Keep Calm and Carry On: Smart LGBTQ+ Investing During Market Volatility

Episode 104: Audio automatically transcribed by Sonix

Episode 104: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker 1:
Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker 2:
Welcome to Take Pride in Retirement, the podcast dedicated to helping members of the Lgbtq+ community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom so you and your loved ones can have the retirement you've always dreamed of. A retirement you can take pride in, no matter who you are, where you're from, or who you love. So now let's start the show. Here's Matt McClure.

Speaker 1:
Well, hello there and welcome to another edition of Take Pride in Retirement. Matt McClure here with you, your host, your advisor, your friend, your pal and your confidant. Yes, I am all of those things. And I really do appreciate you taking the time to just take the time to spend some time with little old me here on the show. If you're watching on YouTube, hello, on YouTube land, I appreciate you as well. Just take the moment just literally like 1.5 seconds maybe to click below to subscribe to the channel. Like the video comment as well. I love it when I see listener and viewer comments and yeah, just do all those things. And I would really appreciate it because that really helps the show grow. And I want it to be like a movement. I know that's sort of cliche sounding and all that, but um, you know, it's me. I'm a cheesy kind of a guy and a cliche kind of a person sometimes. So I would say if you would do those things, it would help me and help turn what we've got here with the podcast into a movement from a moment to a movement. How's that? Um, so this week, this, this, uh, this couple of episodes this week, we're focusing on kind of springing into growth. And I wanted to start out by saying, number one, go to take pride in retirement. By the way, you can, you can schedule a free consultation there.

Speaker 1:
And I'll mention that as we go along with the show, uh, today. But one thing that I wanted to mention as we start off with, you know, we've had a lot of market volatility here recently, and there have been a lot of, you know, different kind of factors that have led to that, right? There have been there's been upheaval. Obviously, there's been this the war in Iran. There's all this stuff. Even before that, there were all these other tariffs and all the things led to a lot of market volatility. Over time, though, the markets will recover, the markets will go up. That's what history has taught us and shown us. And so what we can do is keep calm and carry on. And so that's going to be a little bit of a theme of the show here today. Keeping calm and carrying on. Um, as we talk more about growth in the springtime. Springtime is a period of growth and renewal. And so it's a good time, just even mentally for us to renew our focus on our finances. So that's a lot about what the show is going to be about today. And um, yeah, as I always say, no matter who you are, where you come from, who you love, how you identify or how much money you have, you deserve a retirement you can take pride in. Period. And that's the point of the show.

Speaker 1:
It's why I do the show. And so that is, um, that's why I want you to be a part of the show and a part of this movement that we've got going. And so if you would like some individualized help, you know, I do the show, which is, uh, you know, for educational purposes here to, to give general information to you, hopefully sparking something in you to make a change in your retirement plan. And hopefully that works. And also, when I meet with individuals one on one, that's when I act in a fiduciary capacity, right? I act as someone who is acting in that person's best interest. That's what I am bound to do legally, morally, the whole thing. And it's, it's how I would, you know, behave anyway. But it's also, you know, I'm held to that standard both legally and morally. And so when I meet with you one on one, I can and can actually address your personal issues, your personal financial struggles, that you may want to overcome, some changes that you want to make all the things and make those adjustments so that you can have the retirement you can take pride in. Period. End of discussion. Right. That's what I do. It's what I love to do, and I want to help you plan and build a retirement that works for your unique situation, no matter who you are. 855246 9211 is the number (855) 246-9211, or you can go on the website.

