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The 11 Best Quotes about Investing

There’s so much to learn about investing. One of the best ways to understand the industry is to study some of the great investors and purveyors of financial knowledge. Here, we share 11 quotes by philosophers, businesspeople, and investors. We hope you learn something new and enjoy studying the history, context, and meaning behind these insightful quotes.

1. “An investment in knowledge pays the best interest.” — Benjamin Franklin

This is such a good quote because it refers to educating yourself to become an empowered investor. Financial literacy is crucial for diving into the investment world, and there are no better returns than those you gain from education.

2. “In investing, what is comfortable is rarely profitable.” — Robert Arnott

This quote may not seem directly related to the first quote, but education is often the first foundational step. The more educated you are, the more confident you feel when stepping out of your comfort zone. It’s important to have an investment portfolio that aligns with your personal risk tolerance and goals, but you’re inevitably going to have to make decisions that might make you uncomfortable.

3. “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” — Robert G. Allen

While savings accounts are a great financial tool for keeping some of your money readily available, they traditionally have low interest rates that won’t contribute to your growing net worth. While a market investment might not be as safe as a savings account, it will still grow quicker.

4. “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” — Robert Kiyosaki

This is a great quote about protecting your wealth and making it work for you. Money and capital gains do you no good if you blow them all.

5. “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” — Paul Samuelson

There is certainly a thrill of investing in the market, but the most successful investors value thoughtfulness and research over impulsive decisions. Good investors are in it for the long haul, not for the thrill of the chase.

6. “With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future.” — Carlos Slim Helu

When looking at market trends, it’s clear that history repeats itself. Understanding this history will make you a more educated investor.

7. “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” — George Soros

None of us have a crystal ball, so it’s impossible to tell if you’re going to be “right.” Instead, focus on maximizing your gains and minimizing your losses.

8. “I don’t look to jump over seven-foot bars; I look around for one-foot bars that I can step over.” — Warren Buffett

Sometimes, when it comes to investing, simpler is better. Rather than reinventing the wheel, you should focus on consistent performers and making your life easier (and hopefully more profitable).

9. “Invest for the long haul. Don’t get too greedy and don’t get too scared.” — Shelby M.C. Davis

Investing in the market is a long-term play, and your portfolio should reflect your personal timelines. It’s okay to invest for short-term goals as well, but that will likely change your strategy.

10. “The intelligent investor is a realist who sells to optimists and buys from pessimists.” — Benjamin Graham

The financial markets are all about patience. Optimists will buy high, pessimists will sell low, and the intelligent investor capitalizes on both of these emotional decisions.

11. “Know what you own, and know why you own it.” – Peter Lynch

When it comes to quotes about investing, this one is a classic. It goes back to being financially literate and understanding your choices. Know the “why” behind your portfolio. Don’t hesitate to ask questions; your financial advisor is a part of your team and will be happy to help you understand what you’re investing in.

Did we miss any important quotes about investing? We would love to hear yours!

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Spotting Red Flags When Picking An Advisor

Do you know what red flags, but also some good signs, to be on the lookout for when you’re searching for an advisor to work with as you prepare for retirement? On this episode, we’ll give you some red flags to be aware of, and teach you how to spot them.

Risk Management: Modern Portfolio & Behavioral Finance Theory

Investing strategies consist of a few different types of financial theories. This article examines two popular theories you may have heard of: modern portfolio and behavioral finance theory.

Modern Portfolio Theory (MPT)

Modern portfolio theory, also called mean-variance analysis, is a widely used model for structuring your investment portfolio. MPT was developed by Nobel Laureate Harry Markowitz, who was one of three recipients of the 1990 Nobel Memorial Prize in Economic Sciences for his theory of portfolio choice. The theory behind MPT is that investors should spread out investment portfolio risk by diversifying their holdings into safer, more stable investments with lower returns, as well as into riskier investments that may reap bigger rewards.1

MPT examines historical data to determine which investments are considered the riskiest.

