It’s Sunday, which means...it’s recap time here on the Retirement Quick Tips Podcast

This week the theme was: How To Use Stock Market Volatility In 2022 To Your Advantage

In case you missed any episodes, here’s what we covered this week:

• How Volatility Differs From Risk
• Rule # 1: Don’t Panic. Rule #2: Don’t Forget Rule #1 
• How To Buy Low & Sell High In The Real World
• The Discerning Stock Market Bargain Hunter
• Doing This One Thing Could Save You A Million Dollars

The most important takeaway from this week is: 

Tomorrow, come on back, because we’re starting a brand new theme: Is It Too Late To Buy Real Estate? My husband and I were having a discussion the other day about real estate. Back in 2017, when I was making plans to leave my old firm, I briefly considered buying property for our office space, but it would have been too many changes all at once, so we leased office space instead. Hindsight is always 2020, and real estate - especially where I live - has gone crazy since that time. Which begs the question…is it too late to buy an investment property or that beach house you’ve always dreamed of? 

We’ll explore that question next week. 

Thank you so much for listening this week! If this podcast is valuable for you, please share the show with a friend, a neighbor, your brother, or co-worker who is getting close to retirement. Just go to your favorite podcasting app, hit the share icon, then text or email the show link to someone you know who is eyeing retirement. 

Thanks for sharing the love and spreading the word. I hope you have a blessed Sunday. My name is Ashley Micciche, this is the Retirement Quick Tips Podcast.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: How To Use Stock Market Volatility In 2022 To Your Advantage

Today, I’m talking about a promise you’ll need to make to yourself if you want to consistently profit from uncertain and volatile times in the stock market. It’s a very simple promise: 

Commit to never selling and going to cash or bonds when the stock market is broadly lower. It’s important to mention that this applies to your entire stock portfolio, and not an individual stock. If you own an individual stock that’s gone sour, then it’s usually better to get out and sell once the future prospects start to diminish, rather than waiting for a turnaround.

But where your entire portfolio or your 401k is concerned, especially when you’re well-diversified, selling in volatile time periods when the stock market has already dropped 10-20% or more will only hurt you in the long-run, so it’s incredibly important to stay disciplined and commit to never selling or going to cash/bonds when the stock market is in a downturn. 

Abandoning this commitment has serious long-term consequences for your portfolio returns.

A Vanguard Advisor Alpha study quantified this and your behavior, which mostly boils down to staying disciplined with your strategy in good times and bad, was responsible for about 1.5% of your annual returns over the long-run.

Sounds like not much, but that’s a huge difference. 2 investors with all else equal who both started with $1 million, will have vastly different results over a 20 year time period. Investor A who stayed disciplined, calm, cool and collected at a 7% average return turned his or her million into about $3.87 million over that 20 year time period. Investor B who’s returns were reduced by 1.5% because of emotional investment decisions, had $2.92 million over that same time period - a difference of over $950,000! 

So make a promise to yourself that you’ll never abandon your stock portfolio in volatile times and I’m confident you’ll see that reflected in your long-term portfolio values. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: How To Use Stock Market Volatility In 2022 To Your Advantage.

Yesterday I talked about how to buy low and sell high in the real world and start using stock market volatility to your advantage, rather than being afraid of it.

Today, let’s talk more about what to buy when you pull the trigger and start adding to stocks.

When the stock market is heading lower, it’s like the tide is going out and a bunch of boats near the shore become exposed. Stocks are like boats in this regard, because the low tide exposes, barnacles, cracks or even gaping holes in the boat that were concealed underwater when the tide was in and times were good.

You should never own junk in your portfolio, but it’s especially important that you focus on quality - well taken care of companies with a clean underbelly and very few, if any barnacles or signs of wear and tear.

Volatile times cause many great stocks to drop in value too, and when you focus on quality, volatile times offer an opportunity to buy great companies at bargains. What makes a quality stock is no secret, so whether you buy stocks or ETFs or mutual funds when you go bargain hunting, you’ll be able to profit from these down periods.

