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How to start the new year off right

February 3, 2021/in Behavioral Finance, Financial Planning /by admin

Though we’re all eager to move on from last year, there are still many factors outside our control in 2021.

So, take some time now to be intentional about the kind of year you want to have and the factors that ARE within your control.

In this video, I’m going to share 3 easy steps to set the stage for a powerful year.

I’m Jamie Lima with Woodson Wealth Management, and I’m here to help you find your footing this year, even in the face of continued turbulence and uncertainty.

Here’s how:

Number One: Reflect on the past year. 2020 will be long remembered for the miseries of COVID, but let’s also take a moment to acknowledge our highs. What did you achieve despite the unexpected hardships? How did you become more resilient in the face of adversity? What have you learned to appreciate or be grateful for? As I reflect on my year, I’m grateful for my FRIENDS and FAMILY. And I’m grateful for the clients who make my professional life worthwhile. I realized last year that my true needs are much, much less than I thought they were.

Number Two: Decide what your priorities are for 2021, and why. Priorities change over time, and it’s good to check in and make sure the goals you’re working toward are still the things that matter to you. If you’re on a great path, decide how you want to make progress this year. If you’re not enjoying the road you’re on, consider this your permission slip to change direction. Think about the time and effort you’ve spent on your current path as valuable experience that will inform your new path.

Number Three: Stay flexible. We don’t know what 2021 will bring. We can hope that vaccines and medical progress will bring an end to the pandemic and a return to normalcy, but we don’t know how or when that will happen. So let’s build some flexibility into our plans.

One of the things I love about my job is helping my clients take action on goals that have meaning for them. If your priorities are changing or you’re excited about something new, please reach out to me. I can’t begin to tell you how excited I am to hear about it.

If you have a question about what I’ve discussed or you’d like to speak personally about what’s going on, please use the form below to send me a message.

I’ll respond personally.

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https://woodsonwm.com/wp-content/uploads/2020/07/logow.png 0 0 admin https://woodsonwm.com/wp-content/uploads/2020/07/logow.png admin2021-02-03 01:49:062021-02-03 01:49:06How to start the new year off right

Gamestop, memes, and market volatility

January 29, 2021/in Behavioral Finance, Investments, Stock Market /by admin
Did you hear #GameStop went viral?
 
It’s been a long (and strange) week so I figured I’d provide a quick guide to the market frenzy you’re seeing in the headlines.
Long update ahead. (Buckle up, it’s a little complicated.)
 
What is GameStop and why does everyone care?
GameStop is a brick-and-mortar video game chain that hit hard times in the pandemic. Like many distressed companies, it was targeted by short sellers betting that the stock’s price would go down.1
 
Basically, short sellers do the opposite of most investors. They try to make money when a stock’s price falls. They borrow shares from their brokerage for a fee, immediately sell them, and plan to buy them back later at a lower price when the price falls. Shorting is a strategy used by certain types of hedge funds.
 
What’s a short squeeze?
Shorting stocks is risky since any positive news or interest in a company can drive the stock’s price up. When short sellers bet wrong and a stock’s price rises, they can be forced to buy shares at higher prices to cover their losses (or pony up more collateral).
 
A squeeze happens when short sellers scramble to buy shares to cover their positions when the stock price is rising. The more investors who buy and hold those shares, the harder it is for short sellers to find shares to buy (exposing them to potentially huge losses).
 
With me so far?
 
Where does Reddit come in?
After it became clear that short sellers were betting on GameStop’s demise, the popular company became the focus of amateur traders on the popular WallStreetBets forum on Reddit, a popular community of chatrooms and forums.
 
By banding together and coordinating buying activity, these small-time traders boosted the stock’s price far above what the company’s financial fundamentals support, putting pressure on the hedge funds betting the other way.2
 
The stock went viral.
 
Why?
 
Social media chatter + free trading apps like Robinhood + bull market + new investors with time on their hands = FRENZY
Is it illegal? That’s a stretch. These armchair traders are egging each other into speculative bets, but I don’t think it rises to the level of illegal market manipulation. However, regulators might feel differently.
 
