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Weekly Market Recap – 12/06

60 Second Market Review

What happened?

  • What do a jobs report miss, Omicron variant, and no longer “transitory” inflation do to stock markets? Here’s why you shouldn’t worry too much, despite a recent pullback. 

Things to be aware of…

  • Funding your side business – Financial Planning and Time Management
  • Want to double your wealth? Forbes says those with a plan have double the wealth than those without one. Get your financial plan today.

The Details

What happened? 

What do a jobs report miss, Omicron variant, and no longer “transitory” inflation do to stock markets? Here’s why you shouldn’t worry too much, despite a recent pullback. 

Source: Ycharts

Actionable Items for You:

  • Again, stocks were down this week due to a big-3 – the Omicron variant, a jobs report miss, and inflation. But how much were you down? If you’re appropriately diversified, probably not that much. 
  • Markets are still having a banner year, and December is a positive month 74% of the time in the last 100 years – you know what to do. 

A lot happened in the last week of note, and markets were not enjoying it. The S&P 500 dropped 1.2%, the Dow Jones dropped 0.9%, and the tech-heavy Nasdaq index dropped over 2.6% for the worst performer of the bunch. 

What happened? A few things together, at least on the surface. The world is worried about the Omicron variant of Covid-19 leading to further lockdown restrictions, although we are a couple of weeks away from really knowing. The monthly jobs report for November came in far less than expectations, with just 210k jobs created versus expectations of 573k from Wall Street. And to top it all off, inflation has been running hotter than expected for longer, and Federal Reserve Chairman Jay Powell stopped calling it “transitory” – thus hinting at hiking interest rates to slow down the economy sooner than expected. 

That’s what we call a trifecta of bad news. 

However, while the markets are off all-time highs, it’s still not time to worry. The reason is timing the market is inherently complex; some say impossible. And while there could be more downside days like today, December is generally not a month you want to be in cash.

Source: Bespoke Investment Group

December has historically produced positive returns 74% of the time in the last 100 years. Not only that, if you’re investing in a diversified portfolio as we profess, your returns will be more geared toward the S&P 500 type returns versus the Nasdaq, and you won’t be taking on as much risk overall. That means you probably didn’t notice much of a value change in your investments (depending on how aggressive you are). 

It also helps to keep in mind how well the markets have done this year. 

Source: Ycharts

Even after this multiple-week pullback, the S&P 500 is still up 20.8% year-to-date. 

It’s also good to remember that the stock market pulls back 5% almost every year, 10% every other year, 30% every 4 to 5 years, and 50%+ once a generation. 

You know what to do: stay invested, stay the course, and get long-term financial freedom. 

Want to know how we set up our portfolios? Feel free to set up a time to chat.

 

Things to be aware of…

Funding your side business – Financial Planning and Time Management

 


Actionable Items for You:

  • The first step to any business is knowing what funding you need upfront. Planning for it in advance can help. 
  • Getting going can take some time, so be prepared to put in the work. Time management and managing your productivity are key. 

Last week we accounted for start-up costs for your new business. This week, we want to discuss financial planning and time management for your side business. Now, we need to plan to cover these expenses. 

Financial Planning

The first step is to consider your sources of funding. If you have savings to cover your start-up costs, awesome! If not, it is a good idea to put a plan to save up for the costs. Keep in mind, this savings plan should not replace an emergency savings plan, something all of our clients at Freeman Capital are encouraged to do.

One thing to note – if you’re taking on a side hustle for financial reasons, it’s important to remember that you may not start making money right away. Building up a network and contacts takes time, and profits may be slow when you’re starting out. It’s exciting, but if you’re serious about getting some extra cash, you have to put in the work.

The next financial consideration to keep in mind is your cash flow. Also called your working capital, your cash flow is how much you need to keep your side hustle running day-to-day. These costs need to be laid out as part of your operating expenses. Operating expenses will give you a baseline of how much cash you’ll need, at a minimum, each month to keep your business going.  

You will need a plan for staying on track with your cash flow. That’s where your business budget comes into play. Having a solid business budget is essential to the success of your business, allowing you to manage your business finances properly and stay on top of your expenses.

Time management

While the financial side is important, there is one finite resource – Time. Consider how much time and when you will work on your side business. 

Taking on extra responsibilities will always demand sacrifice, but weighing the potential consequences is essential. Will it negatively affect your family life, for instance? If your day job often requires overtime or frequently being on call, this may make side hustling difficult. Start with a calendar and utilize some time tracking tools.

Whether you use a digital or physical calendar, your first step should be blocking out the hours you’ll be doing your day job, followed by any other commitments (social, family, or otherwise) that will take up your time.

Once you’ve done this, you’ll need to break down the demands of your side hustle into separate tasks to be completed, whether these are recurring or simply one-off. You’ll not only make everything feel a little more manageable, but afterward, you’ll also be able to work out where in the week you’ll have time to complete them. Scheduling apps like Timely are great for this purpose, allowing you to create to-do lists and then drop and drag tasks from them straight into your calendar.


Managing productivity

Track your time to see how you’re spending your productive hours – it’s beneficial to see how long you’ve spent on a given task and where you get distracted. Or if you’re playing too many video games or scrolling on Instagram… 

Working out a good, productive balance between your side hustle and your primary job will require an adjustment period, so don’t be disheartened if you’re finding things difficult at first.

You can ease this adjustment by reflecting on how you’ve used your time. In particular, check what you planned to do against what you ended up doing, how long different tasks took you, how much “deep work” you were able to do, and what routines worked best for your focus.

Do you want some help planning for your side hustle? We’re here to help. Schedule an Intro Call Today.

Want to help us? Share this with your friends and family. 

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