Focus on stocks that have future earnings power, low debt, strong management teams, dominant market positions, and strong cash flow. These are the typical hallmarks of a great bargain stock, and sticking with these quality characteristics will prevent you from loading up your portfolio with garbage and not real bargains. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: How To Use Stock Market Volatility In 2022 To Your Advantage

 

Today, I’m talking about the easiest way and the most profitable way for most investors to use stock market volatility to their advantage - buying low and selling high.

How do you do this in the real world? It’s actually much easier than you might think, but it does take discipline. Let me explain…

Let’s say your ideal portfolio allocation to stocks is 65%, but let’s say the stock market continues to drop and your portfolio is down 15-20%. There’s a good chance that your allocation is now hovering closer to 60% because the stock side of the equation has absorbed all of those losses. 

So you would need to figure out how much to add to stocks to get back to your 65% target, then determine what to sell from your bonds to make that happen, and just do it. 

Having a target stock and bond mix and then taking action when your portfolio deviates more than about 5% from that allocation gives you the discipline to buy low and sell high. Buying low and selling high evades most investors because they let their emotions or biases get in the way, and they don’t have a target allocation to stocks, which means they don’t take action to rebalance when they should. 

Volatile markets give you opportunities to re-balance and do what most investors can never seem to do - buy low and sell high. A Vanguard Advisor Alpha study found that rebalancing enhanced returns by as much as .26% annually. It sounds like a small amount, but over 20 year retirement on a $1 million portfolio earning 6%, that’s a difference of $161,000. 

Don’t know your target allocation? If you send me an email to [email protected], I’ll send you my age-based asset allocation cheat sheet that will help you figure out what % in stocks is ideal for your age, and help you establish a baseline for using this strategy to your advantage. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: How To Use Stock Market Volatility In 2022 To Your Advantage

Today, I’m talking about the #1 rule to using volatility to your advantage..well, 2 rules actually: Rule # 1: Don’t Panic. Rule #2: Don’t Forget Rule #1. 

You can’t think straight or act appropriately when you’re freaked out and panicking over the stock market. Keeping your cool is the most important basic first step. You must be able to remain calm and think clearly during scary volatile time periods in the stock market if you have any hope of profiting from this current environment.That’s why I’m starting here this week, and not just diving right in to taking advantage of volatility, which I’ll transition to tomorrow.

But for today, how do we stay calm and collected when the world around us is going bonkers. 40-year high inflation, interest rate hikes on the horizon, a war in the Ukraine…now that Covid is fading, the next several shoes have dropped and the stock market all of a sudden doesn’t like any of it. 

Much of remaining calm comes down to some combination of temperament and experience. Most of you listening have been through many stock market periods like we’re in now, and so it becomes easier to deal with as time goes on. When you get closer to retirement, you have more at stake and so that counterbalances the benefits of your experience, and if you’re always worried and anxious about most things, including your investments, that’s also going to make it more challenging to stay calm, and you’ll need to work harder to not let your emotions control your investment decisions. 

What about the things you can control? For me, this starts with limiting the quantity of the news I consume. Trust me…the headlines today won’t matter much tomorrow. And the more news we consume, the more uncertain and scary the world feels and it’s easy to get stressed, panicked, hopeless, and that’s when our fight or flight response kicks in and you start making some really bad decisions with your investments.

It’s not just the amount of news you consume, it’s the quality as well. It’s important to stay away from the sources of news that stress you out the most. 

If you like Tucker Carlson, but your blood pressure is through the roof after watching him every night, then turn it off. [Reading vs. watching]. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: How To Use Stock Market Volatility In 2022 To Your Advantage

Today, I’m talking about the difference between volatility and risk. It’s critical that you understand the difference between the 2 in order for you to be a successful investor in uncertain times like we’re facing today, and the big stock market swings that accompany it.

