Winter Edition 2021 Robert G. Elliott’s Wiley Bros. Aintree Capital, LLC. - Member SIPC Financial News 40 Burton Hills Blvd., Suite 350 .. Nashville, Tennessee 37215 . Phone (615) 255-6431, Toll-Free 800-827-7862 wileybros.com Focus on the Basics It’s easy to become overwhelmed your lifestyle. Don’t have any money left or change investment allocations. when faced with all the decisions that over for investing? Ruthlessly cut your - Understand that risk can’t be need to be made to ensure you select living expenses – dine out less often, stay totally avoided. All investments are appropriate investments to help pursue home rather than going away for vacation, subject to different types of risk, which your long-termWiley Bros. investment Aintree Capital, goals. LLC. - Member How SIPC do rent a movie rather than going to the theater, can affect the investment’s return. Cash is you choose the right combination of cut out morning stops for coffee. Redirect primarily affected by purchasing-power investments to help you work towards a all those reductions to investments. This risk, or the risk that its purchasing-power goal that may be a decade away? The should help significantly with your retire- will decrease due to inflation. Bonds are answer is to focus on the basics. Make ment. First, you’ll be saving much more for subject to interest-rate risk, or the risk that sure you are getting these fundamentals that goal. Second, you’ll be living on less interest rates will rise and cause the right: than you’re earning, so you’ll need less for bond’s value to decrease, and default risk, - Don’t wait – invest now. To retirement. or the risk that issuer will not repay the put the power of compounding to work - Maintain reasonable return bond. Stocks are primarily subject to for you, start investing now. It’s easy to expectations. When developing your finan- nonmarket risk, or the risk that events put off investing, thinking you’ll have cial goals, you’ll typically decide how specific to a company or its industry will more money or more time at some point much you need, when you’ll need the adversely affect a stock’s price, and in the future. Typically, however, you’ll money, and how much you’ll earn on those market risk, or the risk that a stock will be be better off saving less now than waiting savings. Those factors will determine how affected by overall stock market move- and saving more later. Consider the much you need to save on an annual basis to ments. These risks make some invest- savings habits of a 20-year-old couple. reach your goals. The higher your expected ments more suitable for longer investment The wife starts contributing $2,000 per return on investments, the less you need to periods and others more suitable for year to a tax-deferred investment, such as save every year. However, if your assumed shorter investments periods. a 401(k) plan, when she is 20. After 10 rate of return is significantly higher than - Diversify your portfolio. When years, she decides to stop investing and your actual rate of return, you won’t reach stocks had above-average returns for an let her money grow until retirement. She your goals. Thus, it’s important to come up extended period, diversification acted as a has invested a total of $20,000. Her with reasonable return expectations. While drag on total return. By definition, allocat- husband starts investing when she stops, past returns aren’t a guarantee of future ing anything other than all of your portfo- investing $2,000 per year from the time returns, you’ll want to start by reviewing lio to the best-performing asset lowers he is 30 until he retires at age 65. Thus, he historical rates of return for investments your return. But when stocks decline saves every year for 35 years, making a you’re interested in. You can then adjust substantially, the disadvantage of invest- total contribution of $70,000 – $50,000 those returns based on our expectations for ing only in one asset class becomes appar- more than his wife. If they both earn 8% the future. Assessing your progress every ent. Typically, you do not know which compounded annually, who will have the year will allow you to make adjustments asset class will perform best on a year-to- larger potential balance at age 65? Time along the way. If your return is lower than Continued on Page 2 and compounding of earnings favor the expected, you may need to increase saving wife. Before paying any taxes, her balance would equal $462,649, while her husband’s balance would be $372,204. (This example is provided for illustrative purposes only and is not intended to project the performance of a specific investment.) - Live below your means so you can invest more. It’s a basic fact that most people have trouble coming to grips with — the amount of money you have left over for investing is a direct result of Allie, Bob, & Sarah Robert G. Elliott’s Financial News 1 Focus on... Personal Note Continued from Page 1 If you are like me, I’m guessing you year, he experienced something new in his year basis. Diversification is a defen- are ready for the COVID-19 pandemic to be long, illustrious career. A challenge to a sive strategy – it helps protect your over. The past year has been a challenge for drum battle. portfolio during market down-turns and many of us as we have learned to embrace Rock-and-roll is no longer what reduce your portfolio volatility. Diver- new experiences such as wearing masks, most kids listen to these days, but Nandi sify your investment portfolio among a washing our hands constantly (Purell in the Bushell is an exception. After listening to a variety of investment categories, such cup holder of every car!), and learning to Beatles record, she fell in love with the as stocks, bonds, cash, real estate, and maintain proper social distancing in places drums and has posted many videos of others. Also diversify within invest- like Kroger and Publix. There have also been herself playing on YouTube. Unfortu- ment categories. some sweet moments of family time that nately, due to the pandemic, Nandi didn’t -Wiley Only Bros. Aintreeinvest Capital, in LLC. the - Member stock SIPC might never have happened without the really have anyone to play with. But when market for the long term. Stocks pandemic. When the “stay at home” order hit have obstacles ever stopped kids from should only be considered by investors Nashville in 2020, my wife, Cassie, and I had doing what they love to do? with an investment time frame of at both of our daughters at home for about two So, for her next YouTube video, least five years. Remaining in the months. Most of you know my oldest, Sarah, Nandi played a cover of Dave Grohl’s market over the long term reduces the as my business partner and her younger biggest hit: A song called Everlong first risk of receiving a lower return than sister, Tate, is a senior in college. To have released in 1997.1 And at the beginning of you expected. both adult daughters at home with us for an the video, she issued a challenge. Expertly - Don’t try to time the extended visit was something we’re not twirling one stick while pointing the other market. Timing the market is a likely to experience again. And we were directly at the camera, she announced: difficult strategy to accomplish grateful for that time together. Another “Dave Grohl, I challenge you to a drum- successfully since so many factors development that has evolved from the off!” pandemic is the explosion of Zoom calls and Asked why she challenged an affect it. Remember that most people, video conferencing. I was not a fan of icon, Nandi’s logic was refreshingly including professionals, have difficulty “virtual” meetings prior to the pandemic, but simple: “He’s a drummer, he thrashes the timing the market with any degree of I have adapted to them quickly and find that kit really hard, which I like, so why not? 2 accuracy. Significant market gains can this type of communication does have My dream is to one day jam with Dave occur in a matter of days, making it tremendous value. While I prefer in-person Grohl and all the Foo Fighters!”1 risky to be out of the market for any meetings, I expect getting together via Zoom A few days later, Grohl’s phone length of time. Instead of timing the or other social media applications will blew up thanks to an explosion of texts. market, concentrate on setting an continue post-pandemic. I know we have They all said the same thing: You’ve been investment program that works in all connected with family via Zoom calls for called out by a 10-year-old, Dave. What market environments and you can stick holidays and birthdays that helped us main- are you going to do about it? Grohl with in good and bad times. tain important connections with loved ones. watched Nandi’s video, amused. But no - Pay attention to taxes. Taxes Maintaining and building strong one would have blamed him if he had are probably your portfolio’s largest personal connections are an important part of simply smiled, given the video a “Like”, expense. Using strategies that defer life and it appears that many folks are not and moved on.