Direct questions have to be asked in this market. Is anybody asking them? I think not. Everyone is worried. Fear is everywhere.
Let me ask a few direct questions.
Am I losing all of my money in the stock market?
How can I plan for my retirement, with interest rates so low?
I’m retired and spending my capital. How long do we have in this market environment before our money runs out?
What should I do with my money?
Is this what your thinking? You are not alone. Can you have this conversation with anyone? Are there any conversations anywhere that are discussing these themes? Can’t anyone tell me that it’s going to be alright?
If I may, I can chip away at some of these questions and maybe get you on the right path with some answers.
Mathematics, kicking in the Rational Brain
I have constructed a world where security prices do conform, believe it or not, to structural equations. The market may not make sense to those who are making their own observations however the market and the equities that trade in it, trade within structural boundaries. When viewed with this filter, the model price chart filter, my anxiety settles down – see my blog “How Model Price Charts ease my market anxiety?
Check your portfolio positions, with the Facebook Model Price chart database. I have included over 2000 securities in this database. Look them up and see what is going on with the companies you own. Are your security prices breaking down through the EBV zones? What EBV zone is traditional support for this security? What is the calculated model price? Remember this is math, no emotion. No Buy/Hold recommendations from investment banks. (I would say, “Sell”, but there aren’t any? (Ha Ha) If your confused on what you are seeing ask a question or two on Facebook. Maybe someone else has the same question. Easy.
I know it’s hard to believe but there are stocks working in this market environment and making new highs. Also by reading this blog, even though I don’t recommend specific securities I do highlight some interesting investment opportunities for anyone to consider.
Also, review your security positions on a daily if not weekly basis. This is why we do a computer run everyday. Inputs, such as earnings, balance sheets and equity prices are changing daily. With a blink of an eye, by looking at a specific Model Price chart you can assess important market information without all the propaganda that goes along with financial news reporting.
Hopefully, some of our model price work can help chip away at some of your fears and starts to answer some of your concerns using only math. I have found over the years impassioned individuals can be biased over certain securities even when these same securities are trending lower. When these securities are viewed with model price math these biases seem to dissipate.
My worst fear, and probably yours is running out of money sometime in our lifetime. So what answers do I have for this question? Two actually.
Running out of money is a function of original capital, returns and spending. Put your unique fact set into an excel spreadsheet and see what happens. Do some research into C.P.P. and Old Age Security, to see what the amounts are and when are you eligible? At what time does your RRSP convert to a RRIF and model out cash flows? (This is obviously directed at my Canadian audience. U.S. readers will consider 401K’s, Social Security and other plans.)
Don’t want to do your own calculations?
Find a Financial Advisor. Just like all professions there is a spectrum of competent financial advisors. A good one is worth their weight in gold! Yes, even I have one to keep me on track. I was at a financial conference last week. The speaker asked whether anyone used a financial planner for his or her financial affairs. I raised my hand, as did the rest of the room. Then he asked, of those who raised their hands who would recommend their financial advisor to their friends or relatives, including me only one other person raised their hand. Ask this question of yourself? Maybe this is causing some of your fear and anxiety. Do you have the right financial planner to get you over this very difficult time? Maybe a change is necessary.
The last question, and the hardest question of all is, “Will I be alright?” You can answer some of this by mathematics. Both at the security level, through the model price charts and your personal cash flows through an excel spreadsheet calculation or with the help of your financial advisor. You can put in place considerable rational framework which may eliminate a good portion of your anxiety however probably won’t eliminate all of the irrational thoughts which may be kicking around in your head.
As far as a good night sleep, model price and my financial advisor help but I still wake up at times of stress and start the mathematical process all over again starting with looking at my model price charts. May seem like Groundhog Day, the movie however this is the market environment in which we live. This will change someday, as all market environments do; it’s just a matter of when, not if. We just have to make it over the other side of this very negative period.