Speaker 1:
Take pride in retirement. Take pride in retirement.com. Once again is that website. So we're going to start out today talking a little bit about what I mentioned a moment ago, avoiding emotional investing. We're also going to talk about the power of making small changes to our retirement plans and how that can, you know, really you don't have to do a big overhaul to make a big difference in your retirement plan necessarily. It all depends on your individual circumstances, right? One step, one step at a time. Let's let's don't try and do the overhaul all at once necessarily. Um, and so, you know, the power of those incremental changes. We'll talk about that some protection strategies that are specific to the Lgbtq+ community. And then we're going to wrap up with a couple of spring cleaning things. You know, did a spring cleaning episode a couple of weeks back, but I want to just do kind of a, maybe a little bit of a recap of that, maybe a couple of new things that we'll throw in. But since we're still on the spring sort of fling, I guess. Uh, so anyway, that's what we're going to talk about. And we'll start off with that conversation about emotional investing. I get on this kick, um, quite a bit just because of the market volatility that we've had recently. I started off by talking about that.

Speaker 1:
And this is why market volatility is real. It rears its ugly head. Um, on occasion. And right now it's been rearing its ugly head more often. So that's something to keep in mind. Number one. Number two is that it can be an emotional time when you see the ups and the downs and you're like, I don't even want to look, which is probably the best, best case scenario. Just don't look at what's going on. And so, you know, check your retirement accounts or anything like that on a, on a down day in the markets. Just don't even even look at it. Um, that's probably the best for your sanity at least. But you know, leave that to me as an advisor, right? I'll do the looking for you. Um, give me all give me all the ulcers. Um, but I think to keep in mind is it can be an emotional time, but don't let those emotions get the best of you. Right. Discipline will often outperform reaction and especially overreaction, right? And for LGBTQ plus retirement planning, those emotional reactions can be one of the biggest threats to any long term progress that you're making, especially if you already face wage gaps, higher lifetime costs as well. Like we talked about, if you missed the last episode, go back and listen to it because, you know, we talked a lot about that and about, um, a lot of the issues this time around.

Speaker 1:
It's, it's more about taking action and overcoming those. So, um, why do emotions affect our investment decisions? Well, it's especially when you're trying to save and plan for retirement. You've worked so hard and done so much to save, to plan to, um, you know, invest to make sure that you are putting that money away for your, what should be, uh, to use a cliche, your golden years, right? And so you've got all of this tied up in the market. And so then you're like, oh, this is my future that's on the line. So naturally that's going to trigger a strong reaction. You know, we're kind of wired to respond as human beings. It's that fight or flight, right? You're quickly responding to a perceived threat or a perceived opportunity, right. And that can lead to bad investment decisions a lot of the time. And, you know, based on kind of those short term feelings that can really affect your long term strategy. Um, and, and just throw it out the window for one bad day in the market. And that's not what you want to do. And so if you are investing with emotion, commonly, you'll find yourself maybe panic selling during a downturn or chasing high performing investments after rallies. And so then you're kind of doing the opposite of what you should do. You're supposed to buy low and sell high, right? That ends you end up if you fall into that scenario, you're buying high and selling low.

Speaker 1:
And that's not what you want to do. And if you move too much money into cash during uncertainty, that's another thing that can really hold you back. So you know, these these reactions according to a Dalbar investor behavior study, those reactions can really interrupt long term growth strategies, really make it a lot harder for your portfolio to cover when the market does rebound. So don't sell low and buy high. That's the that's the moral of the story here. But there are some special considerations for our community as well. Lgbtq plus workers, um, have experienced income instability and employment instability over the years. And that creates a lot of fear. You know, people like myself face workplace discrimination in the past are more prone to do things like panic selling. And at least in my experience during downturns, out of fear, they're going to lose their jobs. They're going to need that immediate cash. That is one reason right there to also have an emergency fund. If you're an Lgbtq+ individual, I would especially encourage you to have an emergency fund standing by just in case of that employment discrimination, just in case you face, you know, something that's that's even more common, like, uh, like the Hvac goes out in the house or you need a big plumbing repair, you've got a big leak or something like that.

