In two words: weakness + volatility.

Consider this…

Since WWII, the market has had some of it’s weakest years on record during a mid-term election year.

In fact, if we look at all mid-term election years since 1946 the S&P 500’s performance during those years has averaged a gain of 5.03% which is approximately half of the return for all non-mid-term years which have seen an average annual return of 10.26%.

Not only have mid-term election years seen weaker returns than all other years, but these years have also been more volatile with larger drawdowns.

The median maximum drawdown from a peak during mid-term election years since 1946 has been 17%. For all years since 1946 the median drawdown is 11%.

Mid-term election years are known for being volatile and this year is no exception. Don’t be surprised to see a continuation of this trend as we continue to navigate an environment where inflation is at 7%+ and the Fed is initiating a rate-hiking cycle.

Related: President Biden’s approval ratings have seen a huge swing from a year ago plummeting from 50%+ of Americans approving to around 41% today. The betting markets are forecasting that Republicans will take control of both the House and the Senate in this year’s elections. The good news is that historically speaking gridlock has been better for the stock market than full Democrat control (President+House+Senate).

In the end politics matter much less than you think they would when it comes to investing. The stock market has seen forward progress over the long-term irregardless of who has the power in Washington. Although mid-term election years typically bring some uncertainty and heightened market volatility, the market is ultimately resilient.

Nobody knows exactly what the rest of the year will look like for the stock market. The only thing we now know for sure is that the volatility we are currently seeing is right in line with a typical mid-term election year. Looking beyond 2022 the future is bright with an abundance of opportunities for the great companies of America.

Invest wisely.

Source: The Bespoke Report, Bespoke Investment Group, 1/21/22.

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Below are 10 of my favorite quotes for investors when going through corrections and bear markets:

#1: The best time to buy stocks is when prices are depressed…

“Buy when there’s blood in the streets, even if the blood is your own.”

-Baron Rothschild

#2: Market corrections are inevitable…

“You need to know the market’s going to go down sometimes. If you’re not ready for that, you shouldn’t own stocks. And it’s good when it happens.”

-Peter Lynch

#3: Be patient and think long-term…

“Invest for the long haul. Don’t get too greedy and don’t get too scared.”

-Shelby M.C. Davis

#4: A reminder not to sell out of fear…

“The investor’s chief problem—and his worst enemy—is likely to be himself. In the end, how your investments behave is much less important than how you behave.”

-Benjamin Graham

#5: Keep your emotions in check…

“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw, irrational emotion under control.”

-Charlie Munger

#6: This too shall pass…

“Your success in investing will depend in part on your character and guts and in part on your ability to realize, at the height of ebullience and the depth of despair alike, that this too, shall pass.”

-Jack Bogle

#7: Don’t try to time the market…

“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.”

-Peter Lynch

#8: Stay the course…

“A 10% decline in the market is fairly common—it happens about once a year. Investors who realize this are less likely to sell in a panic, and more likely to remain invested, benefitting from the wealth building power of stocks.”

-Christopher Davis

#9: Find the opportunities…

“A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.”

-Warren Buffett

#10: It pays to be an optimist…

“The intelligent investor is a realist who sells to optimists and buys from pessimists.”

-Benjamin Graham

Invest Wisely

Successful investing requires patience, discipline and the ability to control one’s emotions. These insights from some of the greatest investment minds in history will help you stay focused on wealth building principles.

The post 10 Quotes to Get You Through a Stock Market Correction appeared first on AdamZuercher.com.

Through today’s close the:

• S&P 500 is -6.5% below it’s all-time high on 1/4/22
• Dow Jones Industrial Average is –5.7% below it’s all-time high on 1/5/22
• Nasdaq Composite is -11.9% below it’s all-time high on 11/22/21
• Russell 2000 (small cap stocks) is -17.1% below it’s all-time high on 11/22/21

So, yes, many stocks are in a correction (technically defined as a 10% decline from an all-time high) that is being led by growth, technology, and small cap stocks.

This is your friendly reminder that corrections are a normal part of investing. In fact, going back to 1980 the S&P 500 has had an average intra-year decline of -14% a year.

Despite having an average intra-year drop of 14% every year, the ending calendar year annual return for the S&P 500 was positive in 32 of the last 42 years, or approximately 75% of the time.

