Behavioral Finance – TGIF 2 Minutes with Kerrie Debbs, CFP

Rocky (But Good) Start to the Year… PS. “Alts”

This may be the last weekend we can say, “Happy New Year!” to friends. And a fairly happy new year it has been for the markets… with a few bumps here and there. The “bump” was a mini-cavernous plunge for shares of Nvidia shares, down 15% in one day without a rebound. Both the S&P 500 and Nasdaq 100 (tech focused index) promptly rebounded.

However, there may have been a few investors, especially those newer to the markets or those less patient among us, who need a “gut check” when markets get rocky. Here are a handful of questions investors can ask themselves, in order to stay put with current investments in down and seriously down markets – providing a plan is already in place:

Continue reading “Rocky (But Good) Start to the Year… PS. “Alts””

Mind Blowing & Challenging

Picking a topic for this week’s edition of TGIF 2 Minutes was both mind-blowing and challenging. Choices ranged from:

the sentencing of Sam Bankman-Fried to 25 years in prison for fraud tied to his crypto exchange,
the tragedy and enormity of the awful Francis Scott Key Bridge destruction in Baltimore,
the exposing of betting scandals in college and professional sports, namely the recent scandal around LA Dodgers superstar, Shohei Ohtani and his interpreter (an overall financial greed concept gone beyond awry),
a March 20th update from the US Congressional Budget Office on the long-term effects of the Federal Deficits (all young, yes young, people under the age of 35-40, please pay attention to this issue).

Wow, lots of JOY going into Easter weekend.

Continue reading “Mind Blowing & Challenging”

The Champagne Spray

On the lighter side of matters…. and please CLICK THE TINY ARROW BELOW.

Champagne & William Shatner from Kerrie Debbs on Vimeo.

Back in 2021, William Shatner – at 90, who knew?! – became the oldest person to achieve space flight. Completion of a 10-minute journey on the reusable New Shephard rocket, including four minutes of weightlessness, was cause for a major celebration immediately afterwards. But notable was that upon disembarking from the space capsule Shatner politely turned down taking part in the champagne spray shower amongst the crew, Blue Origin promotional people and members of the press.

Continue reading “The Champagne Spray”

The Million Dollar House Down the Street

What happens when the house down the street suddenly sells for over $1 million dollars?! (And all the other very nice homes on the street were purchased for $550,000 or less within the past 10 years or so, maybe $700k for a couple of more recent sales?)

A couple of possible answers with explanation:

Real estate in desirable areas is still white hot. And while areas in the US northeast, California, and Florida (among other high-priced areas for homes) commonly see homes priced in the $3 million to $5 million+ range, homes nationally sell for an average of much less. Depending on which source or what inputs (new or existing, list price, sales price, or market price, etc.) the average home sale price in the US is between $391,000 and $507,000*. Therefore, in most neighborhoods when a home suddenly sells for $1.1 million (or $2.1 million) dollars it is consequential for the local market, especially the neighbors!

Continue reading “The Million Dollar House Down the Street”

Looking Back On Behavior & Investing

From the “Best of TGIF 2 Minutes” 2017 Archives….

Under the heading of ICYMI and how meaningful this man’s work is to every human being:

The Nobel Prize in Economics may be a real yawn for most people. But this year [2017], the winner is a rock star. He made a cameo appearance in a hit movie with Selena Gomez and has written multiple best-sellers. His name is Richard Thaler and he’s an economist by trade but over the years chose to combine his studies of economics with psychology – and is widely known as “The Father of Behavioral Economics.” Are you still yawning? Read on.

Richard Thaler: The Father of Behavioral Economics
Source: Personal Financial News

Continue reading “Looking Back On Behavior & Investing”

Is NOW a Good Time to Invest?

The original title of this edition of TGIF 2 Minutes was “Remember Brexit?” The reason that seemed appropriate is because recently and often during client reviews, conversations with potential new clients and from friends I am hearing the question, “Is NOW a good time to invest?” The slew of events that occurred in late 2020 and so far in 2021 have led both new and experienced investors to question the timing of investing new monies today.

Looking at the chart below*, there are events since 1970 and as recent as Brexit in 2016 that posed immense uncertainty and likely the same question. In fact, the chart illustrates the TEN YEARS from 2000-2010 dubbed “the lost decade”.

**Please ask for a copy of the PDF to view or zoom in.*

Continue reading “Is NOW a Good Time to Invest?”

Reacting Can Hurt Performance

As they say, “a picture is worth 1,000 words.”* Please do whatever you need to do with your phone or laptop to make sure the graphic below is visible. And make sure to ZOOM IN or turn the phone sideways (or ask me to send you the PowerPoint or PDF version of this slide).

With that said, the title of the slide is: Reacting Can Hurt Performance. And here is a question,

Who is NOT scared these days or after this week?

Savings and investing decisions need to have been made before today. Reacting can significantly hurt performance.

Continue reading “Reacting Can Hurt Performance”

Try This If Markets Get Rocky

A timeless set of advice originally appearing in August 2014, again in January and October 2016, again in February and October 2018, August 2019 and as recently as May 2021… it can be wise to do a “gut check” on how extensively a rocky or down stock market could affect your emotions – and more important, your actions. There may be reason to establish a pattern of performing this exercise one to two times per year.

Adapted and shortened, “Gut Check in Rocky Markets,” can be applied to the times we are experiencing today in late August 2021, amidst US and global uncertainties of the geopolitical and pandemic variety. The central message stands:

***It can be wise to do a “gut check” on how extensively a rocky or down stock market could affect your emotions – and more important, your actions.***

Continue reading “Try This If Markets Get Rocky”

Getting a New Car

There are few things as exciting as getting a new car: the “new car smell,” the test drive, the sound system, sunroof, heated seats… the feeling of “everything is new.” And these days, cars are advanced computers on wheels (and that means even the non-self-driving kind).

With that said, yours truly recently bought a new car – the first new car in 15 years! The old 2005 (Certified Pre-Owned) B-mer went 180k miles and could have gone another 100k but with a bit of maintenance here and there. Time for a new vehicle. But what new car to buy? New or used? Sedan or SUV? Buy or lease? And the cost: go expensive or reasonable in cost?

Any major purchase – housing, appliances, transportation, kids’ education, and the like – needs to be evaluated both from a **financial** and **emotional** perspective.

Continue reading “Getting a New Car”

ESG Investing: Environmental & Social Good

BIG TOPIC! ESG is in the news more and more and has made its way into the world of investing. You may already have seen ESG offered in your 401k or 403b plan!

What is ESG? It stands for: Environmental, Social and Governance. Also called “sustainable investing,” the ESG category uses its three principal criteria to guide investment decisions. Funds in the category currently hold approximately $12 trillion of assets in the U.S. representing nearly 26% of the professionally managed assets as of 2017.* The obvious audience for ESG is Millennials (those born between 1981 and 1996, and aged 23 to 38 in 2019). The “millennial generation” has been known to prefer investing if “their investments [are] doing social good”* according to a survey.