We can use different mindsets for different conditions
There are a number of personality types. One type is the transactional individual. A highly transactional person seeks mostly transactional relationships and interactions. And they seek out “the process” because they like to understand a system or a network and leverage it. Like many things, this is a spectrum. Some people are somewhat transactional and some are purely transactional. A transactional personality leads to a transactional mindset. Typically, a transactional mindset means you are looking for something in return. This for that.
There are pros and cons to transactional mentalities and relationships. Perhaps you are not very transactional, but you have a transactional relationship with someone. For instance, “When Mike and I get together, we drink a coffee and talk about sports.” It’s a true friendship, but it’s transactional. So just because an individual’s personality, or a particular relationship, is a this-for-that one doesn’t make it good or bad. It is what it is.
But if you were in a sales position, you would be wise to add transactional skills.
Beware though: If you are not a transactional person naturally, then there is a certain amount of friction that occurs when you act transactionally. Decide if that’s okay for you.
You’re almost certainly adding skills and participating in the workplace in ways that create some friction for you already. When there’s too much friction though, you want to quit your job or change your field. But having a transactional skill set can be valuable when under the right conditions. Most times people think of personalities as set, and that may be correct. But you can certainly add skills that transactional people naturally have.
So what’s “The Investor Mindset” then?
The Investor Mindset, briefly, is what investor-types use. You may already know the people in your life that think and act like investors naturally. Some of their characteristics are: analytical, delayed gratification and thinking long, re-investing, builders or curators, value-measurers, value-adders.
These are pretty positive characteristics. Again, like many things, it is a spectrum. If you are so analytical that you cannot make a decision, that is bad. You don’t want “paralysis by analysis,” as they say.
Another thing to watch out for is delaying gratification too much. Someone who overdoes this may become unhappy. Perhaps it is useful when managing money, but it isn’t great if you overuse it in your life. What if you never eat a cookie? It sounds funny when talking about cookies, but be careful about persistently delaying gratification. Discipline is great, but find appropriate treats for yourself too along your journey.
So whether the previously described investor characteristics come naturally to you or not, you want to treat it like a skill, and use it when appropriate.
At Arena Investor we use “The Investor Mindset” to help us perform our jobs well serving financial planning and investment management clients, as well as providing financial education.
Simply put, The Investor Mindset treats almost everything like a portfolio and only things that make that portfolio better should go in it. At Arena Investor this can mean: stocks, crypto, ETFs, mutual funds, bonds, real estate and so on.
But The Investor Mindset can be used at large too – well beyond finances. For instance, it can also apply to nutrition, fitness, friendship, your subscription TV “watch later” list, and on and on. Investor-types don’t naturally take-on things that don’t make their portfolio better. At a minimum, they try to decide if it is on-par with what they already like, or better. If it is sub-par then good luck talking them into doing it.
A Lot of People Can Relate to This Already
Believe it or not, a lot of people can relate to this as sports fans. Good luck convincing a Cleveland Browns fan that the Arizona Cardinals vs the Seattle Seahawks fits their “entertainment portfolio.” They may watch because they like football at large, but they aren’t truly invested in that game. It isn’t as good or better than their AFC North matchups against the Pittsburgh Steelers, Cincinnati Bengals, or Baltimore Ravens. They believe those matchups do make their entertainment portfolio better though.
The suggestion is this:Add “The Investor Mindset” to your life. You don’t have to re-create yourself and try to be someone you’re not though. Simply start to see the world with Investor-tinted glass a bit more each day.
It can help you get started as an investor too
Perhaps you’ve wanted to invest for a long time now. But you are afraid to get started. With The Investor Mindset realize that an empty portfolio would be made better with one quality company in it.
Now you’ve started.
And you’ve used The Investor Mindset – you upgraded your portfolio!
Do that a second time, and continue until you are diversified.
Remember: You only want to put stocks into your portfolio that make it better. So say you want to build a portfolio of 10 stocks. Well at the beginning you are really just laying a foundation. Don’t lay a crappy foundation.
If you wouldn’t leave the portfolio alone for 5 years and be happy with your picks with minimal intervention (say, less than once per quarter), then do not add that stock.
But remember, while we say stock we really mean company. You should be happy with the company you pick for 5+ years. You should believe in it, the work it does, the role it plays, and be able to sleep at night. That way, you will get through the ups and downs that The Business Cycle (here) intrinsically experiences.
Be sure to think long when you build the foundation. You wouldn’t swap out parts of your foundation every day, week, or month would you? Perhaps over time you make an upgrade though because it makes sense.
“The Investor Mindset” is large and encompassing. So is a transactional mindset. But you can use the skills that naturally come with those mindsets to your advantage. And you don’t have to become a different person to do it. Pick something in your life to try out The Investor Mindset on. At the start of the new year health and wealth are at the top of many people’s minds already. Maybe choose one of those. Nutrition is a great way to add it to your life: Does this thing I’m about to eat or drink make my body-portfolio better or worse?
