I'm in no way implying that it's terrible to dissect market headlines or to listen to the media outlets that cover them. In fact, that's what my WSB Radio show, "Money Matters," does every Sunday. However, I believe we should strive to keep this information in context while we remain focused on the broad horizon that is our financial future.
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Our long-term financial goals are ever evolving. We may want to buy a house, we may have children, our children may go off to college, we want to take vacations along the way and, one day, we will probably want to retire. There’s no doubt that we’ll want to retire happily.
Creating a robust financial framework to leave full-time work is a significant factor in our happiness. It takes planning, goal setting, and it takes a sense of optimism to make our way through all these big-money decisions and trust in the process. Fortunately, I think it’s easy to be optimistic — after all, we’re lucky enough to live in America.
The guiding mission for both my radio show and the work my colleagues and I do at Capital Investment Advisors is to help families find happiness in retirement. A big part of how we get there is by using an investment philosophy called "income investing." Our goal is to use income investing to help families generate "paychecks" from their investment and retirement savings. I've written about the income investing process extensively in my book, "You Can Retire Sooner Than You Think," which is now in its seventh year. In the book, I also dive deep to educate readers on what factors make for a truly happy retirement.
Even armed with optimism and an understanding of income investing and what makes for happiness in retirement, nobody said the process is easy. Being an investor is hard work — it takes dedication, prudence and emotional steadiness in periods of upset.
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Since WWII, there have been 15 bear markets (corrective periods of 20% or higher) that have reared their ugly heads. Some were a flash in the pan, while others stuck around and tested the mettle of even the most grizzled investment pro.
I think what throws so many people off course for wealth creation is the sheer terror of declines like these. There are entire books, classes and studies on the impact of loss and the human instinct to run from fear. Science says the pain of financial loss is three to four times as powerful as the pleasure of gain. No wonder investing can be so difficult.
But these bear markets are the price we pay to enjoy the 6%, 8% or even 12% annual rates of return (when you include dividends) that have come with being invested throughout market history.
So, here we are now. Markets have very much recovered from the carnage of the last bear market. For those who stayed invested throughout this entire market cycle, you have been rewarded. Looking beyond negative headlines, hiccups and even disasters was a necessary piece of the equation. And understanding the immutable force of U.S. capitalism and prosperity helped, too.
What’s on the horizon for the next handful of decades? No one can say with certainty how the market will fare. But as long as we believe in American ingenuity, entrepreneurship, innovation and drive, I believe that we’ll continue to experience growth. If this economic freight train we’re on continues, so will the ability for companies to make money and increase earnings. These two factors are what we need to see for the market to march higher over time.
I invite you to share in a fundamental belief: that it is essential for you, as an investor, to believe in the progress of business in America and around the world. No matter the headlines. No matter the tumbles. No matter the news from Washington, D.C. Happy New Year, Atlanta.
Wes Moss has been the host of “Money Matters” on News 95.5 and AM 750 WSB in Atlanta for more than seven years now, and he does a live show from 9-11 a.m. Sundays. He is the chief investment strategist for Atlanta-based Capital Investment Advisors. For more information, go to wesmoss.com.
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