MPT makes a few upfront assumptions. The first is that the financial markets themselves are efficient. MPT also believes that investors are largely rational, with the capability of choosing an optimal portfolio. Additionally, MPT assumes that investors are largely risk-averse and would rather have more stable investments with a greater likelihood of a return, even if those returns are smaller than riskier investments.

A few MPT tenets might not appear stable if examined closely. For instance, assuming that financial markets are efficient in cycles of market volatility seems counterintuitive to empirical evidence. Getting engrossed in the rush and excitement of a bull market or a hot asset class is easy, causing many to chase after what looks like a “sure thing.” Investing using the MPT method involves examining historical data that may overlook recent market changes, potentially impacting a certain asset class or investment.

Behavioral Theory

Whereas MPT assumes that the stock market and investors are rational, behavioral finance theory examines investing through a more human lens. Behavioral economics was developed in the 1970s and is based on sociologists’ and psychologists’ assertions that humans exercise less than rational decision-making. This investing framework explores people’s actions and how they are most likely to respond in given scenarios.2

Behavioral finance theory accepts that people are unable to separate their decisions from their emotional thoughts and biases. This explains why someone might hold onto a losing asset, especially if a strong emotional feeling exists. For example, if you were gifted a stock as part of an inheritance, releasing the stock may be difficult despite its poor performance. The desire to belong and “follow the herd” is another reason that investors might feel the pain of loss from not engaging in a bull market or a certain hot investment. Behavioral finance theory also sees markets as irrational and prone to investors’ whims. If you have lived through one—or several—market bubbles and busts, this idea does not seem too far-fetched.

While behavioral finance theory can tell you a lot about yourself and your personal investing strategy, it cannot predict the markets. Although the theory may predict how you will handle the rollercoaster ride of investing, its helpfulness as a solid investment strategy remains uncertain.

Combining MPT and Behavioral Theory

Rather than viewing these two strategies as separate theories, both points of view and ideas can work together to help you become a better investor. All investment theories and styles have their pros and cons, so determining which methods work best is key. You should speak with your financial advisor to ensure that you understand each other’s investment strategies, challenge your own cognitive biases, and become a more rational investor. Answering a few questions on how you operate may offer some insight into what type of investor you are and the best methods to suit your personality.

Monthly Market Insights

Stocks were mixed in May as a powerful rally in the final week of trading helped recoup losses from earlier in the month. The Dow Jones Industrial Average picked up 0.04 percent, while the Standard & Poor’s 500 Index added 0.01 percent. The Nasdaq Composite fell 2.05 percent.1

It’s All About the Fed

The month began on a solid note as stocks rallied following the Fed’s announcement of a 50-basis-point hike in the federal funds rate. The market was relieved to hear comments from Fed Chair Jerome Powell, who said that a 75-basis-point increase was not actively being considered.

This rally lost momentum as investors reassessed the Fed’s commitment to a tighter monetary policy and digested some economic news that fanned inflation fears.

Focus Moving from Inflation?

Over the course of the month, inflation concerns diminished slightly, relative to economic growth worries. Consumer price inflation data showed prices rising at a pace near 40- year highs, but markets responded well, perhaps because the pace of price increases was down from the previous month.2

Inflation fears were further soothed later in the month when the Personal Consumption Expenditures Price Index, the Fed’s preferred measure of inflation, rose at a slower rate than markets had expected.3

Mixed Signals on Economic Growth

Economic growth concerns moved to the forefront due, in part, to weak economic data out of China. Disappointing earnings from major U.S. retailers also heightened fears about domestic growth. But upbeat news from several mid-size and discount retailers suggested the American consumer remained healthy.

Fed Sparks Rally

The May 25 release of the Federal Open Market Committee (FOMC) meeting minutes ignited the sharp rally in stock prices.

To investors, the meeting minutes suggested that the Fed was unlikely to pursue a more aggressive tightening stance. Investor sentiment was also lifted by comments from Fed officials who indicated that rate hikes could take a pause after the expected June and July hikes.

