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financial planning

Deducing the Culprits Behind the Recent Market Volatility

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Paul Reback, President of Capital Estate AdvisorsHello volatility, my old friend.

By now, you’ve seen the headlines, full of scary-sounding words like rout and stormplunge and crash.  Whatever you want to call it, investors have certainly endured a rough time over the past few days.  The Dow, dominating the media’s coverage as usual, dropped more than 600 points on February 2, and almost 1,200 points on February 5.  That’s a single-day decline of 4.6%, the largest since 2011.  The other major indexes were shaky, too.

It’s been quite some time since we’ve seen volatility like this.  The S&P 500 skyrocketed almost 20% in 2017.  What was even more amazing last year was how calm and consistent the climb was.  Since the election, any declines have been mere blips on the radar screen. Read More

Being impulsive with financial decisions can cost you.

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Ever notice how much human beings act on impulse? Advertising companies sure do! So do car dealerships, banks and your local gym. Every time you go to the checkout counter at a grocery store, the strategically-placed candy bars and tabloid magazines are practically crying out: “Buy me!”…even though, five minutes before, you neither needed nor wanted them.

Pay attention the next time you watch television, or go to a store, or even open your mail. Entire industries are built on capturing the human impulse. Most of the time these impulses are harmless enough, but the worst of them can have serious consequences. In fact, one of the greatest dangers to our financial health is the fact that we don’t always think before we act. We don’t look before we leap. And we give up things we want most for the things we only want right now.

Not surprisingly, our best defense against these dangerous impulses is simple common sense. Whenever I need to renew my stock of common sense, I turn to the legendary Aesop who explained common sense in his fable, The Fox and the Goat: Read More