NorthStar Featured in U.S. News & World Report
U.S. News & World Report featured our founding partner Dr. Chris Mullis in a story, “10 Reasons New Investors Should Enter the Market”. Lou Carlozo, one of the nation’s leading personal finance writers, reached out to NothStar Capital Advisors for our insights and wisdom for new investors contemplating an entry into a choppy or down market. Scroll down to read Dr. Mullis’ full guidance.
NorthStar is the brainchild of three Ph.D. astrophysicists who moved into finance to help families solve down-to-Earth problems. The firm is dedicated to applying the academic principles of behavior finance and investment management to guide families to strong financial decisions.
Here are our leading thoughts to guide new investors:
- New investors should embrace the opportunity to start their investing experience in a down market. These conditions are ideal for helping you get your investing psyche or your investing brain straightened out from the get go. Bear markets showcase the negative inputs and fears that all investors ultimate face. Take up the challenge early on to understand the fears, to recognize your intuitive human response, and take counter-intuitive actions. You’ll cultivate long-term wealth with that counter-intuitive mindset that features taking the long-view, developing a thick skin to combat the short-term “noise”, and sticking to your investment strategy with steely discipline.
- If you’re new to investing you should be happy there’s a bear market because that means more buying opportunity. You’re buying on discount and getting more bang for the buck. So embrace the bear market. Get in the game and get the benefits.
- Another reason one shouldn’t hesitate to get into a down market is because bear markets are absolutely normal events. Historically a bear market occurs about every 6 years on average. So a smart young person who starts investing in her mid 20’s will experience about 7 bear markets before retiring in her mid 60’s, plus 5 more during 30+ years of retirement. Even though bear markets are regular events, the exact timing of the bear’s appearance and disappearance is not. Hence, the evergreen but difficult-to-follow-advice, “don’t try to time the market”.
- When you’re trying to understand what’s the best course of action, it’s often beneficial to consider what’s the worst thing to do. When it comes to bear markets, the worst thing to do is to panic, sell, and become a non-participant. Today in 2015, our office gets a regular flow of folks seeking our help. They cashed out at the bottom of the market in ’08 and ’09 and never got back in. They are trying to find the courage and commitment to come back in and re-start the wealth accumulation process. They have squandered the last 6+ years of stock market growth by sitting on the sidelines. They’ve thrown away money and damaged their retirement lifestyle by taking negative action around a bear market. So back to your quandary of plunging into a bear market….get in and stay in. You’ll be happier and wealthier in the end.
- In summary, investors grow their wealth by getting in and staying in. If you have any troubles understanding the why’s or maintaining your discipline to stay the course regardless of the moment, reach out to a professional advisor. That will probably be the most profitable call you ever make in your life.