fbpx Skip to content

Weekly Market Recap – 12/13

60 Second Market Review

What happened?

  • Just when you thought the market was scared… The December Effect comes into full force, another record close for the S&P 500
  • With 20 years to invest, how much can your portfolio make? 

Things to be aware of…

  • Picking a business name and entity – a not so easy task, but important. It’s your brand. And there’s more to do after. 
  • 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? 

Just when you thought the market was scared… The December Effect comes into full force, another record close for the S&P 500

Source: Ycharts

Actionable Items for You:

  • Well, just when everyone thought the market would keep going lower… it regained its yearly highs.
  • Only 11% of paid money managers beat their benchmark long-term – why do you think you can? Passive investing is the key to financial success.

How’s that for a turnaround? We mentioned in the last two weeks that the best thing you can do in times of market jitters is to do nothing, and this week bore fruit for us. Stock markets surged, with the S&P 500 gaining 3.8%, the tech-heavy Nasdaq index gaining 3.6%, and the Dow Jones Industrials gaining over 4% for the week.

What happened? Well, in contrast, there was a pretty high inflation reading for November – the highest in 39 years – at a 6.8% increase over last November’s inflation. This was slightly higher than expectations at 6.7% as well, something which you would expect the market to sell off on.

Of course, it didn’t, and the market took it in stride, pushing to a new closing record on Friday. 

What gives? Well, first, remember that nobody is smarter than the market, so thinking you know what the market will do is a fool’s errand. In fact, even those highly-paid money managers tend to underperform, and it’s not particularly close.

Check this stat: only 11% of actively managed large-cap funds outperformed their passive peers over 10 years.

What?? Some of these managers get paid literally millions to do what they do. And only 1 out of 10 can beat a cheap (almost free) index investment that they are compared to. 

So when you hear your friend or family member talking about the next big stock, or how they’ve got the secret stocks, remember that stat. If almost 90% of paid money managers can’t beat their index, what makes you think your Uncle is, over the long term?

We don’t know when the market will go through another correction (10% loss), or even another bear market (20% loss). It will happen, that is for sure. But thinking you know when that will happen is, clearly, not a profitable venture. What is profitable is staying invested long-term, and sticking to your strategy.

 

Want to know how we strategize your investment portfolio long-term? Feel free to set up a time to chat

With 20 years to invest, how much can your portfolio make?

 

Source: Ycharts

Actionable Items for You:

  • In a 20-year period with the Tech Wreck and terrorist attacks in 2001, the financial crisis in 2008, and the covid-19 pandemic you would think stock markets would have poor returns, right? Wrong. 
  • We can’t guarantee the next 20 years will be as good, but we’re pretty sure they won’t be bad. 

Sometimes, sticking to that investment strategy is more important than the strategy itself. In the most recent 20-year period, from 2001 to 2020, there were three bull markets and three bear markets – with a number of major downside events (known as “black swan” events). The Tech Wreck and terrorist attacks in 2001, the financial crisis in 2008, and the covid-19 pandemic. You’d expect returns to be pretty bad over that period, right?

The S&P 500 returned an annualized 7.46% in that time, for a total return of 322.3%. And for those paying attention, 2021 is a pretty good year too, adding to those numbers: 

At the end of the day, we know that being patient and calm during extreme volatility can lead to some pretty incredible outcomes for you and your family in the long run. Let’s get you started on your financial future. Feel free to set up a time to chat.

Things to be aware of…

Picking a business name and entity – a not so easy task, but important. It’s your brand. And there’s more to do after. 

Actionable Items for You:

  • Naming your business is step one on the new journey, whether it be for a side hustle or long-term career. 
  • There are a few other things you need to do after picking your business name – getting that business bank account is key to staying organized. 

When you’re starting your business, one of the first things you have to do is pick what your name is going to be. While this is an important task, and you shouldn’t take it lightly, you should try to have some fun with it. When you’re brainstorming, remember to be creative. And if you get stuck, try a free business name generator like this one from Shopify: https://www.shopify.com/tools/business-name-generator 

That’s step one. Step two, after you’ve found a name and brand you like, don’t get too attached yet. You have to check its availability. If you’ve passed through the hoops, it’s now time to register your business name.

Who knew starting a business had so many rules?

Once you’re good and registered, you have to choose a business type, and the best way to do this is to shortlist business types with pros and cons. You need to do this before opening a business bank account.

Why is a business bank account important? Really, accounting. You need to keep your business income and expenses separate from your personal income and expenses, and the easiest way to track this is to simply separate them. This will help stay organized and make filing your taxes easier, saving you some valuable time to keep working on that side hustle. 

Do you want some help with your business name and getting set up? We’re here to help. Schedule an Intro Call Today.

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

Table of Contents

Let's Talk

To schedule a free consultation, fill out the form below.

Name
Name

You don't have credit card details available. You will be redirected to update payment method page. Click OK to continue.