What’s up financial advising that is NOT advising?

Dear Reader,
    
The Turkish Lira, generation Z, investments, loss, personality traits and tips.


Turkish Lira in free-fall. Political and economic tensions arise between the US and Turkey, as Presidents Trump and President Erdogan exchange insults, furthering damage to
Turkey's Lira and global markets. In a tweet posted at 5:47 AM PST, President Donald Trump said he had, “authorized a doubling of Tariffs on Steel and Aluminum”. In response, today President Recep Tayyip Erdogan in a speech told a Turkish crowd that, “those who believe they can make us kneel by economic manipulation, have never understood this nation at all”. As of today, the Turkish Lira has dropped 18% against the US Dollar, it now taking only 1 Dollar to buy 6 Lira. European markets are also feeling the damage, with Turkey’s biggest European lenders, including BBVA, UniCredit and BNP Paribas, all expressing concern as their stock prices fall.


Post-millennials, iGen, Gen-Z. More than 70% of Gen Zers influence their family’s spending. Their expectations are lower, they are not as confident and they are more risk-averse than previous generations in terms of attitude and behavior (today’s teens are less likely to have sex or drink). American teens are four times less likely to use cash than the general public and only use cash for 6% of their transactions.


Suggested investments. Uncertainty, fear and predictions of a turbulent market. Here are some investments to look into:

• Sectors: consumer staples, consumer services and oilfield services
• Emerging and International markets
• Commodities
• 10-year and 30-year US Treasuries

Ask yourself: Have your financial priorities changed? Is your current strategy helping you reach your financial goals? Review your financial plan and make adjustments if needed.


Loss aversion. The idea that people place more weight on avoiding losses than gains. A fundamental truth about human beings is we are more motivated by our fears than by our aspirations. Loss can feel permanent. From an evolutionary perspective, the biological penalties for losses are existential threats to an individuals survival. For gains, you live to hunt another day.


The big 5 personality traits and earnings. Openness to experience, conscientiousness, extraversion, agreeableness and neuroticism. Men being conscientious and extroverted tend to get paid more. “Agreeable” men earn significantly less, but higher IQ is correlated with higher earnings. Maybe it’s not such a bad idea to buckle down and work hard, and don’t be shy!


Tips for aspiring portfolio managers. Great fund managers are made, not born. Investment decision making is something you will always be able to improve upon, and the day you stop being interested in that improvement is the day you should find another occupation. Behavioral alpha and being more focused in self improvement than the next person is more important than being smarter than everyone else or having access to better information. Willingness to learn. Be skeptical, be critical and make up your own mind. Do not get overconfident, stay disciplined and be prepared to reflect on your personal shortcomings and deficiencies.


Financial tips to help you live your best retirement life. Understand your lifestyle expenses. Be aware of financial costs that will change in retirement. Understand how taxes impact your money. Decide when to start social security. Understand how your investments support your income needs. Budget for unexpected expenses. Be aware of how expenses change over time.



Keep Climbing,
          The Alchanati Campbell and Associates Team