How We Help Our Clients Overcome Financial Anxiety

If you've watched any financial news over the past couple of weeks, you've heard a lot about the crypto world as it has now completed the entire cycle from mania-bubble to meltdown and fraud. It’s intuitive that a big part of financial and investing success is the avoidance of financial catastrophe. And avoiding catastrophe mostly consists of avoiding manias and questionable investments as this cycle illustrates. This has been the story of every bubble that has come before and will be again for every bubble yet to come. With this boom-to-bust cycle now complete, I want to use it as an opportunity to share/review the intentionally simple three-question framework I use to, hopefully, avoid making regrettable investing decisions. Obviously, there is no framework that is guaranteed to work 100% of the time, but I think this framework can help us avoid the large majority of questionable investments. In abiding by this framework, the rule is simple: If I can't answer each question below with a confident "Yes," then I will not invest.[1] Here we go. Question #1: Do I understand the investment? (Or is it confusing?) As crypto went mainstream over the last couple of years, I felt that regardless of the time I spent reading and learning about the space, I couldn’t seem to truly understand how any of it worked, what the use cases were, or how prices could continue to rise if adoption stalled. Many have said that crypto is a solution in search of a problem. After much research, I mostly agree with that assessment though I continue to reevaluate this position. Until clarity is obvious, Warren Buffett's "too hard pile" philosophy can be helpful here. If I can't understand it, I probably shouldn't own it. ********* Question #2: Is it reasonable? (Or does it sound too good to be true?) Many investors who eventually decided to invest in crypto did so because crypto “savings accounts” were offering very high yields with minimal risk. At least, that’s how they were advertised. And due to minimal regulation in the space, there were few disclaimers offered to protect consumers from any misrepresentation of the risk that was involved.

We get asked all the time how the news will affect the markets. My answer is not what you think. (complete with recent example)

This is a sample of the bi-monthly client letter we write. Elections can be a very emotional time for investors. We look at the facts here. P.S. The market does not care what you should happen. Do not make this mistake. https://mailchi.mp/breakoutprivatewealth/what-you-dont-know-9303322

As a member of Gen X we are "busy". Uncle Sam doesn't care. That is why we use checklists. Hope this helps.