Search

Stories from the Road

Lately, I have been getting a lot of great feedback and questions from readers and followers of

The Roadside Scholar.  A recent interaction is particularly worthy of mention.


A friend contacted me to review her portfolio and offer suggestions – right in the middle of the COVID-19 caused stock market meltdown.  By way of background, she was a mother of two who had gone through a difficult divorce a few years back.  Prior to her divorce, her husband had handled all the finances for the family; she was in the dark.  After the divorce, she had to learn and learn fast.


She contacted me because her account had declined in value by about 35% over a 3-week period and, unfortunately, her financial advisor had retired.  She wanted to know if she should sell - go to cash (and pay taxes) to avoid more losses - or hold on.


After a bit of studying, I concluded that she had exactly the right type of investments – diversified bundles of stocks and bonds.  Yes, the value had declined dramatically in a short time period, but she was not alone.   With the market down so much, there was no safe place to hide.  I advised her to hold on (as difficult emotionally as that was). 


About a week ago, she texted saying that her account value had returned to its previous high dollar level and thanked me sincerely for giving her the confidence to stay the course.   


This story raises a few common issues. 


First, women should not allow themselves to be in the dark as regards family financial matters.  This is not because wives should distrust their husbands.  It is because stuff happens in life – some of it bad.  In May, my daughter was engaged to a great young guy and a registered financial advisor too.  Notwithstanding his personal high integrity and profession, my advice to her is to always be aware of their financial situation.  One never knows when the world will turn upside down and the “non-financial” spouse will have to take over.


Second, markets fluctuate up and down and sometimes decline dramatically in short periods of time.  Owning a properly diversified portfolio (read: stock and bond bundles) is critical.  Understand, however, that even the best portfolios decline.  Staying the course in these times is super hard.  The Roadside Scholar advice to Never Sell (assuming a diversified portfolio) is critical to reaping maximum profits and minimizing taxes and transaction costs.  


Roadside Scholar Tip:  Both wife and husband should be aware of family finances at all times.  And, Time Not Timing is the key to optimizing your odds of investment success.


**********




For more information and easy to understand explanations of important money matters go to www.theroadsidescholar.com or purchase The Roadside Scholar: Amazing Money Lessons from Behind the Fence.  

27 views0 comments

Recent Posts

See All

You're young. Retirement is decades away. Why should you care about financial planning? Let financial experts Adam Grossman and Brad Stinn give you a few reasons - hosted by Charlie Brennan of KMOX Ne

A friend told me about The Psychology of Money, published in 2020 by Morgan Housel, and I am happy that he did. It is fantastic. You would be hard pressed to find a more entertaining and understanda

“In the short-term, Wall Street is a casino because anything can happen. (Luck is more important than fundamentals.) In the long-term, Wall Street is also a casino, ruled entirely by statistics, proba