Speaker 1:
Those are scenarios that happen every day and you need that safety net. And because you have maybe earned less than your straight or cis counterparts over the years, and or you don't have family financial support as an Lgbtq+ person. Um, then you as an investor may feel more vulnerable during that market volatility. And that leads to overly conservative choices that limit growth or again, the panic selling. Um, healthcare costs, uh, you know, I mean, a lot of people in the community will end up over their lifetime paying more in healthcare costs, uh, because of different, you know, health issues that affect the community. And so that can cause Lgbtq+ investors to make emotional decisions about their portfolios, about the allocation in inside that portfolio and just make bad decisions. And so one thing that I, if you take nothing else away from this part of the discussion, Listen to this. Timing the market is so hard. It is so difficult, you know. Even professional investors struggle to predict short term market movements. Maybe longer term trends, sure, but short term market movements, day to day, that kind of thing. You know, trying to jump in and out of the market, you're going to miss some of the strongest recovery periods and those historically occur after a downturn. So let's let's think about that for a minute. You've got money in the market. There's a big downturn just for a couple of days, let's say maybe even just one day.

Speaker 1:
And you're like, oh my gosh, I don't know, where's the bottom of this going to be? Sell, sell, sell. I've got to get out. Then you sell. A couple of days later, the market boom jumps way back up and is even above where it was. Well, what have you done? You've locked in your losses. You've sold those shares at a loss and you've missed out on all that recovery. So instead of investing more and buying shares at a big discount and then really reaping the benefits of that recovery that came, you've just locked in those losses. So staying invested, staying, you know, um, disciplined has historically produced over the long term stronger outcomes than frequent trading. That's just driven by your emotions from day to day or moment to moment. And so as an LGBTQ plus investor, what does discipline look like? Well, you focus on the long term strategy rather than the short term headlines, right? That includes maintaining a diversified portfolio. Reduce the amount of risk that you have inside your portfolio, especially as you get closer to retirement rebalancing periodically to maintain your target allocations. Those kind of things drift. You know, you might have a certain percentage that's allocated here and a certain percentage that's allocated here well after market movements over, you know, several months, things can drift and you might have too much allocated in one place after that.

Speaker 1:
So, you know, rebalance that portfolio as you go along. Keep your long term goals in focus. Eyes on the prize, right? Build a larger emergency funds. That can be a good thing. You know, I mentioned the emergency fund a minute ago, and usually I'll recommend at least like six months of expenses in an emergency fund, go 9 to 12, you know, 9 to 12 months of emergency expenses. And that can even be something that will help you reduce the emotions, right, to, to sell during those downturns. Work with an advisor who understands your concerns. Work with someone who's a member of the community and somebody who can provide guidance objectively to you, but also in an understanding way and avoid those reactionary decisions. You know, during market swings, those could derail decades of progress that you've made. You've saved, you've invested, you've done all these things right over the years, and now all of a sudden you make an emotional decision and you wipe out any gains that you've had. You lock in those losses. Like I was talking about. The Human Rights Campaign says nearly half, 46% of Lgbtq+ workers report feeling anxious about job security, compared to just a little over a quarter of non Lgbtq+ workers. So with that worry, with that anxiety, with that stress, why add something else to it, right? Let's take away as much of that stress as possible.

Speaker 1:
So when markets feel volatile, avoid making those major investment changes immediately. Give it time. Review your strategy. Work with me. I can help you do that. Go to take pride in retirement.com. We'll get you a strategy that is built to last, not just for the short term, but for the long term as well. Take pride in retirement.com is the website. Take pride in retirement.com or 855246921185524692 11. So I mentioned this to, you know, we're talking a lot about, um, you know, market volatility and, and reviewing things and, uh, you know, sort of building that momentum in the springtime where you've got this time to sort of focus on, on renewal and all that. So important to do all of those things. But I gotta emphasize this, that you don't have to necessarily overhaul everything. First of all, if it sounds overwhelming, a couple of things you can do about that. One would be to work with a professional, work with an advisor. I can help you out and it doesn't have to be overwhelming. I can sit down and objectively look at everything and say, okay, let's let's recommend this, that or the other, and we'll work together to come up with a plan that works for you. That's what it's all about. So that's number one. Yet. Number two is, you know, you don't have to make a big overhaul of everything to begin with because the little things, the small changes, incremental changes can make a huge difference.

