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Market Madness

Market Madness

Originally aired 3/10/2021

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Everybody get up, it’s time to PLAN now. We got a real jam goin’ down. Welcome to the Get Ready For The Future Show! On this episode, we’re talking basketball, markets, and retirement planning!

You’ll learn:
– 3 things March Madness can teach you about retirement planning
– How to avoid being a benchwarmer on the road to retirement
– Key market insight from LPL Chief Market Strategist Ryan Detrick

Links:

Free 15 Minute Retirement Checkup

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SHOW NOTES

They’re Playing Basketball, We Love That Basketball!

  • On today’s Get Ready For The Future Show, we’re talking all about how March Madness can teach you a thing or two about retirement planning!
  • It’s that time of year again where everyone tries to predict the future as they fill out their brackets.
    • Of course, there’s always someone heartbroken that their bracket didn’t work out.
    • There are tools to help you make a better judgement (stats / look at what’s worked in the past / look at their season), but it’s still not likely to work out.
  • The odds of picking a perfect bracket – picking all 63 games correctly – on guesses alone is 1 in 9.2 quintillion.
    • One quintillion is one billion billions.
    • If you know a little something about basketball, your chances are slightly better at 1 in 120.2 billion.
    • A few things that have better odds:
      • Winning the powerball jackpot: 1 in 292,201,338
      • Winning $1M on Wheel of Fortune: 1 in 8098 players
      • Hitting a hole in one: 1 in 12,500 amateur players, 1 in 7,500 pro
  • You aren’t going to get a perfect bracket, but you want a winning bracket.
    • When it comes to retirement, the outcome is income
      • You don’t need to beat your neighbor on a rate of return, you need to focus on the income you need.
    • “Earnings and income are not going to sell ads on CNBC but they will help your clients meet their goals” – John Lynch
  • There are tools to help you make a plan that is better for you to work toward the outcome you need.
    • That’s why we’re education-driven, and that’s why we’ve got Ryan Detrick on with us right after the break!
    • That’s also why we’ve developed our free retirement checkup!
      • If you’re ready to find out your likelihood of a successful retirement and start putting those tools to work for you, click here.

Interview: Ryan Detrick, Chief Market Strategist with LPL Financial

  • With us today, as he is every month, is Ryan Detrick, Chief Market Strategist at LPL Financial.
    • Ryan, how are you?○ It looks like the Biden administration’s 1.9 trillion dollar stimulus program is headed toward becoming law. What are your thoughts on this latest round of stimulus and its effects on the economy and the markets?
    • The rally we have seen in energy stocks in the last few weeks has been impressive. Is the rally finished or is this historically weak sector ready for one of its famous long-term gains?
    • It looks like interest rates are creeping up as inflation is beginning to make its presence known. What is your outlook for rates and the bond market?
    • We are seeing some positive momentum with the roll-out of Covid 19 vaccines and over the weekend, there was a story of the development of a drug that has shown itself in early trials to be effective at stopping the virus in those who are infected. Give us your take on where we are in the battle against the pandemic?
    • There were indications last week that spring is on the way and the economy seems to be springing forward as well. What are your thoughts on the manufacturing sector and jobs growth overall?
    • What areas of concern is your research team focused on in the midst of the good news?
    • Who have you got to win the championship game?

Everybody Get Up, It’s Time to Plan Now (We’ve Got a Real Jam Goin’ Down)

  • Some people are such loyal fans, they pick their team to win it all, even if the team isn’t any good.
    • While a Cinderella story upset from your favorite team would be exciting, you’ve got to come to grips with reality – how likely is this really?
  • Overconfidence in a specific product or stock is the same thing.
    • Products are not plans.
      • If your financial advisor only has one play, they’re not a financial advisor (or a basketball player). They’re actually just a salesman for something that will make them money.
      • That’s one of the biggest disservices of our industry – the idea that products can give you financial security or solvency. They can’t.
  • Only risk what you’re willing to lose / make sure it doesn’t impact your overall plan.
    • Risk tolerance
      • Looks at how much market risk an investor can tolerate.
      • How much of a loss are you willing to take?
  • An aggressive investor is willing to risk more money for the possibility of better returns than a conservative investor.
  • Timeline (age and relation to retirement), future earning capacity, and the presence of other assets can all factor into your risk tolerance.
  • Our answer for risk
    • The Ready to Retire Process!
      • Diversification and Buckets
    • Make sure your needs and desires are covered in your plan. If you have a little fun money outside of that, then you can consider making some risky picks and rooting for the underdog.
  • What are your chances for a successful retirement?
    ○ Find out for free here.

Pump Up the Plan, Pump it Up!

  • You don’t buy financial independence; you invest in it.
    • If the Michael Jordans and Kareem Abdul-Jabbars of the world didn’t invest in being the best – if they bought their way onto a team instead of focusing on being the best they could be – they wouldn’t be some of the greatest basketball players of all time.
    • How invested are you in your financial future?
  • Don’t be a benchwarmer!
    • There’s no way to win the game if you’re not in the game.
    • If you’re not doing these things already, start now:
      • Don’t miss free throws
        • Max out your match
        • Your savings rate has more to do with your success in retirement than the rate of return you get on your investments.
      • Get a game plan
        • The idea of creating a financial plan can be overwhelming, or intimidating. You worry that you don’t “know enough” about it to do it well or that you might even be “bad” at money.
        • This perceived shame holds people back from making better decisions.
        • Fact is, you’re not expected to know anything. Because unless you’ve spent years studying the behavior of money, how would you know?
        • Being “good” at money isn’t knowing something you were never taught, but choosing a coach you can trust to guide you through it.
      • Play some defense
        • What could go wrong? What could put your future, your family, or your plan at risk
        • Protect your plan.
          • Life Insurance
          • Estate planning

FINAL THOUGHTS

    • You’re not going to get a perfect bracket, but you want a winning
      • You can’t predict the future, but you can use tools and resources to help you create a plan that works for you.
      • The outcome is income.
      • Find out your likelihood of success with your current strategy for free! Click here.
  •  
    • Just because it’s called financial independence doesn’t mean you should go it alone.
      • Even the greats had a coach to help them see the big picture and keep them on their game.
      • That’s where we come in. We help you put a plan together and make adjustments along the way to help you work toward your goals.
  •  
    • There’s no way to win the game if you’re not in the game.
      • Start these things now if you haven’t already:
        • Don’t miss free throws (or free money)
        • Get a game plan
        • Protect your plan