Sector Scorecard

Industry sectors that managed to post gains in May included Communications Services (+1.9 percent), Energy (+16.03 percent), Financials (+2.78 percent), Health Care (+1.49 percent), Materials (+1.18 percent), and Utilities (+4.31 percent). The remaining sectors moved lower, with losses in Consumer Discretionary (-5.12 percent), Consumer Staples (-4.08 percent), Industrials (-0.46 percent), Real Estate (-5.11 percent), and Technology (-0.69 percent).4

What Investors May Be Talking About in June

The U.S. dollar has been strengthening against other currencies all year. The U.S. Dollar Currency Index, which tracks the dollar’s value against a basket of major international currencies, has risen about 8 percent since the start of the year.5

The value of the dollar is closely watched because roughly 40 percent of the aggregate earnings of S&P 500 companies come from overseas sales.6

A strong dollar helps U.S. shoppers buy imported products at lower prices, but it also makes U.S. exports more expensive to overseas customers, which may show up in second-half company results.

World Markets

World markets trended higher as China began to emerge from its COVID-19 lockdown.

The MSCI EAFE Index gained 1.45 percent in May.7

Major European markets mainly moved higher, with increases in Spain (+3.11 percent), Germany (+2.06 percent), and the U.K. (+0.84 percent). France’s CAC 40 lost 0.99 percent.8

Stocks in the Pacific Rim markets were mixed. Australia lost 3.01 percent while Japan picked up 1.61 percent.9

Indicators

Gross Domestic Product (GDP)

The second estimate of the first quarter’s GDP growth was revised lower, from an annualized -1.4 percent to -1.5 percent.10

Employment

Employers added 428,000 jobs in April, the 12th consecutive month of 400,000-plus job growth. The unemployment rate was unchanged at 3.6%. Average hourly earnings rose 5.5% year-over-year, although that remains below inflation over the same period.11

Retail Sales

Consumers continued to spend in April, with retail sales climbing 0.9 percent. Since retail sales are not adjusted for inflation, it’s difficult to say how much of this increase is attributable to higher prices versus higher demand.12

Industrial Production

Industrial output rose 1.1 percent in April—more than double Wall Street estimates.13

Housing

Housing starts slipped 0.2 percent, although they were higher year-over-year by 14.6 percent.14

Sales of existing homes fell to their slowest pace since the start of the COVID-19 pandemic, declining 5.9 percent from a year earlier (April 2021). Tight inventory, rising prices, and higher mortgage rates weighed on prospective buyers.15

New home sales slipped 16.6 percent from March 2022 levels and dropped 26.9 percent from April 2021 levels. There was a nine-month supply of new home inventory in March 2022. A six-month supply is considered balanced between buyer and seller.16

Consumer Price Index (CPI)

Prices of consumer goods rose 8.3 percent from a year ago, coming in slightly below last month’s pace but above consensus estimates. Excluding food and energy prices, core inflation jumped 6.2 percent.17

Durable Goods Orders

Orders for long-lasting goods rose 0.4 percent, led by non-defense aircraft and parts orders.18

The Fed

At its May FOMC meeting, the Federal Reserve raised interest rates by half a percentage point. The Fed governors also announced that they would begin to scale
back the Fed’s $9 trillion balance sheet by $95 billion per month.

