Are Your Worries Real? Financial Services Advice

How do you know if your worry is real or just manufactured by Facebook posts, email forwards, CNBC headlines or a brother-in-law who knows someone who works for someone who knows something about what is going to happen sometime?

Getting legit financial services advice from a fiduciary is important. Otherwise, you will rely on the rumors and hearsay around you.

Below are 4 signs your worry may be in vain.

1. The market goes down by 5 percent.

Since 1927, the S&P 500 has averaged a correction of at least 5 percent about once every 3-½ months. A pullback is as normal and predictable as a wave crashing or the sun rising.

2. You only read the headline.

In March 1972, a Time magazine cover asked, “Is the U.S. Going Broke?” In January 1991, Time’s headline stated, “High Anxiety.” In July 2003, Time’s cover asked its readers, “Will You Ever Be Able To Retire?” If you could time travel, would you go back and invest $100,000 in 1972, 1991 or 2003? We can’t sue headlines for negligent advice, so be acutely aware that they can mislead without consequences.

3. Investment salespeople are consistent bears.

Someone who always claims that the market will crash will eventually be right … one day. It is easy to convince a consumer that the market will crash and then sell the solution. The problem is that it could take years for the “theory” to develop, and until then, there’s a price to pay for pessimism. Ask the bear mogul about his or her track record. That might make your “advisor” go into hibernation.

4. There are lines at Starbucks.

Consider the global demand. The global middle class in India, China, Russia, Brazil and many other countries want what the West has today. They are buying toothpaste, steaks, tires, toilet paper and iPhones. If you need to be convinced, look at the lines for overpriced coffee, and it’s clear that we are a far cry from food rationing.

Yes, the market could crash. But it’s a possibility, not a probability. Worrying may be a waste of energy. Like my son tells me, “Dad, chill.”

The capital markets will still be around to support your long-term goals. If they continue to grow, you will need to develop a legacy plan so you don’t leave the next generation worse than you found it.

The Porch

If someone isn’t taking huge risks and is well diversified, I believe if and when the market goes down, they will fall off the porch, not the roof. In other words, they will experience some paper losses but not to the extreme of others who are taking big bets.

I would suggest that you ask your advisor: “Based on how I am invested, if the market goes down dramatically, will I fall off the porch, or will I fall off the roof?”

Here Come the Con-Artists

The definition of a con-artist is a person who cheats or tricks others by persuading them to believe something that is not true.

Many con-artists are sneaky. And they often prey on senior citizens. Here’s a scenario that, unfortunately, happens nationwide:

You receive a phone call from an unknown, soft-spoken woman. The direct young lady on the other end of the line knows your name and is clearly connected to your family. She mentions that she’s a close friend of your grandson and desperately explains that he’s in a lot of trouble. He is in jail in a foreign country and needs $5,000 in bail money. If you don’t act quickly, he could be seriously tortured.

What do you do?

Here’s another common scam:

You get a call in the evening that an international ministry urgently needs a charitable donation, otherwise the children will go hungry.

Do you provide your banking instructions?

How do you handle a scary, urgent, unknown call relative to your investment portfolio, a water leak or a rare virus on your computer? Do you provide credit card information to fix the problem?

Scammers are intelligent. You must keep your guard up.

It’s sad to think, but you may also be scammed by family members.

According to the National Adult Protective Services Association, 90 percent of financial abuse is from family members or people who are trusted. Most seniors are scammed by people they trust.

For example, a grandchild moves into Grandma’s home, tricks Grandma to sign a power of attorney and gives the world permission to steal. Other times, a child will figure out a way to have a parent remove all other beneficiaries from life-insurance policies. There are many ways that close family members can steal.

The financial loss is devastating and the emotional feeling is irrecoverable. Do not let this happen to you. You must ask verification questions even with the ones you love.

If you are a senior citizen and uncertain about a financial decision, visit the Consumer Financial Protection Bureau, where the goal is to make sure you are treated fairly financially.

This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.

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