election

Beware of the Three P’s: Panic, Politics and Performance Chasing

The Bird’s Eye View:

Today we’re talking about classic mistakes people make that can have long-term impacts on their retirement plan. Find out how to avoid the three P’s – panic, politics and performance chasing.

 

Your Guide:

We all want to avoid mistakes in retirement, but there are some classic ones you should look out for. On this episode of Your Retirement Elevated podcast with Scott Dougan, we’ll explain why you should watch out for the three P’s – panic, politics and performance chasing.

During the pandemic, there were some classic, behavioral mistakes people made. Market drops can be painful slides, but it’s important to remember that the market is not your portfolio. All of our clients are invested differently.

No matter how cool, calm and collected you think you are, the pandemic has caused some people to panic. That’s always the wrong response, as the market showed. It seemed dire, but it rebounded in many areas.

The second P to watch out for is politics. We don’t talk politics on this show, but we can talk about policy. Many responded to political fears during the election by liquidating their portfolios, but that was the wrong decision.

“When you let politics muddy your investment decisions, bad things can happen,” said Scott.

Finally, beware of performance chasing. Some people got out or stayed out of the market during the pandemic, but that was the wrong move. Remain true to your plan, even during chaos.

Listen to the full episode or use the timestamps below to find specific segments.

[1:39] Emotional decisions

[4:05] – Market drops

[8:32] – Panic

[12:35] – Politics

[19:33] – Performance chasing

Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.

 

Your Guide:

Home Insight About Scott

Scott Dougan, RFC, Investment Advisor – Contact

It Isn’t the Known Unknowns That Get You

The Bird’s Eye View:

We all deal with unknowns in our lives, but beware of the unknown unknowns. Those will get you, according to former Secretary of Defense Donald Rumsfeld.

 

Your Guide:

On this episode of Your Retirement Elevated podcast with Scott Dougan, we’re not discussing dollars and cents. We’re talking about the unknown in life.  

Former Secretary of Defense Donald Rumsfeld had an operating hypothesis that he was always going to be dealing with unknowns. He said the unknown breaks down into two categories – known unknowns and unknown unknowns. It isn’t the known unknowns that get you.

If we look back, one example of a known unknown would be Y2K. As the millennium approached, a problem in the coding of the world’s computer systems threatened to render them inoperable at midnight on Dec. 31, 1999. On the other side, Sept. 11 was an unknown unknown.

In 2020, investors have been faced with both a known unknown – the presidential election – and an unknown unknown – the Covid-19 pandemic.

So many people wanted to get out of the markets before the election, fearing the success of one candidate over another would plunge our nation into chaos. But that’s not rational thinking, it’s emotional.

“The markets have weathered the storm [in 2020]. It’s been choppy. It’s been uncomfortable. But they’ve continued to perform,” said Scott.

It’s best to stay the course and be goal-focused, planning-driven investors.

“When we get emotional and let our decision-making process get clouded, that’s where we can get hurt,” said Scott.

Listen to the full episode. Use the timestamps below to find specific segments.

[2:16] – Known unknowns

[4:37] – Unknown unknowns

[9:09] – The election and pandemic

[12:49] – Stay the course

[15:55] – Being emotional about your savings

Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.

 

Your Guide:

Home Insight About Scott

Scott Dougan, RFC, Investment Advisor – Contact

Love or Hate the Election, Leave Emotion Behind

The Bird’s Eye View:

No matter how you feel about the 2020 election, it’s best to leave emotion behind when dealing with your financial future. Scott Dougan explains how he handles retirement planning in election season. 

 

Your Guide:

Between the 2020 election and ongoing pandemic, many people are feeling tense. On this episode of Your Retirement Elevated podcast with Scott Dougan, recorded Nov. 12, 2020, we explain how to handle the uncertainty and stay calm when dealing with your financial future.

Our nation is polarized. Half the country is elated that Joe Biden appears to be headed to the White House, and the other half is upset. No matter who is the president, don’t make emotional, irrational decisions with your finances. Our nation has a system of checks and balances, and it’s not good to focus too much on one person.

“These gyrations we had in the market earlier this week, those are just blips. We need to focus on making sure our clients can have predictable, dependable income, not just for the next four years,” said Scott.

We had two prospective clients come in after Donald Trump was elected president in 2016. They were upset and fearful and said his presidency would be disastrous for the country. They asked whether they should move to all cash or invest in precious metals. We decided not to take those clients on, not because of their political beliefs but because of their fear.

“What is great about America is we want and hope for a better tomorrow, a bigger future,” said Scott. “Don’t be emotional about [elections] as much as possible. I think it’s a time to find more common ground.”

Every change gives us opportunity, and we are going to focus on how to maximize those opportunities. Look past the presidential election to a more long-term view.

“We’ve made very little changes in the way of investment policy leading up to the election,” said Scott. “There’s nothing to be knee jerk about.”

Could we make some investment changes moving forward, once we know who the president will be? Sure, that’s possible. But we need to leave the emotion behind.

Listen to the full episode. Use the timestamps below to find specific segments.

[0:51] – Dealing with uncertainty

[3:48] – Too much emphasis on one person

[5:58] – Clients upset about election outcome

[7:29] – What’s great about America

[9:20] – Every change gives us opportunity

[11:02] – How to define long-term

[15:05] – Model good behavior

Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.

 

Your Guide:

Home Insight About Scott

Scott Dougan, RFC, Investment Advisor – Contact

How Will the Election Affect Investments?

The Bird’s Eye View:

The election is upon us, and that brings up a lot of financial questions. We want to dedicate today’s show to answering some of those common queries.