Is it bad for markets? The battle between gleeful amateurs pushing prices up and hedge funds scrambling to force prices down has led to some of the highest volume trading days on record and cost short sellers billions.3
 
Is this David vs. Goliath?
I don’t think the GameStop bubble is just about greed or boredom or euphoria. I see a powerful narrative at play.
 
I think a lot of these small traders are angry at the perception that All-Powerful Wall Street is pulling strings and using their connections to hurt mom-and-pop investors. They see this as an opportunity to stick it to the big-money pros by using their own strategies against them.
 
It’s new school vs. old school. Rebels vs. the Empire. Bueller vs. Principal Rooney. Reddit vs. CNBC.
 
So, should I be investing in GameStop?
No. GameStop’s stock is massively inflated and trading has been halted multiple times because of its meteoric rise.4 At this point, it looks like folks are piling in just to say they were there.
 
 
When the bubble bursts, it’ll be a rush to sell and many GameStop holders will end up losing most of their investment.
(It might already be happening by the time you read this.)
 
We’ve seen frenzies like this many times before. Tulip mania in the 1630s, the Nifty Fifty in the 1970s, the dot-coms in the 1990s, Bitcoin’s multiple bubbles over the last decade, etc. We’ll see more in the future.
 
Why are people angry at Robinhood?
Amidst the buying frenzy, Robinhood and other popular brokerage platforms suddenly restricted trading on several red-hot stocks, including GameStop.5
 
Protests erupted from investors, many market pros (not the short sellers, obviously), lawmakers and more.
 
Did Robinhood halt trading to appease big investors at the expense of small investors? Did they do it to protect markets from manipulation and liquidity problems?
 
I dislike the idea that a broker can just shut down trading in a security. I think it opens the door to situations where platforms prioritize one investor over another and that’s a massive conflict of interest.
 
I’m frustrated on behalf of everyone else affected by brokerage outages and difficulty trading.
 
But frankly, it’s pretty wild that a bunch of regular folks with small trading accounts can bring massive institutional investors to their knees.
 
What are the implications of this frenzy?
There’s no predicting the future, obviously, but I think a few things are likely. Most bubbles end naturally when the euphoria turns to panic, folks start selling, and the price crashes.
 
However, it’s also possible that regulators will step in if they think there’s risk to markets (or they see too many investors getting hurt).
 
I think this ride’s going to end in tears for many folks caught up in it. But I’m not sure who will be crying hardest.
 
I think markets could see some wild swings and pull back from their frothy highs, but I don’t see major risk yet.
I also think we’ll be left with some pressing questions once the dust settles.
 
Will social media traders continue to drive big market moves?
 
Do platforms have the right to arbitrarily decide customers can’t trade?
 
Are coordinated moves by small investors a danger to markets?
 
Should regulators be watching hedge funds more closely?
 
This is an evolving situation so I’m keeping a close eye on markets to see what might happen next.
 
 
1https://www.morningstar.com/articles/1019249/what-the-heck-is-going-on-with-gamestop
2https://www.marketwatch.com/story/gamestop-stock-has-another-volatile-trading-day-with-more-price-spikes-and-trading-halts-11611686411
3https://www.ft.com/content/56658052-76fe-4910-8cb7-810039753f7c
https://www.reuters.com/article/us-retail-trading-shortbets-idUSKBN29X1SW?taid=6012f37e9ac87d000147d4e3&utm_source=reddit.com
4https://www.cnbc.com/2021/01/28/robinhood-customer-sues-trading-app-over-gamestop-restrictions.html
https://woodsonwm.com/wp-content/uploads/2021/01/GameStop_ClosingPrice-01.jpg 423 601 admin https://woodsonwm.com/wp-content/uploads/2020/07/logow.png admin2021-01-29 21:40:252021-01-29 21:40:25Gamestop, memes, and market volatility

Hindsight Is 2020: 7 Ways We Should All Vow to Treat Our Money Differently in 2021

January 18, 2021/in Behavioral Finance, Budgeting, Financial Planning /by admin

2020 is a year most of us would prefer to forget. When the year started, nobody expected natural disasters of historic proportion, the COVID-19 pandemic or the residual economic hardships that followed. But with the first year of the new decade officially behind us, how can you better prepare your finances for whatever 2021 may bring? Our seven suggestions are below.

