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Be Wiser - With Your Emotions & Your Money 

Dear Friend,Catherine Head Shot
    

The first quarter ended on a barely positive note with the Dow up .8% and the S&P 500 up 1.5% (without dividends).

The market is now starting to exhibit what I would consider normal volatility now that QE has ended.   And while everyone was hopeful that at this point the economy would be solid, what we continue to see instead are pockets of weakness and strength. 

This means more uncertainty for the financial markets and, with emotions likely triggered by the expected ups and downs this year, it will be difficult forecasting short-term trends. 

In these types of markets we want to step out of the chaos and keep our focus long=term.  With this in mind today's newsletter takes a look at the correlation between our emotions and our money.

 

As always, we look forward to hearing from you if you have any questions.

 

Happy spring!


Warm regards, 

 Signature

Catherine Maniscalco Avery

 

The backbone of CAIM is to employ a classic long term investment strategy including dividend paying stocks. CAIM is an independent, women owned investment management firm specializing in managing investment portfolios for women and baby boomers.

203.966.2712  p
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April 13, 2015|  Issue No. 61
In This Issue
Be Wiser - With Emotions & Your Money
Dividend Champs 1/15
Estate Tax & Gifting
Quick Links
Find Out More
Call me at 203.966.2712
or visit www.caimllc.com.

 


     Be Wiser - With Your Emotions and Your Money    

The topic of money can be an emotional one.   According to Liz Weston, in a February 2015 online article titled; "From Guilt to Sadness - How Emotions Affect Money Habits," recent research shows that strong emotions like anger, sadness and guilt may play a bigger role than you think in peoples' financial decision-making.

Feeling Blue?

Research out of Harvard University shows that when people are feeling sad, it actually increases the amount of money they're willing to spend and makes them impatient.  It's the same feeling that can galvanize investors to grab a smaller benefit now, rather than wait for a larger future benefit.

At CAIM we try to counter that type of behavior by encouraging our clients to focus on the long-term and stick with their investments.

 

Hot under the collar?

When people are angry it drives them to take bigger risks, then dig in their heels when questioned and refuse to see their mistake, according to Weston.

"Investors do need to take some risks to grow their portfolios, and being stubborn can help you stick to budget and investment goals," she offers. Problems arise when people stick with a losing investment too long, or forfeit their retirement through speculative stocks.

At CAIM one of our essential guiding principles helps to ameliorate these anger-based types of decisions.   That is, adjust your portfolio based on your own changing investment goals, NOT market changes or 'hot' stocks.

 

Fear based?

A certain amount of fear is healthy, says Weston.   Fear of becoming destitute may encourage us to save, or to purchase life insurance for family members. Taken too far, however, being afraid makes people exaggerate risks and second-guess themselves.  

This is where a knowledgeable and experienced financial advisor plays a critical role, by being available to discuss client concerns and help them stay the course.

 

Guilt ridden?

At best guilt leads to altruism and sharing our abundance with others, according to Weston. At worst a person can end up spending on others what they need for themselves.

Once again a seasoned financial advisor can help in this type of situation, by working with clients to set limits in the form of budgets to guard against this emotion's downside.

 

Gratitude is the Attitude (to have)

Gratitude is a leveling emotion. Counting your blessings has many upsides that include reducing excessive economic impatience, according to Weston.   Feeling grateful also offsets any discounting of future rewards.   Most of all it makes you feel good, right here and right now.

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Dividend Champs 1st Quarter 2015

We have barely made it through the first quarter of 2015 and dividend increases have already been abundant for the companies we own ... Read more 

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Estate Tax & Lifetime Gifting by Rande Spiegelman 

Spreading gifts throughout your lifetime is a great strategy to help reduce estate taxes. Just be sure to ...Read more
 
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©Copyright 2015, CAIM LLC

Disclaimer: NO CONTENT PUBLISHED AS PART OF THE CAIM LLC NEWSLETTER CONSTITUTES A RECOMMENDATION THAT ANY PARTICULAR INVESTMENT, SECURITY, PORTFOLIO OF SECURITIES, TRANSACTION OR INVESTMENT STRATEGY IS SUITABLE FOR ANY SPECIFIC PERSON.  TO THE EXTENT ANY OF THE CONTENT PUBLISHED AS PART OF THE BLOG MAY BE DEEMED TO BE INVESTMENT ADVICE, SUCH INFORMATION IS IMPERSONAL AND MAY NOT NECESSARILY MEET THE OBJECTIVES OR NEEDS OF ANY SPECIFIC INDIVIDUAL OR ACCOUNT, OR BE SUITABLE ADVICE FOR ANY PARTICULAR READER.  EACH READER AGREES AND ACKNOWLEDGES THAT ANY SPECIFIC ADVICE OR INVESTMENT DISCUSSED IN THE BLOG MUST BE INDEPENDENTLY EVALUATED BY THE READER AND HIS OR HER ADVISER IN VIEW OF THE READER'S INVESTMENT NEEDS AND OBJECTIVES.
 

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