Speaker 1:
You know, people think of improving their financial future and they think, oh, I got a I've got to completely renovate top to bottom. You know, just had somebody out looking at the house to, to look at maybe doing some renovations. And the decision is like, okay, should we go with 1 or 2 projects to begin with and then maybe add some other stuff later on? Or should we do everything all at once? Well, when it comes to your finances, you don't have to do everything all at once. How about you make some smaller changes that really could have a big impact on your future in retirement? Even though you might not necessarily see that impact immediately. Because again, we're playing the long game here, right? And so small changes, you know, for anybody. Um, small changes do matter. And, and financial progress doesn't happen usually all at once. It builds over time through things like repeated decisions, consistent habits and increasing retirement contributions. Even just a little tiny bit, even just slightly can create meaningful differences because those dollars benefit from compounding growth over the years. Albert Einstein, you might have heard of him. Very smart guy called the compound interest the concept of compound interest, the eighth wonder of the world. And you know, those who understand it will make it. Those who don't understand it will pay it.

Speaker 1:
And it's very true. Um, you know, if you've got some growth that compound, so growth on top of growth, on top of growth over the years. Boy, that can make a huge difference in your life and in your life and retirement especially And small portfolio adjustments. You know, rebalancing or improving your diversification can help keep you in line with your overall long term again, long term investment goals. And so some strategies here just to make some changes incrementally along the way, maybe increase your contributions by 1% each year, you know, with potential wage gaps that we experience in our community. Maximizing those contributions really becomes critical. And so even small annual increases will compound significantly. Um, you get a raise, you get a bonus. Maybe direct that into your retirement instead of, you know, increasing or inflating your lifestyle. Um, redirect any of those increases or bonuses or whatever into your retirement accounts directly. Um, you know, many individuals in our community develop side businesses or freelance work and consider directing all of that into your retirement accounts, all income from that side business into your retirement account as well. If you are age 50 or older, you can take advantage of the catch up contributions into your, um, IRAs, your 401 S as well. Uh, it's like $1,100 extra for a total of $8,600 a year that you can contribute after age 50 into your IRA this year. And so prioritize those catch up contributions as well.

Speaker 1:
And also, if you have a high deductible health plan, maximize your contributions to a health savings account because healthcare costs are expected to continue to go up. They outpace inflation already and they're expected to continue to go up. And so HSAs, those health savings accounts, they're tax free. When paying for, you know, these, uh, you know, approved health related things. And so they're really powerful tools to be used later on for LGBTQ plus retirees. So, you know, obviously I talked about compounding growth. And again, you've got to be focused when you're talking about compounding growth, thinking about it, you've got to be focused on the long term because compounding works best over time. Obviously, you got to give it more time. And you know, early and consistent contributions really do tend to outpace and outperform kind of big last minute attempts to catch up later on. So those modest increases in your savings and your investments can continue over time to create significant long term differences. So, you know, maybe take a little time to review your rate of savings, your rate of investment for retirement at least once a year. I would say minimum twice a year, every six months and even a small increase. Like, like I was talking about like taking those, redirecting those raises or those bonuses into your retirement accounts that can really strengthen your long term financial health and momentum.

