 Myths in Stock Market Advice – Part 1
DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. Those of you who have been following my blog and articles for several months, know my reason for doing this is to share some of my findings in investing in the stock market. I want to help everyone to make good solid decisions when it comes to investing, and my first 40 articles have been tied to things that have worked for me or promising new things I am trying this year. The reality of the situation is that I can only share what I know to be the truth. I have been investing in the stock market for over 30 years. I believe 2022 has been the most challenging year in my life trying to make sense of what is happening in the market. I have written several articles about the market and whether it was wise to continue to invest currently. The article about dealing defensively with a Bear market is: https://lifecanbesimple.net/blog/defense-for-a-bear-market Should we continue to invest currently: https://lifecanbesimple.net/blog/should-we-keep-investing-now The one thing I encourage everyone to do is to read and study. Due to all the ups and downs and the market not behaving like prior years, I have probably learned more in 2022 than in any year of my life. But the main reason I have learned so much is that I have learned about so many things that DON’T WORK anymore. Also, I have read many, many investment articles and the 73 books that I have completed thus far in 2022. By applying the defensive strategies I mentioned in my earlier article, we have been able to finally show a profit in 4 out of 5 of our Roth IRAs. The S&P 500 is still down over 20% for the year. Considering how most of my IRAs were down over 10%, showing a 6.8% up at Schwab and 8.6% up at Vanguard testifies that the plan is working. Of the five accounts we have, these 2 are the ones with the most Dividend Growth Stocks and Dividend Growth ETFs. Time will tell how effective this plan is going to be. It takes several years of up and down markets to prove your strategies. But in the process of evolving with the market, I have learned a lot of things. I want to share many of the things I know to be myths or outright lies. This will be the first of many articles about various Myths I have discovered. MYTHS IN STOCK MARKET ADVICE Too many assumptions are being applied to the market using ‘Historical data’ to prove things will be ok. This month, I have been reading 3 books that have opened my eyes to many, many false assumptions that people are taking as fact in Stock Market advice. Some of the myths are spoken by so many people for so long that I have accepted some of them to be the truth. In the next few investment articles (perhaps the next 4 to 10), I will start explaining all the false things that are being put forth as truth that are clearly lies. I want to upfront recommend you read these next 3 books which have helped me identify some of the false things being taught today. The first book is “I Will Teach You to Be Rich” by Ramit Sethi. This book not only teaches about the false things being promoted as truth, but he gives great advice on how to manage your money and how to put your investments into ‘automatic mode.’ The second one is by a Certified Financial Planner who worked for one of the larger investment companies. He has made me realize so many errors in my investment beliefs. This book's name is: “Stop Investing Like They Tell You” by Stephen Spicer. I read this third one a long time ago, and it is not tied to just the lies being put forth, but it does cover several. The name of this book is “A Random Walk Down Wall Street” by Burton Malkiel. These upcoming articles on Myths in Stock Market Advice will rely heavily on the findings of the first two books, some on the third book, and many things I have learned on my own over this past year. One of the reasons that people make bad decisions in the stock market is due to FOMO and Herd Mentality. FOMO means the Fear of Missing Out. I wrote a whole article on how many people are so wrapped up in the Fear of Missing Out. https://lifecanbesimple.net/blog/jomo-versus-fomo People think that the stock market is easy money. And Herd Mentality says that if everyone else is doing it, I must get involved too. Don’t worry about whether it makes sense. Just take the first bit of advice you hear and buy it. This is very very wrong. Every decision we make must be based on facts and part of a determined plan. Just because someone says something is a good buy, we should not rush out and purchase it without considerable study. Sometimes the media is responsible for being vague if not misleading. Ramit Sethi mentions in his book that the media has accurately predicted 27 of the last 2 recessions. *smile* Don’t believe everything you hear or read. This next myth has had me and many others believe a lie. Even Dave Ramsey, the noted Radio Financial Advisor, and author has put forth this as fact also. Have you not heard that just continue to invest no matter what the market is doing, as the S&P 500 has gone up an average of 12% for the last 50 years? Well, that makes it sound pretty good does it not? I mean if you have a 12% down, then you must be headed for a 13% up next year. Sounds good, but it is not factual. The only way this works is IF history repeats itself the same for 50 years, and you can leave your money alone for 50 years, then you should get an average of 12% for the 50 years. What is wrong with this picture?
So with all this false information, we need to adjust our thinking. Clearly, this makes a huge difference in how we should invest. Warren Buffet said that in the Stock Market, the Number 1 rule is to never lose any money. And Rule Number 2 is to never forget Rule Number 1. This new rule is going to be my main focus. In our second installation on Myths, we will cover how a 25% loss is never regained by a 25% up in the market. Your dollar basis is now smaller, so it takes up to a 50% increase to offset that 25% loss. How many times have you ever had a return above 20% in the market? I think perhaps I have had it happen 2 times in 30 years. So we need to preserve our money most of all. With this new knowledge, how good does that 9.62% we got out of those earlier I-Bonds we bought in early 2022? The I-Bond has dropped to 6.77%, but that is still a great return. I am purchasing more of those every week. Read about I-Bonds at: https://lifecanbesimple.net/blog/best-investment-for-end-of-2022 So to preserve our capital, we need to use our brains. I am reading a book co-written by Zig Ziglar’s son John Ziglar. It is on Hoopla Digital to read for free. The name of it is “Master Successful Personal Habits”. John says that Zig Ziglar used to say that every day of the year, some people are investing wisely and making good money while others are going broke. It is truly in the mindset and knowing WHAT we are doing. You can’t change everything, but we can change ourselves. What goes on between your ears is what makes all the difference. According to Zig Ziglar, many people suffer from POLM Disease. POLM stands for: P – Poor L – Little O – Ole M – Me Are you suffering from a PLOM pity party? The key to success is to learn from our mistakes and errors. Many have pity parties but never address their failures. 75% of the top 300 World Leaders in the past century were either raised in poverty or have had a serious Physical Deformity. This did not hold these leaders back. It’s not what happens to you it is how you handle things that makes the difference. There is no limit on what you can do internally when you set your mind to it. But it takes effort to study and learn. We need to stop believing myths and being fooled by marketing strategies. There is a pyramid scheme that effectively gets people to keep buying more and more making the greater fool of the latest purchasers. Just because someone else made a huge amount of money on Amazon in the early years does not mean it will work at its inflated price today. A Few More Myths: Putnam investments studied the S&P 500. Every 15 years, it has averaged only 7.7% overall, not the current proposed rate of 10 to 12% which most people claim. Many financial experts sometimes, many times, promote stocks in companies that have poor performance. In the book “The Smartest Investment Book You Will Ever Read”, Daniel Solon points out that financial predicting organizations like Morningstar continue to give thumbs up on ratings to companies that crater and file bankruptcy. 47 of 50 advisory firms continued to advise investors to “buy” or “hold” companies right up to their filing for bankruptcy. 12 of 19 still predicted to buy those companies while in bankruptcy. So who can you listen to? It is not mainstream media or people selling investment advice. In our next article, I will tell you how so many experts are accurately predicting the next big stock. It will shock you how easily the public is tricked. So take my findings and learn to make better decisions. Keep reading and studying on your own. If you are a serious investor, be sure to read those 3 books I mentioned. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops
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 The Soul of A Team – Tony Dungy
DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. The Soul Of A Team by Tony Dungy is a book about teamwork. If you are a football fan, you probably are familiar with Coach Dungy. He was a player in the 70s on the great Pittsburgh Steelers teams coached by Chuck Noll that won 4 Super Bowls in 4 appearances. He later played for the San Francisco 49ers also. He began his coaching career at Pittsburgh, followed by stints in Kansas City, Minnesota, Tampa Bay, and finally Indianapolis. His Indianapolis Colts won the Super Bowl in 2007. Currently Tony Dungy is an author and a broadcast analyst for NBC Sunday Night Football. This book of course centers around football and what it takes to win in a competitive environment. But the rules that govern how to win in football are true for businesses, churches, and even in your personal life. Some super concepts are presented in this book. WHAT I LEARNED FROM THE SOUL OF A TEAM It takes organized teamwork to be great. Coach Dungy has seen a lot of great things in his career. Selfless acts of courage, compassion, and moments of kindness. Working in harmony with so many people with faith and integrity allowed Tony and those he worked with to change their worlds in the process. The number 1 thing to be successful in life is to have great teamwork. People who think they can do it all on their own find out that they truly need others. Coach Dungy’s faith in the Lord is exemplified throughout the book. As I read this book, it showed clear similarities to Winners Never Cheat by Jon M. Huntsman. You can read my review of that book at: https://lifecanbesimple.net/blog/book-review-winners-never-cheat-jon-m-huntsman Coach Dungy points out that talent alone is not enough. Talent can only take you so far, and without teamwork, you will not be successful for an extended period of time. It takes faith, attitude, and hard work to rise to the top. Teamwork is what will keep you going in the right direction to accomplish greater goals. Tony Dungy shows in the book that people with great talent may excel for a time, but it takes teamwork to reach the top and remain there. Examples of this were given in the book including John Wooten, the great UCLA Basketball coach, Coach Chuck Noll, Pittsburgh Steelers coach, and Bill Belichick, New England Patriots coach who has taken 7 teams to the Super Bowl. The main story in the book is about the imaginary NFL team of the Orlando Raptors and the trials and problems they faced. I will not deal with much of the detail about that but will leave that story for your reading enjoyment. In summary, the team was in its third year of existence and had never made the playoffs. The owner was ready to throw out the whole coaching staff, management, and team members and totally start over. Coaches, players, and management were truly at odds with one another and were not on the same page with teamwork goals. The owner was even considering moving the team from Orlando to Los Angeles which put him at odds with the community. The head coach, offensive coordinator, defensive coordinator, and special teams coach all had their own goals unique to their units. Even the General Manager was conflicted and not on board with a team concept. In the book, Coach Dungy is hired to come in and assess things as a consultant. It is very entertaining and eye-opening. He gets the coaches, players, owner, and management on the same page by explaining that no team can be successful unless it has SOUL. SOUL is an acronym that means the following: S stands for Selflessness – putting your own individual goals aside for the sake of the team. O stands for ownership. You take ownership of your actions. Everyone’s role is significant. U stands for unity. To have any chance of winning, everyone must work with a united philosophy with everyone working toward the same goals. L stands for having a Larger purpose. Doing more than just leaving a Legacy, but doing something larger than just winning games. Building a team for the future and the fans. That way everyone wins. The whole book revolves around the SOUL of the team. So many issues came up, but each time, Coach Dungy turned them back to one of the 4 parts making up the SOUL of the team. The book closes by asking a lot of questions helping you to seek your own personal “soul”. So these teachings can go for finding the Soul of a team, but it can be about your business or even your personal life. Would I recommend this book? ABSOLUTELY. It is an encouragement to anyone seeking to accomplish success in their business or their lives. If you read this book and you will be blessed. Surprisingly, Tony Dungy has several books that he has written. I believe all of them can be found for free on Hoopla Digital. Read the following article about how to read books inexpensively. https://lifecanbesimple.net/blog/minimalism-how-to-save-money-reading-books List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops  FAILURE DUE TO LACK OF PLANNING
DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. When it comes to investing, there is no substitute for having a clear and concise plan. A plan followed by actionable steps leads to success. In life, we have so many reasons to delay our starting to invest. We may think that we simply do not have any extra money to invest. There are always unexpected expenses that will give you an excuse to wait until next week or next month. Thinking like this is a sure way to never get started. “He who fails to plan is planning to fail” according to Winston Churchill. Even a minimal plan with minor amounts of savings is a plan to get off to a good start. The number one regret I hear from investors is that they wish they had started investing sooner. I know that is true in my own life. I started investing in my 20’s but failed to be consistent year after year. And then life happened. We raised three kids, and it wasn’t until I was in my 50’s that I got a serious plan of action in place. Since then, I have consistently invested monthly. In his book Personal Finance, Matthew Collins states that “A plan without action is just a dream.” Action is required on your part. And your first action is to get started. Maybe just $10 a month, but start and be consistent. Once you see some returns, you will find a way to increase your investing amount. Investing is not all easy. Andrew Carnegie once said “Anything worth having in life is worth working for. “ So we must make up our minds to get started, and then come up with a reasonable Investment Plan. I can not over emphasize the importance of starting now while you are young. The book I am currently reading is “I Will Make You Rich” by Ramit Sethi. In his book, he gives an excellent example of two people, one who started at age 35 and the other who started at age 45. Smart Sally sets up an investment account with $200 a month and only invests for 10 years. Dumb Dan waits until he is 45, and he puts in $200 a month for 20 years. Who has the most money based on a conservative return of 8% at the age of 65? Smart Sally, having only 10 years of monthly investments has $181,469. Dumb Dan invests $200 a month for 20 years, but because he started late, his balance at age 65 is only $118,589. He invested twice as long, but is $60,000 less because he started late. Think the huge difference if the monthly amounts had been $500 monthly which anyone with a yearly income of $30,000 or more could afford with a little discipline. Now starting late is better than never, but see my point. START NOW. Time is on your side when you invest when you are young. Time is not on your side after you pass the age of 50. Don’t let me hold you back if you are over 50. It is much, much better to get started now than to never start. In this Ramit Sethi book, he goes over dozens of excuses why people do not invest. Many have to do with the claim they don’t have the money, or it is someone else’s fault. It is not someone else’s problem. Ramit Sethi lists several counter cultural excuses: LOL! Invest? I can’t even save enough for a pizza. Maybe if baby boomers hadn’t ruined it for all of us.. I have social anxiety so I can’t do that. You know who’s the real victim here? Me. I’m offended at you being offended. And at the stupidity of this entire victim culture. I refuse to play into the theatrics of how you can’t afford to save even $20 a month. We play the cards we’re dealt. I believe in focusing on what I can control. I love Ramit’s in your face approach. So many today blame someone else when the issue is really ourselves. It is your problem. As Dave Ramsey has said over and over, the main problem is the guy in the mirror. Knowing what to do is 20% of the equation, doing it is the 80%. Once you get started, it will be easier. I know. It was hard for me to get disciplined and consistent. We are creatures of habit. I will close this article with a little poem I read. Sow an act and you Reap a habit. Sow a habit and you Reap a character. Sow a Character and You reap a destiny. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops  Winners Never Cheat by Jon M. Huntsman
DISCLAIMER - I am not a Financial Advisor and do not work for any Brokerage Firm. The opinions given are my own and are not to be used as professional advice. These are my findings and can hopefully help you to make informed decisions on investing. Consult a Broker or Lawyer before making any investment. Winners Never Cheat By Jon M. Huntman is a great great book. I am still so happy this one was recommended to me by Patrick Bet-David. If you think old style morals and living a principled life is no longer happening, you definitely need to read this book. Winners Never Cheat is a super book in regards to business success, and I would rate this the best book I have read on business success. For years I have lived a principled life and God has greatly blessed me. The Huntsman Brothers are proof again that great things await those that live right. This book is the 68th book I have read in the year 2022. I started reading only about investments, then branched out into business success. This led me to study about Mindset and Habits. All of these things interweave together in life. To be successful in business (or life) requires discipline and the right mindset. Jon M. Huntsman ws trained as a child to have great discipline. Personally, I had never heard of Jon Huntsman before reading this book. It was recommended in the book Your Next Five Moves which I reviewed below: https://lifecanbesimple.net/blog/your-next-five-moves-by-patrick-bet-david WHAT I LEARNED FROM WINNERS NEVER CHEAT. Jon Huntsman and his brother started Huntsman Chemicals in 1970 as a family run business. The company has grown and evolved into a 2 billion dollar a year revenue successful corporation. Huntsman Chemicals have made many products including the first plastic egg container, plastic forks and spoons, and the original Big Mac container. Through the years, they have worked dozens of business deals ranging into hundreds of millions of dollars using a simple handshake to close the deal. They consider the Huntsman Cancer Institute as one of their greatest philanthropic accomplishments. Jon Huntsman believes one day that they will find a cure for cancer. Many of Jon’s family members died of cancer, and he has overcome 3 bouts of cancer in his life. This book is much more than a story about running a business successfully. The original book was published in 2004 but this revision was published in 2007 when the housing crisis and other issues seemed to make traditional values no longer in vogue. The Huntsman Brothers believe to reap an abundant harvest can only be done by being responsible, never cheating, or using any fraudulent behavior. Jon Huntsman states that more is learned in times of adversity than in good times. Prosperous times never mean that a person will continue to do right. Whatever our lot, we must have a fixed code of ethics to adhere to in both good and bad times. Always stand upright regardless of the consequences. They believe all we really need to be successful we learned as children in the sandbox. Fair play and being kind one to another is what life is all about. Treating others with respect and making decisions without having a room full of lawyers looking for contract loopholes. Always be honest and stay far from greed or dishonesty. No matter our background, each of us really knows in our hearts what is right and what is wrong. There is no place in business (or in our personal lives) to look for gray areas that the lawyers live to promote. Huntsman Business Standards Tests
Character is most determined by a person’s integrity and courage. Your reputation is how others perceive you. Character is how you act when no one is watching. Jon Huntsman makes a point to never lie or mislead in business negotiations. He is a tough negotiator, which is fine, but do the business deals honestly and above board. Keep both hands on the table with your sleeves rolled up. Three R’s of Leadership
He quotes Andrew Jackson who once said: One man with courage makes a majority. No matter what, always keep your word. To do this takes great resolve. In selecting advisors, be extra cautious. Be sure they share your core values and are not wrapped up in acquiring wealth. Money should never be your main focus. Be sure in tough times that your advisors will default to higher ground when in times of stress. Show graciousness to competitors, customers, and employees. Showing respect never goes out of style. Whatever successes we receive in life we should give back. Jon Huntsman received a scholarship to go to Wharton College of Business. This gave him his start, and since gaining success, he has given hundreds of scholarships to deserving young men and women. He believes in philanthropy so much that when the business has been slow, he has borrowed money to continue to fund his charitable giving. When you make a promise, don’t break it is his philosophy. Take your values to work and never allow a conflict between making a profit and adhering to your life principles of decency and fairness. At the end of the book, he lists some F’s to practice and put first. Family Faith Fortitude Fairness Fidelity Friendship. On the wall of his friend and doctor John Andrew Holmes is a plaque. It says: No exercise is better for the the human heart than reaching down and lifting up another. The Huntsman Brothers have lived a life of reaching down and helping people all around the world. Is this book worth reading? For sure it is. One of the best books on business and life I have ever read. It will really inspire you to live a life of character and to never compromise your core values. Winners Never Cheat. List of All Investment Articles https://lifecanbesimple.net/investments.html List of All Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net http://www.InternetDirect.us Internet Direct Laptops  Minimalism – Using Credit Cards One of the things I am asked often is should people who are minimalists use credit cards. I think we can expand that to ask if anyone should use credit cards? It truly is a personal decision, but there are certainly pros and cons to using them. I think using a debit card is absolutely okay It is safe and has insurance on it like a credit card. And with it, like cash, you must have the money in your account to pay for the item. I have debit cards with two credit unions here locally, and both pay Kasasa rewards. One of them pays 4% on your first $250 of expenses monthly as long as you use the Debit Card at least 12 times for a total of $250. So each month I receive $10 as a reward. The other credit union pays 3% on up to $400, but the rules are slightly different. Each debit transaction must be $10 or more, and there must be a total of 10 transactions for $400 or more. So each month I receive $12 in both my personal and business accounts as I use two different debit cards and follow the rules. So monthly I receive a total from both credit unions $34 of interest by spending a little over $1000. Now if you did not have those expenses to begin with, it would be stupid to spend money to receive the interest. You could just save $34 and spend nothing. However, these are expenses we have for buying groceries, household items, fuel, and gardening expenses. Before going any further on the use of credit cards, I want to take this opportunity to give a positive thumbs up on Dave Ramsey’s book, Total Money Makeover.  Total Money Makeover By Dave Ramsey 3 years ago, my wife and I took a course on getting out of debt at one of our Credit Unions, and then followed his 7 Baby Steps to Debt Freedom. We were free of credit card debt in about 14 months. His plan works for everyone, and I needed his cold turkey approach to get debt free. If you have issues controlling debt, I recommend you follow his simple easy-to-follow steps. The first two steps are super simple. Put $1000 in an easy to get to Emergency Fund (like a Savings or High Yield Checking Account). Then you use the debt snowball to pay off all your non-mortgage debt such as credit cards, car loans, student loans, etc. Dave Ramsey is a proponent of never using credit cards. And I have no issue if you wish to use his method. His method is safe. You eventually over time put six months of salary into your emergency fund and never use anything but cash to pay for your items. He has no issue using Debit Cards. If you can say yes to these next questions, it could be that you can live easily without using credit cards.
If you can say YES to all three of those questions, I would just rock on without any credit card use. Why borrow and take a chance on developing a bad habit? Because I misused credit in my younger years, my wife and I have a rule. If we ever fail to pay off every credit card in full each month, then we stop using them. If you pay them off monthly, you pay Zero interest for the whole year. If you are not in the heavenly mode listed with three yes answers, you probably are like 90% of Americans. It Is crucial to not try and do my credit card recommendations until you get rid of all non-mortgage debt. Read Dave Ramsey’s book and follow his rules. I tried for 7 years to get debt free and failed. Once I went to his plan, we were out in 14 months and have since paid off our home mortgage. It is the best feeling ever to know you own your own home. So if you are debt free or in a good position to pay off any credit card debt each month, I am going to give you a few cards with the pros/cons of each one. I have used all of these and most are still open today. Discover Rewards PROS:
Citibank Custom Cash Rewards PROS:
FIDELITY REWARDS PROS:
SAMS CLUB PLUS MEMBER PROS:
AMAZON STORE CARD PROS:
PENFED CREDIT UNION PLATINUM REWARDS PROS:
WALMART VISA PROS:
I have not researched the new WALMART Plus card, but I understand that it may pay up to 10% cash back on fuel. Again, to get it requires a yearly charge of like $85. It does include free grocery delivery I believe. I hope this gives you an idea of what is available in the Credit Card market. I will close with a reminder from Dave Ramsey who said “I have never met a millionaire who got rich off Discover or Visa cashback points.” Good thought to consider. I pay these cards off every month and only use them to purchase what are our basic needs for the month. Don’t ever carry credit card balances with high-interest rates. If you are having trouble with credit, ignore all the credit card recommendations and read Dave Ramsey’s book listed above. You can check it out for free at most libraries. Total Money Makeover By Dave Ramsey List of All Investment Articles https://lifecanbesimple.net/investments.html List of all Minimalism Articles https://lifecanbesimple.net/minimalism.html www.lifecanbesimple.net www.InternetDirect.us Internet Direct Laptops – www.ebay.com/str/internetdirectlaptops Direct Laptops – www.ebay.com/str/internetdirectlaptops |
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