Read more

https://woodsonwm.com/wp-content/uploads/2021/01/featured_hindsight_is_2020_8_ways_we_should_all_vow_to_treat_our_money_differently_in_2021.jpg 1000 1400 admin https://woodsonwm.com/wp-content/uploads/2020/07/logow.png admin2021-01-18 17:00:112021-01-18 17:00:11Hindsight Is 2020: 7 Ways We Should All Vow to Treat Our Money Differently in 2021

Make 2021 less stressful with these financial moves

January 7, 2021/in Behavioral Finance, Budgeting, Financial Planning /by admin

2020 has been a difficult year to say the least, but 2021 is rapidly approaching. Utilize these 7 financial moves to make the coming year less stressful.

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https://woodsonwm.com/wp-content/uploads/2020/07/logow.png 0 0 admin https://woodsonwm.com/wp-content/uploads/2020/07/logow.png admin2021-01-07 18:08:322021-01-04 18:11:31Make 2021 less stressful with these financial moves

Who’s Ready to Say Goodbye to 2020? Ring in the New Year With These 3 Budgeting Resolutions

December 14, 2020/in Behavioral Finance, Budgeting, Financial Planning /by admin

It’s time for the new year, a new budget and a brighter future for you and your family. 2020 has been full of unprecedented events that may have left you feeling financially unstable, but you can make 2021 the year you finally take control of your financial life. Use these resolutions to create a realistic budget that will let you pay down your debts and give you the opportunity to put something away, while not forcing you to be too disciplined in order to make it happen.

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2020 Is (Finally!) Coming to a Close. Here Are 7 Financial Moves to Make 2021 Less Stressful

December 11, 2020/in Behavioral Finance, Budgeting, Economy /by admin

2020 has been quite the year, to say the least. With only one month left, everyone is ready to put the year behind us and try to start fresh. From the coronavirus pandemic to economic shut downs, many have felt the financial strain. If you are looking to start 2021 off on a better financial note, these seven moves will (hopefully) help make your year less stressful.

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How to talk to your kids about money

December 8, 2020/in Behavioral Finance, Children, Financial Planning /by admin

 

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

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Here are 5 expenses you can give a (socially-distant) kiss goodbye to this year due to the ‘vid.

November 27, 2020/in Budgeting, Economy /by admin

Can you believe it’s basically December? That means that the holiday season is officially upon us. Right about now we’re usually gearing up to gather with loved ones, shop for gifts and travel to see family – making it a cheerful, but expensive, time of year.

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https://woodsonwm.com/wp-content/uploads/2020/11/does_covid_have_you_staying_home_this_holiday_season_x_holiday_expenses_you_can_kiss_goodbye.jpg 1000 1400 admin https://woodsonwm.com/wp-content/uploads/2020/07/logow.png admin2020-11-27 00:03:302020-11-23 20:49:48Here are 5 expenses you can give a (socially-distant) kiss goodbye to this year due to the 'vid.

Understanding Your Risk Tolerance

November 23, 2020/in Behavioral Finance, Financial Planning, Investments /by admin

One of the very first things we discuss with our clients is risk tolerance.

How do you handle risk?

How do you feel towards money? And, so on.

This is an incredibly important part of the financial planning process and it helps us do a better job of providing #fiduciary advice.

Here are 5 things you can do to better determine your own unique tolerance for risk when it comes to your investments. Want an investment Personality Test?

Just reach out, and we’ll be happy to send one your way.

 

 

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https://woodsonwm.com/wp-content/uploads/2020/07/logow.png 0 0 admin https://woodsonwm.com/wp-content/uploads/2020/07/logow.png admin2020-11-23 19:50:112020-11-23 19:50:11Understanding Your Risk Tolerance

Fight with your desires for a debt-free life

November 10, 2020/in Behavioral Finance, Budgeting, Financial Planning /by admin

Guest post by: Bethaine Parker of Debt Consolidation US

 

Getting into and creating tens of thousands of dollars of debt is easy but getting out of it can be a silent killer and take decades to pay off.

When you make the last payment and become debt free, you may want to reward yourself. The problem occurs when you’re not attentive; it’s easy to slide back into the same spending habits and you may end up right back where it started.

Here are a few tips that may help you to stay on track and keep you out of debt for good.

Read more

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