In a post-meeting press conference, Fed Chair Jerome Powell also said that the FOMC was not actively considering a 75-basis-point hike, although there may be multiple 50-basis-point hikes in the coming months.19

By the Numbers: Surf’s Up

50 billion a year25

Amount surfing contributes to the international economy

3.1 billion26

Amount of annual sales of surfboards and accessories

1. WSJ.com, May 31, 2022
2. BLS.gov, May 11, 2022
3. BEA.gov, May 27, 2022
4. SectorSPDR.com, May 2022
5. CNBC.com, May 31, 2022
6. FactSet.com, May 6, 2022
7. MSCI.com, May 31, 2022
8. MSCI.com, May 31, 2022
9. MSCI.com, May 31, 2022
10. CNBC.com, May 26, 2022
11. WSJ.com, May 6, 2022
12. WSJ.com, May 17, 2022
13. MarketWatch.com, May 17, 2022
14. Finance.yahoo.com, May 18, 2022
15. CNBC.com, May 19, 2022
16. CNBC.com, May 24, 2022
17. CNBC, May 11, 2022
18. WSJ.com, May 25, 2022
19. CNBC.com, May 4, 2022
20. Surfertoday.com, 2021
21. Comfyliving.net, January 4, 2021
22. Comfyliving.net, January 4, 2021
23. Comfyliving.net, January 4, 2021
24. Comfyliving.net, January 4, 2021
25. Comfyliving.net, January 4, 2021
26. Comfyliving.net, January 4, 2021
27. Comfyliving.net, January 4, 2021
28. Comfyliving.net, January 4, 2021
29. Comfyliving.net, January 4, 2021
30. Comfyliving.net, January 4, 2021

Secret To Retirement Success: Get Out Of Your Own Way

There are plenty of external factors that often negatively influence our chances of having a successful retirement. But often, failure comes from within. On this episode, we’ll talk about some of the common ways people get in their own way when it comes to financial planning.

Yahoo Article: https://yhoo.it/3sI6isr

Week In Perspective: Inflation Takes Center Stage [16-May-22]

Updated: 16-May-2022

The Week on Wall Street

In a volatile trading week, stocks extended their losses as economic growth and inflation concerns soured investor sentiment.

The Dow Jones Industrial Average dropped 2.14%, while the Standard & Poor’s 500 lost 2.41%. The Nasdaq Composite index fell 2.80% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slumped 3.21%. ¹²³

A Turbulent Week

Inflation moved to center stage last week with the release of April’s Consumer Price Index (CPI) and the Producer Price Index. Both numbers came near their 40-year highs but were lower than March’s year over-year numbers. The results heightened investor anxiety about future Fed monetary tightening and its impact on economic growth.

In recent weeks, technology stocks have borne the brunt of the downdraft as investors lightened up on risk exposures, with some of the mega-cap tech names getting swept up in the selling pressure. Cooling import price increases buoyed spirits on Friday, helping spark a rally that reduced the week’s losses.

Inflation Stays Hot

Investors were greeted with a mixed CPI report, looking for signs that inflation may be cooling. Yearover-year costs rose 8.3%, slower than the previous month but faster than consensus estimates. Excluding food and energy, core inflation climbed 6.2%. Buried beneath the headline number was a 5.1% yearly increase in shelter costs, the most significant increase since 1991. Shelter costs account for one third of the CPI. 4

Inflation has been a weight on markets all year. Investors are concerned that the persistence of higher prices may tip the economy into recession as increased spending on essential needs crimps consumers’ spending power.

This Week: Key Economic Data

Tuesday: Retail Sales. Industrial Production.
Wednesday: Housing Starts.
Thursday: Existing Home Sales. Jobless Claims. Index of Leading Economic Indicators.

Source: Econoday, May 13, 2022 – The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

This Week: Companies Reporting Earnings

Tuesday: Walmart, Inc. (WMT), The Home Depot, Inc. (HD).
Wednesday: Cisco Systems, Inc. (CSCO), Target Corporation (TGT), Lowe’s Companies, Inc. (LOW), The TJX Companies, Inc. (TJX), Analog Devices, Inc. (ADI).
Thursday: Applied Materials, Inc. (AMAT), Palo Alto Networks, Inc. (PANW), Ross Stores, Inc. (ROST).
Friday: Deere & Company (DE).