Note: There’s a key difference with nutrition though in that a splurge for an hour on a Friday night isn’t as long-lasting as a financial splurge or investing splurge – that money is spent indefinitely.
Built for The One in the Arena
Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.
You’re the Hero.
We’re the Guide.
Announcement: Arena Investor Partners with Elements
We are thrilled to announce that Arena Investor is expanding our service offerings with a cutting-edge integration into our tech stack: Elements (getElements.com). This addition is set to transform the way we serve our clients in financial planning, investment management, and through our unique "Financial Health Monitoring and Alerts" service.
Why Elements?
Elements is a leading financial monitoring and planning tool designed to simplify the complexities of managing wealth. It provides a streamlined and user-friendly experience, enabling clients to see the bigger picture of their financial health at a glance. With Elements, you gain a comprehensive view of your financial status, making it easier to make informed decisions and track progress toward your financial goals.
Value for Financial Planning Clients
For our financial planning clients, Elements offers a robust platform to track your progress in real-time. Whether you're focused on building wealth, planning for retirement, or managing day-to-day finances, Elements helps you stay on top of your financial goals. The tool allows you to monitor key financial indicators, such as liquidity, net worth, and debt levels, ensuring that you always know where you stand. By leveraging Elements, Arena Investor can provide more personalized and proactive advice, helping you navigate life's financial milestones with confidence.
Enhancing Investment Management
For our investment management clients, Elements provides an additional layer of insight into how your investments align with your overall financial health. The integration allows us to seamlessly connect your investment portfolio with other aspects of your financial life, ensuring that your investment strategy is aligned with your broader financial goals. With Elements, we can more effectively manage risk, optimize your asset allocation, and keep you on track toward achieving long-term growth.
Financial Health Monitoring and Alerts
One of the most innovative features of Elements is its ability to deliver timely and actionable insights through our "Financial Health Monitoring and Alerts" service. This integration enables us to keep a close eye on your financial health, alerting you to potential issues before they become problems. Whether it's identifying opportunities to optimize your cash flow or providing early warnings about financial risks, Elements empowers you to take control of your financial future.
Looking Ahead
At Arena Investor, our mission is to provide you with the best tools and advice to achieve financial success. The integration of Elements into our tech stack is a significant step forward in fulfilling this mission. We believe that by combining the power of Elements with our expert financial planning and investment management services, we can offer an unparalleled client experience that supports your financial journey every step of the way.
We are excited about the enhanced value this integration will bring to your financial planning and investment management needs. If you have any questions or would like to learn more about how Elements can benefit you, please don’t hesitate to reach out to us.
Thank you for your continued trust in Arena Investor.
Truly,
The Arena Investor Team
Built for The One in the Arena
Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.
You’re the Hero.
We’re the Guide.
Summary of the 2024 Year-to-Date: Economy and Markets
Let’s dive in:
Cryptocurrency Market
- Bitcoin: Bitcoin has been a standout performer, reaching new all-time highs and showing a year-to-date increase of approximately 42.23%. This surge is attributed to several factors, including the anticipation and eventual approval of Bitcoin ETFs, which has brought a wave of institutional investment into the crypto market. The Bitcoin halving event, expected to reduce the supply of new Bitcoins entering the market, has also contributed to its price appreciation.
- General Sentiment: The crypto market has seen increased mainstream acceptance, with a growing correlation between Bitcoin and traditional financial markets like the S&P 500, indicating its integration into broader investment portfolios. The market's expansion is further evidenced by the projected growth of the worldwide cryptocurrency market, expected to hit $51.5 billion in 2024.
Real Estate
- Market Dynamics: Real estate has experienced mixed fortunes. Globally, the market is projected to grow, with residential real estate dominating. However, in terms of performance, real estate ETFs have seen declines, with a notable decrease of about -4.03% year-to-date. This could be attributed to shifts in work patterns, with remote work reducing demand for commercial spaces in urban centers, while suburban and rural properties see increased interest.
- Cryptocurrency Influence: There's an emerging trend where cryptocurrencies are influencing real estate transactions, with properties being priced in or purchased with digital currencies. This integration suggests a future where real estate might be more closely tied to the crypto market's volatility and growth.
Traditional Markets
- Stock Markets: The S&P 500 and other major indices like the Dow Jones and NASDAQ have hit all-time highs, reflecting a robust economic recovery and optimism. Sectors like technology, communication services, and utilities have led the gains, driven by technological advancements, particularly in AI, and the ongoing digital transformation across industries.
- Sector Performance: Technology stocks, buoyed by AI and big data, have seen significant increases, with companies like NVIDIA leading the charge. Conversely, sectors like real estate and long-term bonds have underperformed, reflecting broader economic shifts towards technology and away from traditional asset classes.
Economic Context
- Inflation and Interest Rates: Inflation has shown signs of cooling, influencing expectations around Federal Reserve actions. This has led to a cautious optimism in markets, with investors balancing between growth stocks and more defensive sectors.
