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About Jim Malliard

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So far Jim Malliard has created 29 blog entries.

US Economy Showing Resiliency

Amid a period of scary viruses and social unrest, it’s time again for a reminder that the wise investor maintains a written long-term investment plan, then holds on tight and stays invested when markets are volatile. Despite everything, U.S. markets and the economy are showing remarkable hardiness. How is the US economy showing resiliency? Read on.

We experienced a nerve-wracking stock market correction in March 2020, with U.S. stocks declining about 33 percent. Since then, markets have come back strong. Stocks rose around 30 percent from mid-March to mid-June 2020, as measured by the S&P 500 large company index. Who could have guessed?

Then May brought surprisingly strong employment numbers as the economy gradually re-opened. The number of unemployed fell by 2.1 million, according to the Bureau of Labor Statistics. (Note: the bureau acknowledged misclassification of workers on temporary layoff in its reporting since March. While May’s unemployment rate remains high at 16.4 percent, it still represents a dramatic drop from April.)

It’s wise advice to remain calm and steady in challenging times. Doing so helps us endure and navigate the unpredictable. Investors, too, are often rewarded for staying calm in volatile markets.

“Emotions can have lasting consequences, and this is particularly true when you try to time the markets,” says Josh Hile, a Seattle-based investment analyst.

Perspective Financial clients have a clear, written, long-term investment plan, executed using broad diversification and reputable mutual funds. Rough times tend to be easier to get through, as a result.

Speaking of the U.S. economy – built on grit and a never-give-up spirit – allow me to share a book recommendation. Graham Moore’s The Last Days of Night is a historical novel about the invention of the light bulb and efficient electricity transmission. Featured in the story is the sometimes-nasty rivalry between Thomas Edison, George Westinghouse and Nikola Tesla. It’s an engaging read and wonderful break from every-day stress.

As Moore describes his work, “I love the notion that I could write something that two people could share. That’s the goal.”

By |2020-06-15T16:15:06-07:00June 22nd, 2020|Books, Current Affairs, Investing|

Ideas for a Healthy New Decade

ideas for a healthy new decadeAgain this year, my favorite Christmas gift was a book. My son gave me The Secrets of People Who Never Get Sick. Author Gene Stone interviewed dozens of people who never get sick and asked them for their secrets. His book features 25 people who each possess a different secret of excellent health – one that makes sense and has a proven scientific underpinning. It got me thinking about ideas for a healthy new decade.

Some of the so-called secrets aren’t that astounding, though they’re presented with an interesting twist. Late comedian George Burns, who lived to be 100 years old, was remarkably healthy and fit his entire life. When asked to reveal his secret, he puffed on his cigar and said, “Eat half.” That’s a pretty easy one, considering the out-of-control portions served at many restaurants. Split that giant cheeseburger with someone.

Other ideas are more surprising and challenging. One example? Cold showers.

For thousands of years, ancient physicians recommended frigid showers for healing and to boost immunity. For me, that’s rough. A cold shower is not what I want on shivery mornings, despite Phoenix’s comparatively moderate winters. So I’m easing into the idea. My strategy is to pull back on the hot water just enough so that my shower is on the edge of warm and cold. Then I hurry out.

Another idea that takes some adjustment is consuming brewer’s yeast daily. A natural by-product of beer production, brewer’s yeast is a probiotic and excellent source of B vitamins and other nutrients. It looks like whole-wheat flour and tastes like liquefied pizza dough. I add a half-teaspoon to flavored, fizzy water, and then I choke it down. But, I’ve gotten used to it.

Maintaining financial health also involves a mix of simple ideas and uncommon though proven ones. Some are easier to put into action than others. At Perspective, we’re committed to helping you develop practical strategies to become and stay financially fit. Here’s to a physically and financially healthy new decade!

“I look to the future because that’s where I’m going to spend the rest of my life.” — George Burns

By |2020-01-17T09:36:55-07:00January 27th, 2020|Books, Financial Planning|

Create Long-Term Investment Plan

create a long-term investment planAs sure as summers will be hot here in Arizona, the stock market will serve up a scare every six months or so. The recent global stock market slump illustrates that. Times like this are why we ask questions such as, “Why am I investing?” It’s a reminder that we need an up-to-date, written, long-term investment plan which links up with the answer. A solid plan helps us resist the urge to react to inevitable short-term moves.

Trade with China has been highlighted as a “reason” for volatility. A big concern is that China will devalue its currency, the yuan. That would reduce the price in dollars for Chinese exports to the United States, offsetting the cost of proposed tariffs. However, China says it will not continue to devalue its currency, Forbes.com reports. Pressures on China from international currency markets to avoid doing so are enormous. Respected, non-partisan economist Gary Shilling notes, if there is a trade war with China, the United States will win.

“The buyer – America – inherently has the upper hand over the seller – China,” he says.

Another dark cloud has been the drumbeat of impending recession. We hear a chorus of

“The inverted yield curve!”

A normal yield curve is sloped up: short-term bonds, lower yields (interest rate); longer-term bonds, higher yields. As of today, that has flipped. The rate on the 2-year Treasury bond is a little higher than that of the 10-year bond. That has sometimes preceded a recession; however, the bond market eventually corrects itself. The longer-term bond “looks too expensive,” the price falls, and the yield increases. The Federal Reserve, with direct influence over short-term interest rates, has pledged to react swiftly by cutting rates if needed.

Current economic statistics speak for themselves: Retail sales and consumer confidence have surged well above economists’ expectations, “more than enough to keep the economy growing,” according to Marketwatch.com. Employment numbers are the best they have ever been in some cases, and in more than 50 years in other cases.

If you’re feeling the heat, take a moment to review your investment plan. Then pour yourself an icy sweet tea and stay cool as the summer and the markets boil.

 

By |2019-08-19T09:42:52-07:00August 19th, 2019|Current Affairs, Investing|

Five Minute Gift

Five Minute GiftOne of the favorite gifts I received last Christmas was The Five-Minute Journal by Alex Ikonn and U. J. Ramdas. With this simple book, I begin and end each day by writing down daily goals, personal affirmations, “amazing things that happened today,” and areas for improvement. This daily five-minute gift to myself has been beneficial on many levels.

The exercise reminds me of one of my favorite high school teachers, a Cuban refugee and Spanish teacher, who encouraged us to write extensive notes as we studied for exams. That way, he said, we would be more likely to recall the material. It worked for me then, and the exercise of writing continues to help me decades later.

Scientific studies confirm that writing thoughts down significantly improves recall and increases the likelihood of accomplishing goals. It also can have a therapeutic effect. Given the documented benefits of journaling, including improved memory and health, New York Times columnist Hayley Phelan has gone so far as to call journaling “essentially a panacea for modern life.”

Written thoughts and goals are beneficial in all aspects of life, not the least being investment and financial planning. That’s why creating a written plan is one of the first tasks we complete with new clients. Clearly defining things like your goals and tolerance for risk, and the responsibilities of the parties involved (i.e. advisor, account custodian, fund managers) are fundamental elements of a good investment policy statement (IPS).

The IPS also includes an asset allocation plan for your portfolio. Your advisor performs periodic reviews of the allocation to help assure your investments are aligned with your plan. It’s also good for you to review the plan at least every few years to update or revise, if needed.

Give Yourself a Five-Minute Gift Each Day

Again, writing things down helps you remember what objectives are most important to you. It provides peace of mind knowing you have a plan. And it increases your chances of achieving your goals.

By |2019-08-14T13:59:45-07:00March 31st, 2019|Financial Planning|

Create a Vivid Written Financial Plan

How many times have you been told you’re more likely to achieve a goal if you write it down? More times than you can count? Probably. That’s because study after study has proven it to be true. Is it time to create a vivid written financial plan to achieve your goals?

Vividly describing your goals in written form is strongly associated with goal success. People who very vividly describe or picture their goals are anywhere from 1.2 to 1.4 times more likely to successfully accomplish their goals than people who don’t, according to Mark Murphy, CEO of Leadership IQ, a leadership training and research firm.

“Writing things down doesn’t just help you remember, it makes your mind more efficient by helping you focus on the truly important stuff,” Murphy stresses. “And your goals absolutely should qualify as truly important stuff.”

When you take possession of something – an item or an idea – you are more committed to it. Neurologists and psychologists call this phenomenon the “endowment effect.” Thus, writing down a goal gives you ownership of that goal. It becomes “yours,” a part of you, something you want to keep and protect.

That’s just one reason why we encourage our clients to have a written financial plan. It’s a way to vividly picture where you want to go and how you will get there.

We also encourage you to revisit that plan periodically – it’s not chiseled in stone; it’s a living document that changes and adapts as you live your life.

October is National Financial Planning Month.

Charles Schwab’s 2018 Modern Wealth Index survey shows that investors with a written financial plan tend to have greater fiscal discipline and better money habits.

Unfortunately, only 25 percent of Americans have a written plan. At Perspective Financial Services, about 50 percent of our clients have a written plan. If you don’t have a written financial plan, talk with your advisor about creating one.

By |2019-08-14T13:59:47-07:00October 22nd, 2018|Advisors, Financial Planning|