster can distract us from dealing with actual realities.

Get obsessed over a hypothetical “end of the world” and you’ll be ill-prepared for the actual world that keeps going.

To help you alleviate financial fears, I’ve written a short book called How to Put Financial Worries in Your Rear View Mirror. It’s free if you’d like a PDF copy. Email me at bmoore@argentadvisors.com, and I’ll send it to you right away.

Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.

We worry about how much we overspent…and resolve to “do better” in the coming year. 

I’m convinced the week after Christmas is the perfect time to review the year that’s been…and look ahead to the year that’s looming. It’s an opportunity to do some smart financial planning.

What are the benefits of scheduling an appointment with a respected financial planner and creating a wise financial plan that includes smart strategies for saving, eliminating debt, and investing?  

A big one is that once that plan is in effect, you don’t have to sit around fretting about your money all the time. You can go “off duty” and leave it to your advisor to keep you on track.

But a lot of people choose to tackle this on their own. They stay up late googling and reading. Typically, these DIY-ers focus on questions like:

• What’s the BEST performing mutual fund (last year, of course)?
• What company has the LOWEST expenses?
• What stock will pay me the HIGHEST dividend?
• What’s the next BIG investment trend?

In short, these DIY-ers want a “perfect” plan. And oftentimes, they don’t end up doing anything until they feel like they’ve found it.

But consider…would having a “good” mutual fund instead of the “best” mutual fund really make that big a difference in your life? 

Before you answer that, let me throw another question your way: What if something happens to thwart your perfect plan?

I see that furrowed brow. You weren’t even considering the thought that something might go wrong, were you? In your mind, you had your perfect mutual fund growing to the sky in 2023. 

In the ideal world of our daydreams, everything always goes as planned. Nothing unexpected or bad ever happens. 

But we don’t live in an ideal world, do we? If we learned nothing else in 2022, we learned that truth!

The “imperfect” happens routinely. Taxes, inflation, and interest rates rise. Laws change in ways we don’t like. Markets fluctuate wildly. Those are actualities. 

Then there are all of life’s very real possibilities: lawsuits, layoffs, accidents, illnesses, death.

I always think it’s tragic when someone preoccupied with the illusion of perfection, gets blindsided by one of those real-life risks that happen to people every day.

That’s why a smart financial strategy is first about preparation and protection, and only afterwards about the pursuit of perfection. Putting together a collection of mutual funds and calling it a portfolio is not a financial plan. Left by itself, it is a gamble that the lottery of life will be kind to you.

Try this thought experiment. You get to choose one of two paths. Path 1 offers you the possibility of one day having $2,000,000. But that same path also leaves you completely unprepared and unprotected against life’s unexpected events. And, if one of those things happened—poof—there goes your $2 million.

Path 2 will one day leave you with $1.8 million. But all along the way, you are both prepared for adverse changes and protected against adverse risks. In other words, you are likely to get the $1,800,000 no matter what happens. And the $1.8 million is enough.

Which would you choose—perfection with high risk, or enough with more safety?

I suppose some folks might choose the first path. But the vast majority, when faced with this choice, will see the second path as the wiser option. 

Perfection is a mirage. Preparation is the smart choice. 

Remember that as you welcome 2023.

To help you think through such issues in greater detail, I’ve created a comprehensive checklist of pre-retirement questions for people who are 60-something. It’s free if you’d like a copy. Email me at bmoore@argentadvisors.com, and I’ll send it to you right away.

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