Volatility is the degree by which the price or value of an investment fluctuates. In volatile periods like we’re in right now, prices swing sharply up and down while in less volatile periods, price swings are muted. 2021 was a very calm time in the stock market. Most days the stock market just kept marching higher, with hardly a hiccup along the way. 

Risk, on the other hand, is the chance of investments declining in value or the likelihood for permanent loss.

For example, most broadly invested mutual funds or an index funds are actually fairly low risk investments, even if they’re 100% in the stock market. Why? Because the risk of permanent loss is low. 

Most broadly invested mutual funds or index funds have hundreds of stocks across many different industries, with most having no more than a 2-3% in even the largest holdings in the fund. With your money spread out across so many different stocks, the likelihood for permanent loss is low, given enough time.

Is it possible that you could lose money on an investment like this? Absolutely, since you can sell it at any time and lock in those losses. That’s risk. But the chance that that investment goes to zero and you lose all of your investment is extremely low. 

When you own a single stock on the other hand, that’s risk. There’s a good chance that the stock could go to zero if the company goes bankrupt, and it can happen overnight. 

When you can separate risk from volatility and understand that risk is permanent loss, volatility is temporary loss, you’ll better understand how to take advantage of volatile times and not make the mistake of turning temporary volatility into permanent loss, by selling when your portfolio declines in value. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

Welcome to a new week here on the Retirement Quick Tips podcast. I’m your host Ashley Micciche, co-owner of True North Retirement Advisors, an independent financial advisory practice managing $340 million in client assets. I’m a Chartered Retirement Planning Counselor, and I started this podcast because I love helping people just like you gain clarity and make a plan for the retirement you envision. 

The theme this week on the podcast is: How To Use Stock Market Volatility In 2022 To Your Advantage

Nasqaq on 2/24 - day after Russia invaded Ukraine - 3+% drop to a 3+% gain in the same day. That kind of whiplash in one day has only happened a handful of times in history. Followed the next day on Friday with a1.64% move to the upside. Volatility is scary and uncertainty is scary. Most people are scared of volatility in the stock market, but you shouldn’t be afraid of volatility, because you can use it to your advantage to boost your long-term returns, and this week, I’ll go into the details of how you can use volatility to your advantage in 2022. 

I hope what I have to share with you this week will help you make smart and thoughtful decisions with your retirement. And while I am careful to not lead you astray, personal finance is not an exact science. There is no one-size-fits-all solution for everyone, so I encourage you to disregard anything I say that may not be helpful for you, and to consult your own financial, tax, and legal advisors regarding your own individual situation. 

That’s it for today. Thanks for listening! My name is Ashley Micciche...and this is the Retirement Quick Tips podcast.

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>>> Visit the podcast page: https://truenorthra.com/podcast/ 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

It’s Sunday, which means...it’s recap time here on the Retirement Quick Tips Podcast

This week the theme was: Save More or Pay Off Debt Before Retirement?

In case you missed any episodes, here’s what we covered this week:

• Spoiler Alert! Pay Off Debt
• 3 Reasons To Pay Off Debt Before Retirement 
• Paying Off Debt Gradually vs. Lump Sum
• Finding Out How Long It Will Take To Pay Off Debt
• Debt You Should Never Have In Retirement

The most important takeaways from this week are two: First, eliminating debt in retirement is one of the best ways you can minimize your expenses and maximize your freedom in retirement, and 2nd: you’re likely better off focusing on paying off your debts in the last few working years that you would be if you devoted that money to saving more in your 401k.

Tomorrow, come on back, because we’re starting a brand new theme: Let’s talk volatility! To say the stock market has been volatile so far in 2022 is an understatement. So next week I’ll talk about volatility, why the way most people think about volatility is wrong, and how you can use volatility to your advantage. 

Thank you so much for listening this week! If this podcast is valuable for you, please share the show with a friend, a neighbor, your brother, or co-worker who is getting close to retirement. Just go to your favorite podcasting app, hit the share icon, then text or email the show link to someone you know who is eyeing retirement. 