- Global Influences: The economic performance has been influenced by global factors, including geopolitical tensions and economic policies, which have introduced volatility but also opportunities, especially in sectors like technology and commodities.
Conclusion
The year-to-date performance in 2024 highlights a market adapting to new economic realities, with cryptocurrencies playing a more significant role, not just as an investment but as a transactional medium in real estate. Traditional markets continue to thrive, driven by technological innovation and economic recovery, though with a nuanced performance across different sectors. This landscape suggests a diversification of investment strategies, embracing both the digital asset boom and traditional market
Built for The One in the Arena
Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.
You’re the Hero.
We’re the Guide.
Morning Market Preview for September 13th, 2024
Arena Investor is modern planning and investing built for the busy, hardworking professionals who know their money needs more attention but don't have the time, or simply want better work-life balance
Good morning, Heroes!
Here’s your Morning Market Preview for September 13th, 2024
Read, or listen relaxingly for a few minutes – whichever you prefer!
Key Economic Reports
- Sentiment: The preliminary consumer sentiment report is released at 10am this morning. From the University of Michigan the consumer sentiment report is considered the go-to resource for measuring consumer feelings about the market.
Key Events & Earnings Reports Today
- There are no key earnings reports on Friday
- The Goldman Sachs Communacopia & Tech conference wrapped up Thursday evening. Here’s a couple key points:
- Excitement Over AI and Tech Innovation: There was considerable interest in AI, with some suggesting that while AI might not revolutionize industries overnight, its impact will be profound over time. This perspective was shared by industry leaders like Josh Silverman from Etsy, indicating a nuanced view on AI's role in the future of work.
- Anticipation for Economic Easing: Financial analysts like Ashish Shah from Goldman Sachs expressed optimism about an upcoming easing cycle, suggesting a positive outlook for market opportunities due to expected rate cuts. This reflects a broader economic sentiment that could influence tech investments.
- Excitement Over AI and Tech Innovation: There was considerable interest in AI, with some suggesting that while AI might not revolutionize industries overnight, its impact will be profound over time. This perspective was shared by industry leaders like Josh Silverman from Etsy, indicating a nuanced view on AI's role in the future of work.
The Fed
- Meeting on the 17th and 18th, all investor eyes have turned to a quarter percent rate cut. After Thursday’s PPI numbers, thoughts of a half percent rate cut have mostly stopped, although some investors would still prefer that. Few feel the Fed holds and makes no cut.
Stocks
Year-to-Date Performance:
- Up Most: IT takes over the top spot, now up 24.66% this year. And Utilities is in a close second at 21.27%.
- Down Most: Materials improved this week and is up 6.04% this year, holding the second lowest spot. The lowest performing sector this year is Energy, which is up just barely at 0.46%.
5 Day Moving Average: This is the percent of Large Cap stocks above their 5 day average
- Up Most: IT continues to have a great week with 84% of their Large Cap stocks above their 5 day average. And 81% of Real Estate Large Cap stocks are above their 5 day average currently.
- Down Most: Financials have had the second lowest performance the last 5 days with 41% above their 5 day average. Energy is down the most with only 23% above their 5 day average.
Crypto
- Bitcoin: Up to about $57,609 at the open, up a ton (38.3%) this year.
- Ethereum: Opening at about $2,342, and staying positive at 2.37% this year.
- Top Gainers Recently: Mana and XRP have had a great 24 hours, up 4.09% and 4.07%, respectively.
Bonds
- 2-Year Treasury Yield: Down another 49 basis points to 3.603%, continuing its yield decline this year.
- 10-Year Treasury Yield: Down 34 basis points to 3.649%, also continuing its yield decline this year.
Gold
- Open Price: Up again in the last day, now at $2,562 per ounce, having gained a hefty 24.25% this year.
Real Estate
- 30-Year Fixed Mortgage Rate: Up just a bit over the last day, now to 6.15%. But the rate has dropped about 7.8% this year.
- Trends: Real estate is local, and each market is seeing different specific conditions. Some report high-end home sales staying strong while others report a weakening there and an improvement in affordable housing sales.
Geopolitical Aspects
- Global markets are reacting to weaker economic data from China and rising energy prices in Europe. These developments are causing volatility across global equity and commodity markets.
Built for The One in the Arena
Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.
You’re the Hero.
We’re the Guide.
P.S.
Some Simple Explanations of Key Concepts to Level Up Your Financial Education
Federal Reserve (The Fed): This is the central bank of the United States. It controls monetary policy, including interest rates, to manage inflation and employment. Lowering rates can stimulate borrowing and spending, potentially boosting the economy.
Stock Market Sectors: The market is divided into sectors like technology, healthcare, and energy. Each sector performs differently based on economic conditions, policy changes, and technological advancements.
Bonds and Yields: When you buy a bond, you're lending money to the government or a corporation. The yield is the return you get. Higher yields can mean higher risk or expectations of higher inflation.
Understanding these aspects of the investing arena can help investors in making informed investment decisions.
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We’re the Guide.
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