Year-End 2022 may be leaving us with more questions than answers. In addition to a prior posted list of questions, here are more:
- Will interest rates continue to increase?
- Will the US officially enter a recession? If so, how bad, and how long will it be?
- Will there be more bankruptcies related to cryptocurrencies and trading?
- What will become of the unbalanced employment situation?
The list can go on and on. For as long as most experienced investors reading this post can recall, there have always been questions that economists (similar to the weatherman/woman) attempt to answer. Readers and investors who are newer or younger can learn over time that questions regarding the economy and government/fiscal policy are what make markets operate. Everyone is entitled to her or his opinion, especially in investing:
- what new technologies will succeed or fail?
- how will higher or lower interest rates affect decision-making?
- which new company will be the next Microsoft, Disney, Starbucks, or Tesla?
- how much makes sense – or if – to contribute to a 401k, IRA, or emergency fund?
Coke or Pepsi? McDonalds or Burger King? Whole Foods or Harris Teeter?
Free markets should give the opportunity for differing opinions and answers to come to life – giving a buyer a reason to buy and a seller a reason to sell. Who is perfectly correct? Neither. Luck and patience, among other factors, play into the “answers” and choices in markets and investing.
Timing of making various investments may be the hottest question of all. In what may seem disappointing, the answer to the “investment timing question” is that investment timing is almost entirely unpredictable – but manageable. Manageable means that by removing specific investment timing guesswork, long-term gains and goals are made more achievable.
The biggest factors then become managing spending, timing of spending, followed by the ability to save and invest. Managing taxes becomes paramount, followed by protecting and preserving wealth.
But these topics may sound boring.
We find ourselves much more interested in guessing about market timing, political parties, tax & fiscal policy and the like. Instead, the challenge of long-term financial survival is to focus on and explore answers to:
- Which life or goal “buckets” to create
- How to craft a portfolio to minimize taxes
- How to preserve wealth and savings
- Who to consult and trust for advice
- What and Who is most important in our lives
- How to stay healthy enough to enjoy savings and investments.
It is tempting to seek answers to more popular or trendy questions but knowing and exploring the basics can lead to long-term financial success and peace of mind. Hint: the “basics” may be more exciting than you think! For more, stay tuned in 2023 and beyond. Or please feel free to call me to chat or simply to say Happy New Year!
Thank you for reading, Farewell to 2022 and TGIF!