Market Recap for August 12-16, 2024

‍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.

Good morning, Heroes!

Here’s your Morning Market Preview for September 3, 2024
Read, or listen relaxingly for a few minutes – whichever you prefer!

Key Economic Reports:

• ISM Manufacturing PMI for August is due, which could influence market sentiment regarding manufacturing activity. A higher than expected PMI might bolster confidence in economic recovery.

5 Key Earnings Reports Today:

• Broadcom (AVGO) - Broadcom is expected to report its fiscal third-quarter results after the market closes. Analysts are looking forward to this tech giant's performance, especially given its significant acquisitions and the ongoing demand for its products in various technology sectors.
  
  
• Dick's Sporting Goods (DKS) - Ahead of Wednesday's open, Dick's Sporting Goods will release its second-quarter results. The retail sector's health, particularly in sporting goods amidst consumer spending trends, makes this report crucial for insights into consumer behavior.
  
  
• DocuSign (DOCU) - DocuSign's earnings are anticipated after the market close. Given the shift towards digital signatures and electronic document management, its performance could reflect broader trends in digital transformation and remote work environments.
  
  
• NIO Inc. (NIO) - NIO, a key player in the electric vehicle market, especially in China, will report its earnings. The EV sector's volatility and NIO's strategic moves in a competitive market make this report significant for investors tracking the automotive industry's shift towards electric.
  
  
• Zscaler (ZS) - Zscaler, known for its cloud security solutions, will report its earnings. With cybersecurity being a top priority for businesses globally, Zscaler's performance could influence investor sentiment towards cloud and security stocks.

The Fed:

• No direct actions or statements from the Federal Reserve are scheduled for tomorrow, but market participants will be analyzing recent comments from Fed Chair Powell, particularly his stance on maintaining economic strength.

Stocks:

• Pre-market futures suggest a mild bearish sentiment, with S&P 500 E-Mini futures slightly down. Investors might be cautious, awaiting economic data and earnings reactions.

Bonds:

• The 10-Year T-Note futures indicate a slight decrease, signaling potential increased yields, which could affect borrowing costs across various sectors.

Crypto:

• Bitcoin hovers around $58,500, facing a bearish September trend. Regulatory developments include SEC warnings to FTX and Nasdaq's interest in Bitcoin options. Ethereum experiences its worst month in years, while crypto funds see outflows. Global markets show mixed sentiments with Japan supporting Web3 and Brazil's crypto moves.

Gold:

• Gold prices are noted at $2,535, with stability in crude oil possibly influencing investor decisions towards safe-haven assets like gold.

Real Estate:

• No specific real estate market updates for tomorrow, but general economic health indicators like manufacturing PMI could indirectly affect real estate through interest rate expectations.

Geopolitical Aspects:

• Geopolitical tensions, particularly the Iran-Israel escalation and ongoing Ukraine conflict, have heightened market volatility. Investors are pulling back from risky assets, with oil prices reacting to potential supply disruptions. The U.S.-China relations add to the uncertainty, influencing global trade and investment flows, while elections worldwide could sway economic policies and market sentiments.

Worldwide Market News:

• Asian markets opened mixed, which could influence U.S. markets as investors gauge global economic health. Positive cues from global markets might support a cautious optimism in U.S. trading.

Understanding these concepts helps you see why markets move the way they do, turning the financial news from confusing noise into a story about the world's economic pulse.

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.

In personal finance, mastering the art of saving is as crucial as earning. The "Savings Rate" is a pivotal concept that sheds light on how much of your income you're setting aside versus how much you're spending. This guide explains what a Savings Rate is, why it's important, and how working with an Arena Investor Advisor can significantly enhance your ability to save and plan for the future.
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What is Savings Rate?

Savings Rate, in simple terms, refers to the percentage of your income that you save. This includes contributions to retirement accounts, savings accounts, and other forms of financial reserves. To calculate your Savings Rate, you divide your savings by your total income and then multiply by 100 to get a percentage. This figure is crucial for assessing your financial health and planning long-term goals like retirement, buying a home, or funding education.

The Significance of Understanding Your Savings Rate

1. Financial Health Assessment:

Your Savings Rate is a direct indicator of your financial stability and discipline. A higher rate typically suggests better financial health, as it indicates not only the ability to save but also the potential to grow wealth over time.

2. Budget Optimization:

Knowing your Savings Rate helps in refining your budget. It identifies how much of your income is allocated to expenses versus savings, providing insights into possible adjustments to increase your savings capacity.

3. Goal Planning:

Setting and achieving financial goals is more feasible when you understand your Savings Rate. It helps in forecasting how long it will take to reach your goals based on your current savings habits.

How an Arena Investor Advisor Can Help Optimize Your Savings Rate

Personalized Savings Strategies:

An Arena Investor Advisor doesn’t just look at your Savings Rate; they analyze your entire financial situation to tailor a savings strategy that aligns with your goals. Whether it’s adjusting your budget to increase your Savings Rate, choosing the right financial instruments, or finding tax-efficient ways to save, your advisor is equipped to guide you.

Goal Alignment:

Your advisor helps ensure that your Savings Rate is aligned with your short-term and long-term objectives. Whether you're saving for a vacation, a new home, or your retirement, they can set realistic milestones and a timeline based on your current rate and adjust as needed.

Education and Empowerment:

Understanding the nuances of personal finance can be challenging. Arena Investor Advisors are committed to educating you about key concepts like Savings Rate, compounding interest, and the impact of inflation on savings. This knowledge empowers you to make informed decisions and take active control of your financial future.

Regular Monitoring and Adjustments:
Financial situations change, and so should your savings strategies. An Arena Investor Advisor continually monitors your financial health, including your Savings Rate, and makes adjustments to your plan based on changes in your income, lifestyle, or financial goals.

Technology Integration:
Using tools from platforms like Elements, Arena Investor Advisors can provide detailed visualizations of your finances, including Savings Rate assessments. This integration allows for a clear understanding of where you stand and what steps you need to take to improve your financial health.

All In All

Your Savings Rate is more than just a number; it’s a reflection of your financial habits and a predictor of your financial future. By understanding and optimizing your Savings Rate with the help of an experienced Arena Investor Advisor, you can enhance your ability to save efficiently, meet your financial goals, and secure a stable financial future.

In today’s dynamic economic environment, having a proactive savings strategy is essential. Working with an Arena Investor Advisor ensures that your savings efforts are as effective as possible, helping you build a solid foundation for whatever financial goals you may have. Whether you're a novice in personal finance or looking to refine your savings approach, an advisor can provide the expertise and support you need to navigate your financial journey successfully.

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.