 

Your Guide:

With the election coming soon, clients have been reaching out to us with questions about how it could affect their finances. On this episode of Your Retirement Elevated podcast with Scott Dougan, we’ll answer some of the most common questions.

This election cycle seems to be crazier and more contentious – and that’s on top of a pandemic and shutdown. Some of that craziness is due to social media and confirmation bias that feeds people information they already agree with.

It’s important to make rational, fact-based, logical decisions and not use emotion, misunderstanding and misinformation. Don’t put that into your decision-making process. Remember that it’s not what happens in the markets. It’s how we react, and it’s how we’re positioned to absorb what’s happening to us.

Elections do matter, and they can impact generations to come. So we should approach voting with the gravity it deserves. But we need to be careful to not allow short-term political emotions to alter a sound, long-term financial planning process.

Are there Election Day implications for your investments? Yes, in the short term there often are implications. There’s a lot of uncertainty, and markets hate uncertainty. We always expect short-term declines, but they will eventually stabilize.

We believe the possibility of a larger-than-normal decline in the next 12 months exists due to so much uncertainty from the election results and the stimulus effects. But we aim to use the short-term emotion of other people to create the biggest advantage possible to generate solid, long-term gains in a portfolio.

So, in some ways we’re actually hoping for a quick decline to give us bargain prices. We want to buy things that are on sale, and we do have a shopping list of things we look at.

Listen to the full episode to hear more about bogus info online and how it impacts investments. Use the timestamps below to find specific segments.

[1:18] – Confirmation bias

[5:42] – What does the election really mean for investments?

[6:34] – Are there Election Day implications for your investments?

[10:09] – Should we be worried about delayed election results?

[14:20] – Bogus info online

[16:00] – The media

[20:24] – Short-term versus long-term

[22:58] – What if you’re taking money from investments?

[24:58] – Final thoughts

Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.

 

Your Guide:

Home Insight About Scott

Scott Dougan, RFC, Investment Advisor – Contact

End-of-Year Tax Planning Guide

The Bird’s Eye View:

Consider this your end-of-year tax planning guide. Find out why tax planning is often a missing piece in people’s financial plans.   

 

Your Guide:

In our 19 years of financial planning, we have talked a lot about tax planning. It’s an important topic that more people should be familiar with. On this episode of Your Retirement Elevated podcast with Scott Dougan, we explain why tax planning is so important, how the election could affect taxes and much more.

Why tax planning is often a missing piece

Tax planning should always be top of mind, but it’s usually a big missing piece in people’s plans.

“You need to be proactive in your tax planning,” said Scott. “The IRS does not send out a helpful guide.”

Our job is to help you navigate what the rules are and help you take advantage of what’s available to you. We don’t do tax preparation, but we can help with tax planning and help you make changes to your financial situation to affect taxes.

Itemization vs. standard deduction

The Tax Cuts and Jobs Act roughly doubled the standard deduction. Since 2018, only about 10% of people have itemized their taxes. Most find it’s more beneficial to take the standard deduction.

If you itemize, keep your receipts, and your tax preparer can help you.

CPAs vs. financial planners

CPAs are historians. They collect information you give them about what happened the previous year and tell you what you owe or what refund you will get.

Financial planners can help you do tax planning and figure out things you can do to positively affect your taxes going forward.

Actions to consider before year-end

A few things to consider before the end of the year:

– Estimate what your taxable income will look like for 2020

– Research the notable tax changes for 2020

– Review your capital gains and losses

– Consider a Roth IRA conversion

Listen to the full episode to hear more about notable tax changes, how the election could affect taxes and more. Use the timestamps below to find specific segments.

[2:15] – Why tax planning is often a missing piece

[5:38] – Itemization vs. standard deduction

[7:48] – CPAs vs. financial planners

[11:00] – Actions to consider before year end

[15:29] – Making contributions next year

[17:22] – Notable tax changes

[20:42] – Other important tax considerations

[26:11] – How the election could affect taxes

[30:55] – Eliminating the step up in basis

Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.

 

Your Guide:

Home Insight About Scott

Scott Dougan, RFC, Investment Advisor – Contact

In Uncertain Times, Here’s How Your Financial Advisor Can Help

The Bird’s Eye View:

This year has been full of economic struggles and unknowns, but you shouldn’t have to face them alone. Find out how a financial advisor can help you navigate the uncertainty.

 

Your Guide:

The year 2020 will be remembered for a global pandemic and economic struggles and unknowns. When problems like that arise, you shouldn’t have to face them alone. On this episode of Your Retirement Elevated podcast with Scott Dougan, we explain how a financial advisor can help you navigate the uncertainty.

“Times can be tough. Times can be uncertain,” said Scott. “But if history repeats itself, which it does, we have cycles of life. We have cycles of business and economies and we will continue to grow forward, but it wont’ be without bumps.”

A financial advisor’s primary role is to prepare their clients for the truth. And the truth is uncertainty. We have educated guesses about what might happen, and we can prepare you for many different scenarios.

Our job is to help you make rational decisions, even if you think the sky is falling and the world is coming apart.

“It’s not what happens to you, it’s how you react,” said Scott. “I definitely agree that the economy can be sensitive, but I also want to point out that it can be resilient.”

Listen to the full episode or use the timestamps below to hear more about handling uncertainty and how a financial advisor can help.

[2:02] – The role of an advisor

[7:55] – Hoping for best, planning for worst

[9:40] – The battle between our ears

[12:58] – Handling uncertainty

[18:00] – Projecting forward

Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.

 

Your Guide:

Home Insight About Scott

Scott Dougan, RFC, Investment Advisor – Contact