President Trump and Market Volatility

When you can't be sure what the "Leader of the Free World" will do or say on a daily basis, the world is full of surprises. Now this isn't a political blog, so why do you care?

With many of us using the stock markets to help fund our retirements, this uncertainty in the market makes fighting human nature even more challenging. As many of you will have noticed, the markets have been increasingly volatile these days. Up significantly one day, only to drop more the next. Often the valuations don't seem to be tied to any one policy change, but they can cause us all to question where the market is going.

This environment makes it increasingly difficult to follow the proven buy and hold strategies preached by most, including the good folks at Canadian Couch Potato. Furthermore, it makes it seem that this might be the opportunity we've all secretly been  waiting for to try our luck at timing the market. Maybe you're holding more cash than normal while you wait for the right opportunity to buy? Or perhaps, you've bought more than normal thinking the markets will continue to go up with the new President's policies.

Either way, you're doing yourself a disservice if you are in this game long term, as most investing in the stock market should be. Your best bet will always be to use index funds to invest in a wide swath of the market, and to buy on a regular basis regardless of how you feel the market may be going. This is the best way to reach your financial goals.

Putting your Finances on Autopilot

I got a panicked text from a friend's wife the other day which lead me to believe that their marriage might be over. She was panicked, considering leaving him, and all over.....money.

She felt betrayed by him lying to her about money, but after some discussion, she admitted that he wasn't really lying, in fact, he just didn't know the answers to her questions. His apathy had resulted in stagnant credit card debt, virtually no payments on a layaway item with significant interest to be applied in a few short months, and all because he hadn't been paying attention.

In reality, they both take home good incomes, and have very little debt. So why was he struggling. The reality was that he wasn't "paying himself first". Instead, he was wasting money on fast food impulses, despite having food in his house, and the time to make something. He admitted that this brought him no lasting pleasure, and therefore really didn't add any value to his life.

So what can he do to fix this? Well, as I said, he should pay himself first. Ideally, he should take money out of his pay check every payday and apply it directly to his highest interest debt. Next, he should sit down once a week and look at his bills. This isn't something that he will enjoy, but it will ensure that he doesn't miss any payments, and that he knows where his money is, and perhaps more importantly, should be going. In his particular case, he's fortunate that he could do this at work, and  free up  his personal time for the things he enjoys.

I had money with his wife a few days later, and was happy to hear that things between them had already improved. I think that having this discussion now, no matter how unfortunate, will only strengthen their relationship, and set them up to better meet their financial goals in the future.