Accumulators Should Welcome Corrections

If you are still actively saving and building wealth by investing in the stock market, then you should welcome these opportunities. In fact, some of the hottest stocks from 2020 are down 50%+ from their highs. If investors liked these stocks in 2020, then they should love buying more shares today at half price!

Stick to your investment plan which should include a systematic way of investing on a regular basis (dollar cost averaging).

Retirees Should Be Prepared For Downturns

Retirees should be prepared for pullbacks, corrections, and even bear markets by building a diversified portfolio that’s in-line with their acceptable level of risk. They should have portfolios that are large enough to cushion downturns. They should have a Bear Market Fund that serves as a source of withdrawals for living expenses during a downturn.

What is a Bear Market Fund? It’s a term we coined for the portion of a retiree’s portfolio that’s invested conservatively enough to live on for two to four years so they don’t have to liquidate investments that are down in price when funding living expenses.

This Too Shall Pass

In 2021, we saw low volatility in the market, and we never had more than a 5% drop from a high. Now we are currently experiencing the 27th correction greater than 5% since March 2009. This is your reminder that there’s no need to panic. Yes, the market is likely to get worse before it get’s better. But, never forget that the market has survived every single one of those 27 5%+ corrections since 2009 and at some point went on to achieve a new high.

Invest wisely.

The post The 2022 Stock Market Correction appeared first on AdamZuercher.com.

When I say they word you know exactly what I mean.

Excellence doesn’t require a big explanation.

You know it when you see it.

When you experience it you walk away saying…“Wow!”

Excellence triggers a positive emotional response.

My definition of excellence is “first-class”.

In other words excellence is the characteristic of being very good, superior, or of the highest quality.

The Mediocrity of America (Many Things)

We founded our wealth management firm nearly 20 years ago with excellence as a core value.

Why is excellence so important to us that it’s a core value?

Because the idea of excellence seems to be a lost art for many. I often joke that I could write a book titled, The Mediocrity of America. Although, I must say it’s not fair to label “America” as a mediocre country. The USA is actually an excellent country comparatively speaking! However, there are many things and experiences I’ve had with poor customer service that show me that some of us seem to have lost our way.

Excellence As a Standard

Mediocrity is now accepted and tolerated way too often! We justify it on behalf of others. We offer grace. Occasionally that’s okay. Everyone has a bad day once in a while. But no one should turn bad day into a bad year. If your company has a culture of mediocrity it’s inexcusable.

I’ve always seen excellence as a virtue. If you are going to do something, why do it any other way than in a way that’s excellent; or, at your best?

I understand… As a young student I didn’t always put the work in to deserve the word “EXCELLENT” handwritten by my teacher at the top of my assignments. But, when it did happen, it sure felt good! It felt right. It’s the way it’s supposed to be.

We dedicate roughly one-third of our lives to our work. If we’re going to put that much time into something, shouldn’t we want to do it with excellence? And if we don’t want to do it with excellence shouldn’t we find work we are so passionate about that we want to be excellent while doing it?

There is no excellence without passion.

It’s very hard to spark desire in someone to go above and beyond. They have to want it for themselves. This is why we look for hungry people when hiring. If we are hiring right, we know that every one of our team members has the propensity to go above and beyond the minimum requirements of a job or project. Hunger is difficult to instill in a person. They either have it, or they don’t.

When a person’s hunger is aligned with work that interests them it can create passion. This is the key to creating a culture of excellence.

There is no excellence without empathy.

All business is about people. To succeed in business is to succeed in your relationships with people. Your clients, customers, team members, and team mates are all human. Virtually everyone with whom you’ll come into contact with has their own goals, fears, insecurities and misperceptions. These are not to be disputed or argued with; they’re to be empathized with.

Excellence only comes from engaging people.

You see, listening can be a competitive advantage. Excellence is more temperamental than it is intellectual. Excellence is a result of connecting with people on an on an emotional level which is exactly where they make all their critical decisions.

Let’s all work together to be the antidote to mediocrity…

Be excellent!

The post Excellence appeared first on AdamZuercher.com.

The biggest economic news item of the past week was the December inflation update. CPI was up +7.0% for the year 2021. This was the largest year-over-year increase in inflation since 1982!

Core CPI (excludes food and energy) was a bit hotter than expected, coming in at +5.5% year-over-year.

After digging into the inflation report we see that the vast majority of the recent surge in prices appears to be tied to the pandemic’s effects on consumer demand rather than the labor market. This is evidenced by the big turnaround in durable goods (home furnishings, appliances, etc.) which have unwound two decades of deflation over the course of the last two years. This huge increase in spending on durable goods has created huge price effects, magnified by supply chain shortages. While labor markets are tight, it’s not clear that they’re feeding directly into higher prices for services…yet.

Now that inflation has consistently been tracking well above the Fed’s target of 2.0% all eyes have shifted to the Fed which has correctly (in my opinion) become more hawkish than they were a year ago.

The bond market is also anticipating higher rates, and investors have been selling treasuries in anticipation of tighter Fed policy in 2022.

How have stocks performed during prior periods of 7%+ inflation?

There have only been four other times since 1950 that y/y CPI reached 7% or more: 1951, 1973, 1977, and 1978.

So, how did stocks do in these environments? Overall, returns were mixed:

1951

• The S&P 500 was just -0.4% off its 52-week high when CPI first crossed 7%.
• Months with CPI above 7%: 7
• S&P 500 Performance during 7%+ inflation: +3.4%

1973

• The S&P 500 was already -13.3% off its 52-week high when CPI first crossed 7%.
• Months with CPI above 7%: 28
• S&P 500 Performance during 7%+ inflation: -13.5%

1977

• The S&P 500 was a -8.7% off its 52-week high when CPI first crossed 7.0%.
• Months with CPI above 7%: 1
• S&P 500 Performance during 7%+ inflation: -2.4%

1978

• The S&P 500 was a -4.4% off its 52-week high when CPI first crossed 7.0%.
• Months with CPI above 7%: 46 (The longest streak of 7%+ inflation occurred between 1978 and 1982.)
• S&P 500 Performance during 7%+ inflation: +15.1% (While 15.1% is positive, this was over the course of almost 4 years, and the S&P 500 was up just 1.8% in the first 12 months after inflation first crossed 7% in May 1978.)

Today

• The S&P 500 was just -0.6% below its 52-week high when CPI first crossed 7%.
• Through today’s (1/18/22) close the S&P 500 is now -4.6% off it’s all-time high.
• It’s notable that interest rates are much lower than past periods of 7%+ inflation.

So what is history telling us?

Well, we’ve only had four prior instances to look at where we’ve had 7%+ or more inflation in the past 70 years.

In each of those prior instances, the S&P 500 had returns that did not beat inflation.

In the case of 1973 there was a bear market that was already in the works when inflation crossed 7% in August of 1973. The bear market actually began January 11, 1973 and did not end until the S&P 500 dropped -48.2% when it bottomed on October 3, 1974.

Does this mean I’m predicting poor stock market returns this year? Well, in reality nobody can correctly predict the market consistently. But, if I’m using history as a guide this is a sober look at what could be in store for the year. The probability for a tough year for stocks seems especially possible after three very exceptional years for the stock market (total return of the S&P 500):

• 2019: +31.49%
• 2020: +18.40%
• 2021: +28.71%

The reality is, there is already a bear market in many growth stocks as over one-third of the stocks in the Nasdaq Composite are down -50%.

As discussed last week, value is being rewarded and growth is being penalized as the market expects the Fed to raise rates this year. Higher interest rates make valuations of many fast growing companies less appealing. There is certainly rotation happening as value and “finergy” (financials + energy) stocks are being rewarded while tech and growth are punished. Energy was the only positive sector in today’s trading.

In conclusion, expect inflation to remain high until the Fed raises rates. Volatility in stocks is likely to remain high as the market responds to the Fed and higher rates in the bond market. It seems value is likely to continue to outperform growth in the near future. It wouldn’t surprise me if we see a full correction (-10% or more) during the first quarter. In spite of this, my long-term view is that stocks remain the best asset class when building wealth that exceeds inflation. There will be some great buying opportunities ahead!

Sources:

• The Bespoke Report, Bespoke Investment Group, January 14, 2021.
• Bloomberg

The post Eyes on the Market: Some Observations on 7% Inflation appeared first on AdamZuercher.com.

How audacity can overcome a lack of self-discipline.

Discipline is not one of my greatest strengths.

I used to think it was, but I discovered that what I thought was discipline was actually focus.

If you haven’t taken the Gallup StrengthsFinder Assessment you should. It’s a great tool that will rank 34 different strengths and tell you more about how you are wired.

The Difference Between Discipline and Focus

My StrengthsFinder assessment listed FOCUS as my #2 strength and DISCIPLINE as #25.

So, what’s the difference?

Discipline is all about being orderly and routine. It’s having systems and structure to implement them.

People who are especially talented in the Discipline theme enjoy routine and structure. Their world is best described by the order they create.

Focus is all about zeroing in on something. It’s about having a main purpose, a main interest, or directed attention.

People who are especially talented in the Focus theme can take a direction, follow through, and make the corrections necessary to stay on track. They prioritize, then act.

My StrengthsFinder report says this about my “FOCUS” strength:

“It’s very likely that you thrive in environments where goal-setting discussions are commonplace and clearly defined objectives are agreed upon. Chances are good that you act like a rival when you are pitted against others and only one person can be declared the very best at something. Your deep-seated desire to finish in first place probably drives many of your choices and explains much of your behavior. [Note that “COMPETITION” is also a strength of mine. ] Because of your strengths, you have little difficulty giving intense effort to projects, problems, or opportunities that capture and keep your attention. Driven by your talents, you are typically exasperated by people who cannot set a clear direction for themselves. You can become annoyed by their inability to ignore distractions that prevent them from reaching their goals, meeting their deadlines, or following their plans. By nature, you can mentally zero in on tasks for hours at a time when you have a goal to reach.“

Focus + Audacity = Power Over Discipline

I was listening to Jim McKelvey (co-founder of Square) on the Masters in Business podcast when it struck my how powerful this idea is. We beat ourselves up when we fail to have the discipline we think we need to make something happen. Jim talks about the idea of perseverance and how we all know we need to have grit and a never-give-up mentality when doing something hard. He goes on to say that he’s kind of a quitter except in certain circumstances.

Jim is not a quitter when he feels threatened or terrified.

So, he tends to create situations that put him in those moments. (He admitted that being interviewed on the podcast was one of those situations that made him scared and nervous.)

Jim was talking about the power we can all have as scared humans. If you are audacious enough to cross the line that leads you outside of your comfort zone, and if you are somebody who is willing to do something that is a little bit crazy, then you don’t have to have a lot of self-discipline.

Your self-discipline comes from your survival instinct.

A Life-Hack to Overcome Laziness

This is Jim’s life-hack to overcome laziness…

Put yourself in circumstances where the fear counteracts the lazy.

“I’ve committed to doing this, so now I have to get it done.” So, you don’t have to be disciplined if you are audacious.

Are Your Goals Audacious Enough to Motivate You?

Maybe your goal, or more importantly your “why”, isn’t big enough. Is your “why” so audacious that it makes you terrified?

If your goals don’t scare you, then they aren’t big enough. Wherever you are now, think in terms of 10X. What would it take to multiply your current level by 10X? This could be anything:

• Your free time.
• Your relationships.
• Your income.
• Your investment portfolio.
• Your # of clients or customers.
• Your influence.
• Your health.
• Your faith.

Living audaciously gets you out of your comfort zone. It’s the key to growth. Work to eliminate any limiting beliefs. Think exponentially. Be audacious!

The post Audacity as a Strength appeared first on AdamZuercher.com.

And, I’ve never thought so much about this idea until this past week…

I am in the middle of a writing course called Ship 30 For 30. The idea of this course is to ship (publish) 30 atomic essays (300 words or less) by writing for 30-60 minutes a day. In order to make this happen they suggest the following constraints:

• Write every day at the same time. Block your calendar for no more than one hour.
• Set a timer for 30 minutes and write. Use another 10 minutes to edit and publish.
• Write no more than 300 words.
• Hit publish. Don’t worry about your writing being perfect.

I am on day 9 and I am having trouble distilling my ideas into 300 words or less. My personality is to be thorough and explain things well. I’m also a recovering perfectionist. These traits don’t work well within these constraints.

Like anything else, my hope is to get better with practice.

The Value of Constraints

I know constraints are valuable and often necessary.

• They are an attribute of discipline that when consistently applied can produce great results. (i.e. By consistently going to bed at the same time, and on-time, you will get better sleep.)
• Constraints can act as guardrails keeping you from getting off track. (i.e. Limiting the number of alcoholic drinks in a day/week.)
• Constraints also help set limits, so you don’t end up with too much of a good thing. In investing, it is wise to set constraints on how you will construct your portfolio. (i.e. Never invest more than 10% of your portfolio in one idea, no matter how good the idea is.)
• Creativity thrives with intentional constraints. (i.e. Twitter’s 280 character limit has inspired some of the best ideas into a single tweet.)

Constraints versus Opportunities

The thing I don’t like with constraints is that sometimes they can inhibit new opportunities. Just because my calendar says I’m supposed to be doing one thing today doesn’t mean there’s not a better opportunity that could come along.

It’s good (but not always easy) to know when to make an exception to the constraints you put on yourself to take advantage of life’s opportunities.

But for now, my 30-minute timer has sounded, and I’m going to ship!

The post Constraints appeared first on AdamZuercher.com.

Today, I want to share with you what I’m learning about how we can optimize our brains to achieve better performance.

These strategies are designed to help you perform at your best. They apply to anyone who needs to use their brains to perform well. (Everyone?) They especially apply to entrepreneurs as well as people like me who make investment decisions and manage money for a living.

If you are performing at peak performance you are likely to:

• go farther at work,
• make better investment decisions,
• increase your income,
• be a better leader, and
• have more “left in the tank” when you get home at the end of the day.

Learning From Experts

I’m not the expert on this topic, but I recently heard Louisa Nicola talk about enhancing performance on The Business Brew podcast with Bill Brewster. Louisa is a neuroscientist at Neuro Athletics. Her firm helps athletes and hedge fund managers optimize their brain health in order to help them achieve maximum potential.

After listening to the podcast with Bill Brewster, I have been following Louisa’s work as I’ve decided to be more intentional about performance optimization in 2022.

You can follow Louisa’s weekly newsletter or podcast breaking down the medical and scientific practices so you too can perform at your peak.

5 Categories of Human Performance Optimization

On a recent episode of her podcast Louisa shares the five areas you should concentrate on if you want to achieve optimal peak brain performance:

Category 1: Understanding and Managing Inflammation

It’s important to understand the sources of chronic inflammation. Not only should you spend time understanding what drives inflammation, but it’s important to manage it and make an effort to decrease it through your diet and with healthy sleep.

Category 2: Supplements

There are many opinions on the internet about what supplements we need or don’t need. Here are two of the most important supplements I’ve heard Louisa talk about:

• EPA & DHA Omega 3s – Omega-3 fatty acids are absolutely essential for increasing lifespan and health span by several pathways including decreasing inflammation. A recent study on centenarians (people who lived to be 100) found that the only thing that can predict someone going to that age is decreasing inflammation.
• Vitamin D – Louisa has a follow up episode where she talks about the impact Vitamin D has on your sleep regulation and sleep wake cycles. Not only is Vitamin D important for better sleep, but it’s well known that Vitamin D helps regulate your mood, reduces depression, and helps fight disease and reduces the likelihood of severe illness like the flu or COVID. Louisa takes a daily dose of 5,000 IU of Vitamin D.

When it comes to supplementation, brand is the most important factor as supplements are not regulated. There are many supplements out there that are not high quality and many include fillers and cheap ingredients and they claim to be something they’re not. If you’re not sure where to get your supplements, Louisa recommends Thorne. According to her they are by far the best quality supplements on the market.

Category 3: Hyperbaric Oxygen Therapy (HBOT)

I have never heard of this until now. What is it? Hyperbaric oxygen therapy involves breathing pure oxygen in a pressurized environment.

In a hyperbaric oxygen therapy chamber, the air pressure is increased two to three times higher than normal air pressure. Under these conditions, your lungs can gather much more oxygen than would be possible breathing pure oxygen at normal air pressure. When your blood carries this extra oxygen throughout your body, this helps fight bacteria and stimulate the release of substances called growth factors and stem cells, which promote healing.

In short, it helps heal challenging injuries by delivering oxygen to the cells that need it. It also helps decrease inflammation.

I’m giving this one a SKIP. It’s not for me.

Category 4: Sleep Enhancing Tools

Getting good sleep is critical to peak performance. Here are some tools that can help:

• Smart Mattress Technology: Louisa talks a lot about the Eight Sleep Mattress. I gave it a try and quickly discovered it’s not for me. So, instead I am going with a Sleep Number mattress.
• MUSE headband: This is a tool to help calm your mind. I’ve never heard of it, but sounds like it could be beneficial for some. I’m giving it a PASS.

Category 5: Wearables

You cannot optimize what you don’t measure. The technology with various types of wearables has come a long way over the past decade and is destined to only get better with time.

Here is what Louisa wears and why:

• Oura Ring: It provides the closest data to an in lab sleep study (PSG).
• Whoop Band: It has the most accurate measurement of heart rate while working out.
• Garmin Forerunner 935: It is great for tracking runs, swims, and bike rides.

After looking into all of the above I’m sticking with my Apple Watch for measuring heart rate and workouts, and I’ll track my sleep quality in the Sleep Number app.

Create Your Own Path

We can learn a lot from experts like Louisa, but it’s important to create your own path that’s designed around your unique life situation. She is just one of several experts on health and performance optimization that I follow. It’s important to hear what the experts say, but to tailor their advice to something that works for you. Once I’ve got it all figured out I’ll be sure to share my own protocols.

The post How To Optimize Your Brain For Peak Performance appeared first on AdamZuercher.com.

Since my oldest daughter is turning 18 soon, I’m getting a lot of these questions from her friends. It seems that they think I “know a lot about this stuff”, so they are interested in learning from me.

The questions I commonly get are:

• Can you give me some advice on what books to read?
• What steps can I take to educate myself on how to make my money grow?
• What do you recommend I start doing to learn more about stocks, investing, and how to make money grow?
• I have some money I’ve saved up from summer jobs and it’s just sitting in savings earning virtually nothing. What can I do to make it grow?
• I’m thinking about putting my money in an aggressive mutual fund during college so it will grow into something I can use after I graduate.
• What would you recommend I do with my savings?

Do you see the theme? These are actual questions and the common theme is:

How can I learn how to make money grow?

Well, this is certainly a loaded question! As a financial advisor I know it’s not one that’s easily answered over a text message. The last thing I want is to be misunderstood in a way that leads this young new investor down the wrong path. I need to understand more about their situation, their goals, and their investing time horizon.

So, I invited my friend to meet me and here are five things I told him…

Steps to Learn How to Make Money Grow

#1 – Understand what type of investor you want to be.

The very first question you need to ask yourself is…

Do you want to be a “hands-on” investor or a “hands-off” investor?

There’s a big difference in the path you should take depending on your answer. I have found that some people who reach out to me with these questions are just looking for a place to invest some money where it will grow without a lot of effort or without a detailed understanding on their part. Others want to learn how to pick stocks, actively manage their account, and possibly even take on a career in investing.

The books, blogs, and podcasts I recommend are much different for each path. Someday, I’ll get around to putting my list on my website, but for today, there is one book everyone should read to start their journey and it’s listed in my next point.

#2 – Read Simple Wealth, Inevitable Wealth by Nick Murray.

When my friend came to visit me at my office I pulled no less than eight books off the shelf and then mentioned another five more when he asked for some recommendations. I quickly realized that this would be overwhelming for anyone wanting to learn about investing. Especially someone in college who has plenty of reading to do as it is!

Quick side note: When I was in college I couldn’t wait to graduate and begin my career. For some reason I thought graduation marked the end of learning and the beginning of working and earning. Let’s be honest… When I was in college I hated to read! However, once I began my career, I quickly realized that learning is the key to working successfully and increasing your earning potential. I now hold lifetime learning as a value of mine and I’ve discovered that I actually enjoy reading about things I’m interested in.

Okay, back to books. If I had to narrow it down to one book everyone should start with it’s Nick Murray’s book, Simple Wealth, Inevitable Wealth.

It doesn’t matter if you want to be a hands-on or hands-off investor. Either way, this book will provide the basic understanding of:

• why stocks are essential to creating long-term wealth,
• why it’s important to have an investment plan, and
• what the true risks to a long-term investment plan really are.
• Nick also explains why some investors (hands-off investors) should have a financial advisor guiding them through all the fears (and fads) investors can be sure they will face on their investment journey.

The book is actually generally sold to financial advisors to give to clients. It’s hard to find at a reasonable price anywhere other than directly from Nick. Note that you also want the most recent version which is the 20th Anniversary Edition. Get the book at NickMurray.com.

#3 – Read my whitepaper, The Power of Compounding.

I wrote this many years ago to illustrate how powerful compounding can be. In this paper, I discuss:

• The cost of waiting to invest.
• The Rule of 72
• What it takes to accumulate $1 million.

#4 – Read my blog post, How To Create Wealth.

In this post I share my 8 Principles of Wealth Creation. These are the principles I’ve learned from my own experience.

#5 – Get started by opening a brokerage account.

I am a strong believer in learning by doing. The next step is to TAKE ACTION!

I recommend opening a brokerage account at Fidelity Investments.

Fidelity will be the custodian of your account. Fidelity will also give you a platform to buy and sell stocks, bonds, ETFs and mutual funds.

Most of the questions I get are on how to grow your money long-term and in the stock market. Due to the volatile nature of stocks it’s important that you don’t invest money that you will need in the next 5 years. There’s also no guarantee that you won’t lose money. The ideas in this essay are to give you some direction on where to look next. They aren’t investment recommendations or advice since I don’t know your specific situation and can’t determine their suitability for you.

With that out of the way, I know you are reading this for some ideas. So, I suggest you start you investment journey by selecting from 3 types of investments:

1. A broad market index fund. You have likely heard of the Dow Jones Industrial Average or the S&P 500. These are indices that track the US stock market. The Dow is a 30-stock index, while the S&P 500 is an index that includes…you guessed it…500 companies! You can buy a mutual fund or ETF that owns all of the companies in the index. This is a nice starting point if you don’t have a lot to invest yet. You get exposure to 500 companies across all sectors of the US economy.
   • IDEA: My friend chose an ETF that tracks the S&P 500.  iShares Core S&P 500 ETF (Ticker: IGV)
2. An actively managed mutual fund or ETF (Exchange Traded Fund). An index fund is a passive fund because you are simply owning the stocks in the index. The alternative is an actively managed fund that is professionally managed. Active funds invest in themes or certain areas of the market. The stocks are hand-picked by the manager because the manager has done research and believes they will do well.
   • IDEA: My friend chose an ETF that invests in companies that are relevant to the theme of “disruptive innovation” defined as the introduction of a technologically enabled new product or service that potentially changes the way the world works.  ARK Innovation ETF (Ticker: ARKK)
3. Individual stocks. This category is for those who want to be more hands-on with the investments they pick. However, even as a hands-off investor it’s also good to own a few individual stocks to see how the market works and how stock prices react to things like company announcements, product releases, earnings reports, and other news.Create a list of companies you know well and then pick 3 to start with. A good principle to follow is invest in what you know. In other words, look around you to see what products and services you are buying or using. Find the stock behind those companies and start there. If the company is profitable and growing sales and earnings, it’s a good candidate. Do your homework. This is the harder part, but there are many books written on how to find and research stocks.
   • IDEAS: My friend walked away with a list of three companies that he understood well and planned to research further.  Apple (Ticker: AAPL), Amazon (Ticker: AMZN), and Wal Mart (Ticker: WMT)

Never Stop Learning

Now that you have a basic foundation of investing in the stock market and your brokerage account is setup it’s important to keep learning. Read books, read blogs, and listen to podcasts to continue your education.

My team is constantly publishing content that can help you on your journey:

• 7am Saturday: My weekly newsletter where I curate all of my writing as well as the most interesting content I discover. I share my recommendations for any books, articles, or podcasts that I find interesting or helpful as if we were having breakfast on a Saturday.
• TonyHixon.com: A blog by Tony Hixon. Tony’s mission is to help people with their finances so they can invest wisely. But he doesn’t stop there. Tony approaches financial advice in a different way. He firmly believes that his readers aren’t served when we only look at the numbers. He views life holistically to make sure your life is in line with your values.
• The Everyday Advisor Blog: A blog by Jessica Hinks, CFP®. Jessica writes to bring financial clarity for people just like you. Her blog will equip you with knowledge and inspire you to tackle your financial issues. Jessica writes with the goal of helping you experience the peace and contentment that comes with financial security and clarity.
• The Invested Dads Podcast: Listen in as Josh Robb, CFP® and Austin Wilson bring you relevant and clear thoughts that enable you to be more comfortable with your financial situation. Through informed discussion, along with the occasional dad joke and some humorous banter, listeners can expect to learn about a variety of investment and financial planning topics as well as many of the stories and choices facing investors today.

You can signup to follow all of the above content on each of their email lists. Follow along, and I promise we will help you on your journey to make your money grow!

The post How to Teach Yourself to Make Money Grow appeared first on AdamZuercher.com.

It doesn’t make sense to you (yet), but you want to learn more.

The problem is you don’t know where to start. I’m going to give you 5 simple steps to get going.

Why should you care?

• Opportunity: Bitcoin has had the highest return of all major asset classes in 9 out of the last 11 years. The annualized return for Bitcoin since 2011 was 223.99% while the S&P 500 saw an annualized return of 14.64% (see table below). While we know that past performance doesn’t guarantee future results, this should be enough to get curious and want to learn more about cryptocurrency as an asset in your portfolio.

Source: Onramp Invest. Data quoted represents data as of 8/1/2021.

• It’s the future: Unfortunately, many people never explore their curiosity with crypto. They are simply overwhelmed by all the new concepts and terminology, and they don’t know where to start. Others are skeptical about it’s long-term viability and think it’s just a fad that will go away. In my opinion, although it’s still early, we are too far along for it to go away. Crypto currency and crypto assets are here to stay. I’m not making any predictions on which cryptocurrencies are here to stay. Just as companies can come and go in the stock market, cryptocurrencies may or may not last.

Follow these steps in 2022, and I know you will learn a lot. Most importantly, you will learn enough to know if it’s an area you want to invest in.

Step 1: Get a quick overview of how Bitcoin works.

You can get visit the “How It Works” page on the Bitcoin website for a high-level overview that will only take you about five minutes to read.

Step 2: Read the original Bitcoin whitepaper.

Once you have that basic understanding of how Bitcoin works, the very next best place to go is the 9-page whitepaper that started it all.

Whitepaper Link  Bitcoin: A Peer-to-Peer Electronic Cash System

Satoshi Nakamoto published this whitepaper on October 31, 2008. The paper proposed a purely peer-to-peer version of electronic cash that would allow online payments to be sent directly from one party to another without going through a financial institution.

The first Bitcoin transaction was in January of 2009, with the currency available for open purchase and trading in July of 2010.

Step 3: Read the book, “Cryptoassets” by Chris Burniske.

Now that you have a basic understanding of how Bitcoin works it’s time to dive deeper. If you enjoy learning by reading books then start with this one.

Amazon Link  Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond

If you don’t like reading books and want to learn in bite size chunks feel free to skip this step and go to Step 4.

Step 4: Explore CoinDesk.

If I had to pick one website where you can go to learn more and keep up with the developments in the emerging crypto economy it’s CoinDesk.

CoinDesk is a website that offers news, events, data, and research on all things Crypto.

Start with the Crypto Explainer+ area of the site where you can learn more about crypto no matter what level you are at in your journey. They have crash courses and a dictionary for all the new terms you will learn.

If you are like me and like to learn while you are on the move (in the car, working out, or on a walk) don’t miss the many podcasts you can find through CoinDesk.

Step 5: Open a Coinbase account!

This is arguably the most important step because it’s the step where you will take action! You can get started with Bitcoin, Ethereum, and other cryptos without learning all the technical details.

Don’t feel like you have to have a complete understanding before you make your first investment or purchase. In my experience, the absolute best way to learn something is through hands-on experience.

There are many ways and places to invest in crypto, but my favorite is Coinbase. Coinbase was started in 2012 and their platform is easy to use. At the time of this writing Coinbase has over 73 million people and businesses buying, selling, and managing their crypto through their platform.

Once you setup an account you will need to transfer funds into the account, and you will be ready to make the first purchase. Start small. Only invest money you can afford to lose. Starting out, this should be less than 1% of your investment portfolio.

Get Started Today

I made my first purchase of Bitcoin on the Coinbase platform in 2017. It was a great decision. It’s through hands on investing and learning that I’ve built my knowledge of digital assets. You too can become a digital asset investor following these 5 simple steps.

The post How To Become a Crypto Investor in 5 Simple Steps appeared first on AdamZuercher.com.