Monday Market Update – October 25

Forefront’s Monday Market Update

Zoom Out

I love writing the Forefront Market Update each week, and I generally try and make it informative, educational, and entertaining without trying to tap into the emotions of anger, outrage, or fear the way our “news” industry is currently structured. What I have realized though, is that as we focus more and more, it gets overwhelming, and we lose perspective. Not just on investing, or our financial plan, but on life all together.

Apple

If you had invested $10,000 in Apple, in October 1991, you would have had $2,675 in December of 1997. That would have been a loss of 73.25%, with an average loss per year of 12.20%. Today, the value of that investment would be $4,000,000.

I hate examples like this because the average investor would have sold at a loss, kicked themselves when it went back up, bought back in, doubled their money and sold, and kicked themselves again for selling.

What this shows me is that life is never straight up and to the right. It is a long-term game, but you need to learn to take some punches along the way, or else you will have a tough time getting through it. This doesn’t mean go buy apple or some other stock, it means that if today is really hard for you, zoom out, tomorrow will be better.

Money shouldn’t be the goal

Many advisors sit down with prospective clients and ask a simple question. “How much money do you think you will need in retirement”? Simple, and straight forward, but misses the point of a financial plan, and financial planner altogether. When we focus on the dollar amount, or on money in general, we lose perspective. We stop being able to zoom out.

Focus

Money is a tool that should be given purpose, but can never be your defining purpose.

The purpose of money is freedom. The freedom to do what you want, when you want, with whom you want, for however long you want, wherever you want.

I don’t ever ask my clients how much they think they need, but rather I ask them what do they want to spend the money on?

The first few answers are always a beach house, or a Tesla/fancy car, but as the conversation develops, we start to get into what they would really spend the money on. Life experiences start to come to the forefront and you find out about people’s goals to help family with education, start a community garden, or buy an RV and travel the country with their spouse like they were newlyweds again. Every single one of those things gives us perspective on life, and motivation to work towards it.

Most anticipated earnings for this week: