Categories
Article Video

Conrad Siegel’s Tracy Burke, CFP® takes a look at what the market did over the last month, what we can expect moving forward, and what it means for you.

Categories
Article Video

Conrad Siegel’s Tracy Burke, CFP® takes a look at what the market did over the last month, what we can expect moving forward, and what it means for you.

Categories
Article Featured

Investing during an election year can be a source of anxiety for many investors. The potential for significant policy changes and the uncertainty surrounding election outcomes often lead to questions about how markets will react and what investors should do to prepare. Understanding historical trends and maintaining a disciplined approach can help alleviate some of these concerns.

Historical Market Performance During Election Years

Historically, markets have demonstrated resilience and even strength during election years. Since 1926, the S&P 500 index has averaged an annual return of just over 10%. Notably, during election years, this average return has been slightly higher at 11.6%. The year following an election also tends to perform well, with an average return of 10.7%. These figures suggest that while elections introduce a degree of uncertainty, markets often continue to perform robustly.

Volatility and Election Outcomes 

Contrary to what might be expected, historical data does not show a significant increase in market volatility during election years. Analyzing the standard deviation of the S&P 500, which measures market volatility, reveals that volatility is actually lower during election years compared to non-election years. The only period where increased volatility is evident is the month following the election. This suggests that while markets do react to election outcomes, the reaction is relatively short-lived.

Political Parties and Market Performance 

A common question is whether the market favors one political party over another. Historical data indicates that there is no clear pattern to suggest that markets perform better under Democratic or Republican presidencies. Various factors, including economic policies, global events, and broader economic conditions, have a more substantial impact on market performance than the political party in power.

Investor Behavior and Market Timing 

One of the most crucial points for investors to remember is the importance of staying invested and avoiding the temptation to time the market based on election outcomes. Trying to move investments in and out of the market in response to political events can be detrimental. Studies have shown that investors who attempt to time the market often end up underperforming due to selling low during downturns and buying high during recoveries.

Focus on Long-Term Goals and Asset Allocation 

Investors should focus on what they can control, such as their asset allocation and risk tolerance. Younger investors with a longer time horizon can afford to take on more risk, while those closer to retirement should consider reducing exposure to volatile assets like stocks. Ensuring a well-diversified portfolio that includes both domestic and international investments can also help mitigate risks. 

Elections undoubtedly introduce a layer of uncertainty into the market, but historical data suggests that maintaining a disciplined, long-term investment strategy is the best approach. By focusing on asset allocation, diversification, and staying invested, investors can navigate the volatility and continue to work towards their financial goals regardless of the political landscape. 

Categories
Article Video

Conrad Siegel’s Tracy Burke, CFP® takes a look at what the market did over the last month, what we can expect moving forward, and what it means for you.

Categories
Article Video

Our team got together to take a look back at the market in 2023 while looking ahead to 2024 and what investors might be able to expect.

Categories
Article Video

Conrad Siegel’s Tracy Burke, CFP®, ChFC® and Catherine Azeles, CFP®, RICP® share an overview of the investment world. Together, they take a look at what the market did during the last quarter, what we can expect moving forward, and what this all means for you.

Categories
Article Video

Conrad Siegel’s Tracy Burke, CFP®, ChFC® and Catherine Azeles, CFP®, RICP® share an overview of the investment world. Together, they take a look at what the market did during the last quarter, what we can expect moving forward, and what this all means for you.

Categories
Article Featured

For decades behavioral finance was largely an academic pursuit, more recently this body of knowledge has been recognized for its impact on investing. Daniel Kahneman and Richard Thaler have been awarded Nobel Prizes for their contribution to this field of research. What follows is behavioral finance in plain English. Knowing these mental blind spots might make you a better investor.

Legendary economist and investor Benjamin Graham said it best “The investor’s chief problem – and even his worst enemy – is likely to be himself.”

Your own behavioral biases are often the greatest threat to your financial well-being. As investors, we leap before we look. We stay when we should go. We cringe at the very risks that are expected to generate our greatest rewards.

Most of the behavioral biases that influence your investment decisions come from mental shortcuts we depend on to think more efficiently and act more effectively in our busy lives. Usually these short-cuts work well for us. They can be powerful allies when we encounter physical threats, or even when we’re simply trying to stay afloat in the sea of decisions we face every day. These same survival-driven instincts that are otherwise so helpful can turn problematic in investing.

Let’s take a look at these concepts…

Anchoring: Going Down With the Ship. Fixing on earlier references that don’t serve your best interests.
Real life scenario: I paid $11/share for this stock and now it’s only worth $9. I won’t sell it until I’ve broken even.

Confirmation: The “I Thought So” Bias. Seeking news that supports your beliefs and ignoring conflicting evidence.
Real life scenario: After forming initial reactions, we’ll ignore new facts and find false affirmations to justify our chosen course … even if it would be in our best financial interest to consider a change.

Familiarity Breeds Complacency. “Familiar” doesn’t always mean “safer” or “better.”
Real life scenario: By over concentrating in familiar assets, you decrease global diversification and increase your exposure to unnecessary market risks. This is very common when employees own a large stake in their employer’s stock.

Fear: “Get Me Out NOW!”. The panic we feel whenever the markets encounter a rough patch.
Real life scenario: While you may be well-served to run from a dangerous physical situation, doing the same with your investments might lock you into a loss without participating in the recovery.

Greed: Excitement Is an Investor’s Enemy. Fear of missing out, Chasing hot stocks, sectors, or markets, hoping to score larger-than-life returns.
Real life scenario: When you speculate, you can get burned in high-flying markets. Remember to focus on what really counts: managing risks, controlling costs, and sticking to the plan.

Loss Aversion: Avoiding Pain Is Even Better Than a Gain. We are hardwired to despise losing even more than we crave winning.
Real life scenario: We attempt to time the market by selling before it drops. Ultimately, market-timing is more likely to increase costs and decrease expected returns.

Overconfidence: Better Than Average? Everyone believes they’re above average. Clearly, not everyone can be correct.
Real life scenario: Overconfidence makes you believe you’ve got the rare luck or skill required to consistently “beat” the market, instead of patiently participating in its long-term returns. Slow and steady wins the race.

Sunk Cost: Throwing Good Money After Bad. It’s more painful to lose something if you’ve already invested time, energy, or money into it.
Real life scenario: The past is past. Don’t let sunk cost fallacy stop you from unloading an existing holding once it no longer belongs in your portfolio.

Don’t go it alone – your brain has a difficult time “seeing” its own biases. Having an objective advisor dedicated to serving your highest financial interests is among your strongest defense against all of these mental traps.

Categories
News

Harrisburg, PA – July 10, 2023 – Conrad Siegel, delivering comprehensive employee benefits and investment advisory services, recently announced that Catherine Azeles, CFP®, RICP®, CDFA® has been appointed a partner at the firm.

Azeles, an investment consultant, works within the firm’s Wealth Management division – the organization’s fastest growing line of business. She has worked at Conrad Siegel since 2018 and has played a key role in the firm’s growth during that time.

Azeles specializes in comprehensive financial planning, investment management, and retirement planning for local families. She has quickly grown her client base and will now move into a leadership position that not only focuses on serving clients but also shaping the future vision of the firm.

“We are very proud to welcome Catherine as a partner,” said Tracy Burke, Partner and Investment Consultant at Conrad Siegel. “From a technical perspective, Catherine is as good as it gets. She brings a tremendous amount of investment and financial expertise to our team. What really sets her apart is her care and compassion. It shines through in everything Catherine does. She cares about our clients, our team, and our community which perfectly aligns with our firm’s mission – making her the perfect fit to join our leadership.

Categories
Article Video

Let's see if we're a good fit

Contact our team to see if your situation matches our expertise

With your financial goals in mind, fit matters most. A 15-minute phone call will give us the chance to make sure your situation matches our expertise. Please provide some information and we will respond to you promptly.