Thanks for sharing the love and spreading the word. I hope you have a blessed Sunday. My name is Ashley Micciche, this is the Retirement Quick Tips Podcast.

----------

>>> Subscribe on Apple Podcasts: https://apple.co/2DI2LSP

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>>> Visit the podcast page: https://truenorthra.com/podcast/ 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: Save More or Pay Off Debt Before Retirement?

So far this week, I’ve been talking about paying off your mortgage debt, but you may be asking yourself, what about other debts? Credit cards, medical bills, car loans, etc. 

So today, I’m talking about these other types of debt that you definitely don’t want to keep carrying into retirement. 

The biggest no-no for debt in retirement is any credit card or other high interest rate debt. Living on a fixed income and portfolio withdrawals that are generating returns in the mid-high single digits and using that money to pay off high interest rate credit cards simply doesn’t make financial sense and it’s a recipe for being chronically broke in retirement. 

Many people get into credit card debt because they don’t have emergency savings and they spend too much of their income, sometimes exceeding their income with their spending. 

If this is you, you’ll need to figure out a way to build up more cash savings in your coffers while simultaneously cutting your spending. 

I find that a good way to tackle spending habits prior to retirement is to live a mock retirement year. Figure out what your income sources will be in retirement and just live off of that income. The last thing you want to do is have to cut way back on your spending or go back to work after retirement, because you weren’t able to adjust to your retirement income. Or worse, you don’t want to continue racking up credit card debt in retirement or worse, spend down your assets quickly in retirement, because your spending is exceeding what your income and assets can support.  

Most retirees spend about 60-80% of their income that they were making pre-retirement, mostly because their assets and income sources aren’t quite as high as their income while they were working. And I find that there is an adjustment period in retirement for the first year or 2 while you figure out what your spending really looks like from month to month, so a mock retirement can really help with preparing you for that adjustment. 

To address the other types of debt like car loans, etc. I would still prefer my clients and all of you listening to have no debt in retirement because of the financial flexibility that comes with no debt, but there is a range here, so if you don’t have any credit card debt, no mortgage, but you still have a car loan, in most cases, that’s probably ok. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

The theme this week on the Retirement Quick Tips Podcast is: Save More or Pay Off Debt Before Retirement?

Today, I’m talking about finding out how long it will take for you to pay off your mortgage - or any debt for that matter. The secret is using an amortization calculator.

Here’s how the amortization calculator works with your mortgage: Let’s say you have 15 years left on your mortgage and you’re 9 years from retirement. How much would you need to add to your monthly payment to pay off your mortgage the same month that you plan to retire?

When you use an amortization calculator which you can easily find online for free, you can enter extra payment amounts to figure out how much you would need to add to your mortgage every month to pay it off early by a certain date. 

When you actually run the numbers with an amortization, you might be surprised to learn that knocking those 6 years off your mortgage is totally doable, and not as burdensome as you might have expected.

For example, if you have 15 years left on your mortgage with a mortgage rate of 3.25% & a monthly payment of about $1740/mo, if you add another $1000 to your monthly payment, it shaves 6 years off, timing your mortgage payoff with when you retire. I ran this calculation in under a minute using my favorite amortization online calculator. 

Now you might balk at this because adding $1,000 to your monthly payment is a lot, but you’re most likely in your peak earning years so you’re making more money, and I’m also assuming that you’re saving less in your retirement accounts. 

Remember, you do need to run the numbers for yourself to make sure that it makes sense, but I can tell you for most people who are just a handful of years away from retirement, most of the time it pays to eliminate that mortgage payment, even if it means saving less in your 401k. 

I’ll link to my favorite amortization calculator in the show notes, so you can run the numbers for yourself. You can find the link and all the show notes for this episode - episode 1237 - in Apple Podcasts, Spotify, or most places where you’re listening to this podcast. 

Mortgage Amortization Calculator (from Bankrate) >>> https://www.bankrate.com/calculators/home-equity/additional-mortgage-payment-calculator.aspx

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance