Your Investments – Current and Future Considerations


By Maurice Stouse, Branch Manager and Financial Advisor

Maurice StouseThe world economy has slowed over that past year, wages have increased in the U.S., there have been disruptions to trade and most recently, concern for the public’s health. The uncertainty has brought significant volatility to stock markets around the world.

As an investor it is always good to take caution and consider several things with respects to your goals and investments. The first would be is it indeed different this time? Market uncertainty comes in a lot of different shapes and sizes. Investors have seen it before and will see it again. The words of Sir John Templeton, who first uttered this many decades ago are something to think about. In other words, uncertainty is not different although the causes may be. Next, how much attention should you give the daily if not hourly updates on all the bad news? Another famous investment manager, Peter Lynch suggested that in the volatile times, try not to pay too much attention to what he called “background noise”. In other words, stay focused on the long-term plan, assuming your plans are long term. Staying on course with a certain strategy is most often been the best way to go unless you need these funds now or need to depend on these to live or for an emergency.

Next would be to reflect on your belief in commerce long term. Will the consumer continue to consume? Will there be more and better goods and services and will commerce continue? And lastly, in the most volatile times not to give up hope when things seem most dire.

Interest rates appear to continue to soften and the Federal Reserve continues to lean on the tools that it must maintain liquidity and encourage borrowing and commerce. The one variable is that the consumer, be it an individual or a business probably won’t invest and spend if they are scared. That hurt the recovery badly in the 1930s. So, it probably is not different this time but perhaps investors can research the history of times like these and act or react accordingly.

If you are investing for retirement, do you have a goal or a number in mind? There is a plethora of tools that advisory and brokerage firms make available for you to chart your way to retirement. There are also a couple of simple rules of thumb that many retirement investors have used over the years and perhaps these can help you at times like these.
Number one: What is a tool to help you solve for how much of a retirement nest egg you will need? A very simple and popular one is the 25 times rule. In other words, what do you think you will need or want to live on in retirement per year by way of income? Take that total and multiple it by 25. As an example, if you need or want to live on $100k per year then you would need to have saved $2.5 million (100K X 25). You would still want to avail yourself to planning tools, but this is a way to do a quick check or quick assessment in your mind.

Number two: The rule of 72. That is, at a given rate, how long does it take money to double? An example would be if you can average 6% a year, a given amount invested would double in 12 years (72 divided by 6 = 12). Put another way, if you started with $10k and average 6% per year, that would be $20k in 12 years, $40k in 24 years, $80k in 36 years and so on. Young people and investors with a long-term time horizon would do well to think about this.

Lastly, as you plan and assess and reassess, do you keep a balance sheet for yourself? A balance sheet is a great way of knowing everything you own (stocks, bonds, cash, home, real estate, etc.) and everything that you owe and ultimately what your net worth is. Many investors update this often to help them keep moving on track to their goals. An income personal income statement is also a good idea to constantly keep top of mind.

Maurice Stouse is a Financial Advisor and the branch manager of The First Wealth Management and Raymond James and he resides in Grayton Beach. He has been in financial services for over 33 years. His main office is located at First Florida Bank, a division of the First, A National Banking Association, 2000 98 Palms Blvd, Destin, FL 32451. Branch offices in Niceville, Mary Esther, Miramar Beach, Freeport and Panama City, Pensacola and Tallahassee. Phone 850.654.8124. Raymond James advisors do not offer tax advice. Please see your tax professionals. Email:
Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC, and are not insured by bank insurance, the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risks, including the possible loss of principal. Investment Advisory Services are offered through Raymond James Financial Services Advisors, Inc. The First Wealth Management First Florida Bank, and The First, A National Banking Association are not registered broker/dealers and are independent of Raymond James Financial Services. Views expressed are the current opinion of the author and are subject to change without notice. Information provided is general in nature and is not a complete statement of all information necessary for making an investment decision and is not a recommendation or a solicitation to buy or sell any security. Past performance is not indicative of future results.