Source: Zacks, May 13, 2022 – Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

Professional Focus

Since 2014, Kyle has helped pre-retirees reduce taxes, invest smarter, and retire on their terms. As MOKAN’s founder and principal advisor, he is our clients’ go-to partner for tax-efficient retirement planning and investment management. Whether he’s presenting to a room full of pre-retirees at a retirement workshop or visiting with clients one-on-one, his objective is to help others pursue their retirement goals in a way that supports their best interests.

Many of his clients previously worked with (what Kyle calls) “disguised financial advisors” who offered them a stack of statements, a diversified pie chart, hidden and confusing fee schedules—and no real plan. Kyle’s goal is to provide massive value to pre-retirees through comprehensive, tax-efficient retirement planning and investment management.

WHAT KYLE DOES DIFFERENTLY

Kyle believes the financial industry is structurally flawed, and consequently, pre-retirees are not properly educated or prepared for their transition into retirement. That’s why he takes a “K.I.S.S.” approach to planning—he makes everything as simple and straightforward as possible—meaning no surprises, no hidden fees, and no fancy jargon or investment terms.

PUBLICATIONS

Kyle has a distinct passion for retirement education, and from the start of his career, his objective has been to teach pre-retirees how to be proactive and take charge of their financial futures. In 2017, he founded Retire Ready Academy, an educational program that teaches pre-retirees and retirees about tax-efficient retirement planning, Social Security, and investment management. In 2020, he published his book, Retire Ready, and today he contributes regularly to Kiplinger and Rethinking 65.

THE KYLE NINE

Kyle lives in Overland Park with his beautiful (and incredibly patient) wife Amy and their three young children, Jovee, Jace, and Jordyn.
Kyle and Amy met while attending K-State but didn’t start dating until six years later when Amy was about to leave the country for two years.
Kyle’s dog Murphy once ate 24 chocolate-chip cookies in one sitting—and lived to tell the tale!
Kyle and Amy enjoy staying active and going to the gym together whenever possible. (Their biggest incentive? The gym’s free two-hour daycare.)
When thinking of a name for his first child, Kyle remembered a unique name from the Christmas movie, Elf—and now Jovee Hammerschmidt is the new head of the household.
Kyle has an incurable sweet tooth. He will never turn down a fresh batch of cookies or a trip to get ice cream.
Kyle is an avid Dallas Cowboys fan and tries to attend the Thanksgiving Day game every year. When he was 12, he had heart surgery in a Cowboys-sponsored hospital and got to visit the players.
His favorite date-night spots are Bristol and J. Gilbert’s.
Kyle’s favorite place in the world is his home.

eric

1. “An investment in knowledge pays the best interest.” — Benjamin Franklin

2. “In investing, what is comfortable is rarely profitable.” — Robert Arnott

3. “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” — Robert G. Allen

4. “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” — Robert Kiyosaki

5. “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” — Paul Samuelson

6. “With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future.” — Carlos Slim Helu

7. “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” — George Soros

8. “I don’t look to jump over seven-foot bars; I look around for one-foot bars that I can step over.” — Warren Buffett

9. “Invest for the long haul. Don’t get too greedy and don’t get too scared.” — Shelby M.C. Davis

10. “The intelligent investor is a realist who sells to optimists and buys from pessimists.” — Benjamin Graham

11. “Know what you own, and know why you own it.” – Peter Lynch

Modern Portfolio Theory (MPT)

Behavioral Theory

Combining MPT and Behavioral Theory

It’s All About the Fed

Focus Moving from Inflation?

Mixed Signals on Economic Growth

Fed Sparks Rally

Sector Scorecard

What Investors May Be Talking About in June

World Markets

Indicators

Gross Domestic Product (GDP)

Employment

Retail Sales

Industrial Production

Housing

Consumer Price Index (CPI)

Durable Goods Orders

The Fed

By the Numbers: Surf’s Up

50 billion a year25

3.1 billion26

The Week on Wall Street

A Turbulent Week

Inflation Stays Hot

This Week: Key Economic Data

This Week: Companies Reporting Earnings

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