“George Costanza – Investment Guru?”
Is George Costanza smarter than we give him credit for? While he may be the self-professed “Lord of the Idiots,” one of the ideas that George advanced during his character’s tenure on Seinfeld is directly applicable to the mindset needed to successfully build net worth and handle the temperamental stock market.
As we are all aware, the financial markets are extremely volatile. Tariffs and a concurrent trade showdown with China, corporate earnings announcements, interest rate fluctuations, daily economic announcements, and the ongoing Washington D.C. political soap opera are just a few of the myriad of drivers (read: noise) contributing to the shorter-term fluctuations of the financial markets.
We feel the more important question is: How much of this noise should matter to an investor looking to grow their portfolio and net worth? And we feel the answer is: Not very much.
We believe it is good to be skeptical of market advances, and conversely, to expect (we would argue, even embrace) market pullbacks, a very healthy philosophy that can none-the-less seem counter-intuitive. In other words (and as a shout-out to you Seinfeld fans out there), consider applying the George Costanza approach to investing, do the opposite of what you are hearing from your friends and from the media, and do the opposite of what also, instinctually, may feel right to you:
Two final illustrations supporting our point:
1. Expect pullbacks.
2. Bulls are bigger and longer than bears. The average bull stock market period lasted 9.1 years, with an average cumulative total return of +480%; the average bear stock market lasted 1.4 years, with an average cumulative loss of -41%.
Closer to home, we trust it is evident that at Towerpoint Wealth we take great pride in serving our clients as a fully independent wealth management firm; but being independent does not mean being alone. The partnerships we continue to develop with financial industry leaders allows us to leverage the expertise of important external resources, as evidenced by our meeting on Wednesday with Erik Feldmanof Schwab Advisor Services, and Tom Glamuzina of Dynasty Financial Partners, at TPW’s downtown Sacramento headquarters.
Both Erik and Tom, along with Dynasty and Schwab, provide us direct support and counsel as we refine and improve our client service offering and internal systems and procedures, and we feel extremely fortunate to have them as part of the Towerpoint Wealth team.
In addition to the TPW firm development activities mentioned above, there have been a number of trending and notable events that have occurred over the past two weeks:
- Classroom shooting kills two students at UNC-Charlotte
- U.S. Attorney General William Barr skips House Mueller report hearing
- Drake dominates 2019 Billboard Music Awards
- Peter Mayhew, Chewbacca in Star Wars, dead at 74
- Country House wins a highly controversial 2019 Kentucky Derby
- One student dead, eight injured in Colorado school shooting
- Liverpool stuns Barcelona in Champions League Soccer
- White House instructs former counsel Don McGhan not to comply with Congressional subpoena
- 1985 – 1994 tax returns of President Donald Trump obtained by the NY Times
Lastly, please take three or four minutes to review the curated content found below, highlighted by:
- Our most recent April, 2019 Monthly Market Lookback, “This Is It!”
- An excellent illustration that reviews just how important it is to diversify your portfolio, and just how cyclical the investment markets are
- An excellent app, if you never want to rent a boring ride again
We encourage you to reach out to us (firstname.lastname@example.org) with any questions, concerns, or needs you have. The world continues to be an extremely complicated place, and we continue to be here for you, and look forward to connecting with, helping, and being a direct, fully independent, and objective expert financial resource for you.