Livingston Financial Planning

With gloomy news reports and wild market fluctuations, you might be tempted to follow John Prine’s advice, but don’t.

First, it’s March, and that includes must-see basketball. Plus, baseball season is approaching (finally), and even with no Freddie Freeman in the ATL, the Braves are still World Champions.

To some, I may sound like an out-of-touch sports nut. Au contraire, take it from 2017 Noble Prize in Economic Sciences winner Dr. Richard Thaler. Years ago, when quizzed by a financial news network host about how best to deal with volatile markets, Thaler replied, 'Switch to ESPN.'

Immediately the producers cut to break.

Like Prine, Thaler was serious and funny simultaneously. Clever is the word. The Noble Committee blundered by never recognizing John Prine’s brilliance. Maybe if he’d lived longer they would have. They should have, but that’s the way the world goes round.

Follow the news, but don’t let it lead you. Some financial gurus may say stick with your plan. But that depends on what the plan is. If it’s a lousy plan, sticking with it likely won’t help. For instance, if you planned to beat the market, Thaler warns you probably can’t, certainly not consistently.

Look at projected spending for the near-term; less than two years. Then, in addition to an emergency fund for unexpected expenses, make sure withdrawals for essential costs are in cash or projected dividend income.

It’s OK to spend retirement savings during a market downturn, but avoid having to sell a stock position during one.

Regular readers know I lobby for using I-bonds, inflation-linked Treasury bonds. They pay over 7% through April and likely will for the following six months, given their yield is based on the Consumer Price Index. Thaler recommends them as well.

Even if inflation moderates, having super-safe assets free from market fluctuations remains a good strategy. Advisers don’t tell you about them because there are commissions or management fees to collect. While I-bonds have drawbacks, they are minimal.

Given increasing longevity, retirement savings have a multi-decade window. So while the stock market is a good bet for the long-term, it’s not perfect, and it’s absolutely no sure thing.

Instead, pay attention to another Noble Prize winner, Dr. Eugene Fama, who warns it’s 'probably' a good bet for the long run. However, Fama stresses there’s always risk in the stock market. 'It never goes away.' And, which way will the market go? Fama’s reply: 'My whole life’s work says you can’t answer that question.'

The best option is to have a portfolio reflective of your goals, time horizon and risk tolerance. Most importantly, don’t look at the market constantly.

Instead, here’s a short list of things you should do more often.

Change your air filters, get a haircut, do the laundry, floss, eat at your favorite restaurant or go for a walk.

Like my Twitter friend Cody Garrett said, 'Be passive with your investments so you can be active with your lifestyle.'

You can’t always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by 2050 W. County Highway 30A, M1 Suite 230.

Don’t blow up your TV With gloomy news reports and wild market fluctuations, you might be te

Suppose you want a strong economy, a growing 401k, and the ability to travel and go to restaurants, then we must focus on controlling coronavirus. It’s not a hoax; 800,000 Americans have died. Omicron is not a sly plan by the Democrats to monkey with the 2022 mid-terms either. The Fox News clowns that parrot that hokum are all vaccinated. Everyone on Fox News is vaccinated. Heck, I bet Tucker’s been boosted.

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Of course, having enough money for retirement cannot be underemphasized, but health and relationships with peers are equally important. Importantly, all three require diligence before retirement and afterward. Think of retirement as a three-legged stool.

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When Steve Goodman and John Prine wrote "You Never Even Called Me by My Name," they added lyrics to the finished product, sort of what I'm doing today. A loser covered it, but we won't call his name.

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