Ode to Anderson

Forbes Magazine’s 2016 list of Best Cities for Young Professionals ranks Cincinnati a very respectable #15 in the nation, even among hot-spot regions like San Francisco, Silicon Valley and Denver. As a young professional, this is exciting confirmation of what I already knew. But as Cincinnatian’s know, each neighborhood here is its own organism and some areas are more attractive to young professionals than others.

When I was nearing graduation from Xavier University, many of my peers were clamoring for job offers in the popular and trendy Over-The-Rhine (OTR) neighborhood. OTR is charming with lots of character and is within easy walking distance of a multitude of unique restaurants, clubs, and bars that draw crowds of young professionals at lunchtime and after work. Other XU grads opted for jobs in the central business district at one of Cincinnati’s 10 Fortune 500 companies. I was an outlier (I prefer to think trendsetter) when I accepted a position in the suburbs, namely Anderson Township.

My decision to work in Anderson proved to be an excellent choice. On the surface, there are obvious positive attributes — beautiful parks, close proximity to highways, and a pleasing mix of city and rural life, to name a few. Once I started working here, though, I learned Anderson has even more to offer those who dig below the surface.

anderson-township

 

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4% Rule: Made to Be Broken?

A common concern among investors is running out of money in retirement. Combating this concern, the “4% rule” is widely presented as a simple way to help your money last. Created in 1994 by financial planner William Bengen, the 4% rule says if you withdraw 4% of your nest egg each year, adjusted annually for inflation, there is a 90% chance your money will last at least 30 years. Yet despite its notoriety, the 4% rule is not without issue.

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Long-Term Investor, Short-Term Attention Span

Society has an activity addiction. We constantly need to be entertained. So much so that the average human attention span is only 8.25 seconds – down from 12 seconds a decade ago and almost an entire second less than a goldfish’s, according to Statistic Brain. Undoubtedly, millennials bring this average down a bit. 77% of people aged 18-25 said if nothing is occupying their attention, they will grab their phone, compared to only 10% of those over age 65. Begrudgingly, I can attest to this. I’m currently working to complete my MBA degree through Ohio University, which is rewarding but includes a lot of paper writing. Although I’m thriving, I’ll admit if I had a nickel for every time I checked my phone, answered a text message or opened an off-topic internet tab instead of focusing on a paper, I wouldn’t need to earn my MBA…I’d just buy one.

*stops writing this post to research the going price for MBA degree*

Obviously I can’t actually buy a graduate degree and as easy as it is to joke about the fact that many of us can’t pay attention anymore, this notion made think (impressively, for more than 8 seconds) about how investors are affected by short attention spans. This mindset makes investors hypersensitive to trading frequency (“Why didn’t my investment adviser buy anything today!?”) and short-term price movements (“She bought that for me last week, why is it already down -1%!?”). This mentality can cause investors to “act just to act,” or worse, act solely on short-term volatility.

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Investment Strategy: Gender-Based Differences

Men own penny stocks on Mars and women have a money market account on Venus.

At least I think that’s how the saying goes…

Okay, maybe not quite like that but the point is, there are noticeable differences between genders when it comes to investing strategies. Many of these came to light just recently, since for years it was the norm for the men to handle most couples’ finances. As women became a bigger presence in the work force, waited longer to get married and couples began divorcing more frequently, women found themselves solely in charge of their own finances. Once they began to invest, based on their own values and goals, it became evident they (typically) invest much differently than their male counterparts. As an investor, a professional investment adviser and a woman myself, this idea is intriguing to me, so I decided to explore these differences…what they mean…and what to do about them.

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Plenty of Millennials Fit A Generational Stereotype…Just Not The One You Think

My chops for penning this blog are that I am both a baby boomer and an employer.  The social media biosphere is replete with (mostly) well-intentioned advice for what millennials need to do to excel in the workplace.  These “rules” are usually handed down by older people who are well-established in their careers and hold positions of power and authority–in short–by baby boomers, who constitute a large majority of today’s professional power brokers, successful entrepreneurs, corporate executives, etc.

Boomers are notoriously work-centric, goal-oriented, self-reliant, and competitive.  Too often they find millennials self-absorbed, lazy, entitled, and narcissistic.  Is it any wonder that the two generations might butt heads in the office?  I think not–and that’s assuming a millennial can win a job from a boomer hiring manager in the first place.

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Learn to Be a One-Man Wolf Pack

“…Well all my friends were doing it!”

“If all your friends jumped off a bridge, would you too!?!”

As kids, we all had some variation of this conversation with our parents, right?

So, as adult investors, we know that we shouldn’t blindly purchase a stock just because everyone else is, right? Unfortunately, no. Over time, individual investors consistently buy-high and sell-low, despite trying hard to do the opposite. The root of this trend is that, even after lectures from mom and dad, human beings find comfort in numbers.

“But Mommmm, everyone else is buying that stock!!”

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Panic is Not An Investment Strategy

U.S. stock performance was up ~6% in March, lifting equities out of correction mode after January’s sharp sell-off. But is that enough to restore the investor confidence that’s been lost? Volatile times like these can make or break successful investment strategies.

Shattered investor confidence can lead to a self-fulfilling prophecy, like bear markets or corrections, even as leading economic indicators are signaling a much less dire scenario. Continue reading “Panic is Not An Investment Strategy”