Speaker 1:
So, you know, as I've been saying here, building a stronger retirement, a retirement you can take pride in does not always require these big overhaul changes. It's the little things that can add up and really create a big long term impact. As a matter of fact, it doesn't. I'll say this, uh, even, um. You know, I was going to say it doesn't, um, require that long term overhaul. The overhaul might seem overwhelming and all that stuff. Well, the overhaul actually could underperform. Um, and a lot of times does underperform those incremental changes over time and that consistency over time. So if you want help building that and making maybe making those incremental changes, building consistency over time, building your financial momentum. Uh, reach out. Take pride in retirement. Take pride in retirement. Dot com is the website. 85524692. 11 is the number. A couple of things here to talk about as far as LGBTQ plus specific protection strategies. Um, I will emphasize these. I'm probably going to do some episodes on these coming up, so stay tuned for that. But, um, I would say that estate planning for our community, number one is a non-negotiable, uh, wills and trusts and all those things really can protect your wishes, especially when they are family concerns that you might have about somebody trying to take advantage, unfortunately, of your passing, uh, to, to make themselves, um, benefit from that. So, you know, maybe if you've got estranged family, make sure you've got wills and trusts and beneficiary designations and all that stuff taken care of so that what you want to go, where goes where you want it.

Speaker 1:
If that even makes sense. Um, powers of attorney for health care. Super important as well. Make sure that your partner or your chosen family can make medical decisions if you are incapacitated. And don't assume that legal marriage is enough. You know, always have your documents with you. Financial power of attorney as well. Designate somebody to manage your finances if you become unable to do that. Um, physician orders for life sustaining treatment or post polst forms. Those are especially important for trans individuals to make sure that medical wishes are respected and deadnaming doesn't happen. Remember as well that, um, you know, federal marriage recognition is secure for now. Um, you know, the, the decision to, um, overturn Roe v Wade a few years ago, one of the justices had mentioned in his dissent or in his concurring opinion on that, I should say that, um. Obergefell, the decision that legalized same sex marriage may need to be revisited. So and we've already seen attempts at that. Luckily, they haven't gone anywhere, but let's make sure that we are prepared no matter what. Unmarried partners need extra protection. And so if you're not married, you have virtually no legal protections right now. Consider domestic partnership agreements, cohabitation, comprehensive estate plans, civil marriage, you know, something like that to make sure that you have those rights that you wouldn't otherwise have.

Speaker 1:
Um, there are international considerations as well. I mean, if you travel or retire abroad, research Lgbtq+ rights and legal protections in those countries, that's something that I've kind of done pretty extensively. Um, you want to make sure that you have, uh, any, um, you know, income protection that you might need in your retirement years, especially, um, long term care insurance can be really super important, especially if you rely on chosen family. Um, if you would like to invest in an annuity to give you market like gains without the market risk while you are contributing or while you're while you're working, rather until you start withdrawing income from that and taking those income payments, then, uh, that is something that you, uh, can, can definitely do through a product called a fixed indexed annuity. That is a, an income generating investment that is protected from market risk. Principle is protected 100% by the claims paying ability of the insurer and those, um, you know, income payments then that you start taking are guaranteed for life. So that helps protect your income. You also need to make sure you've got health care planning taken care of in your retirement as well. All of these are things that I can help you with. And, you know, especially like, like with the estate planning piece, I'm not an estate planning attorney, but I know a guy.

Speaker 1:
Um, and we actually know several. And so we can recommend, uh, something that fits with you and your situation. So go to take pride in retirement.com once again, take pride in retirement.com and, uh, you can sign up for that free initial consultation. All right, so a couple of things here. I mentioned this. I've got, I think I've probably gone a little long, but hey, uh, it's, it's the spring. So we're focusing on finances here and financial growth. And so let's just do a couple of these quick things that I want to recap from our, um, spring financial cleaning episode that we did not long ago. I would like for you, this is your homework assignment review these things, your streaming subscriptions, your digital services. Do you really watch all of those things? I logged into one of them the other day. I'm like, oh, oh yeah, I have this. I've been paying for this for many months without even taking advantage of watching it review. Those only pay for the ones that you use. Cell phones and internet plans. Shop around. For some competitors, you could be able to lower your bill quite a bit, and you might not even have to change your provider. Even if you just call your current provider and say, look, I've found this other company that's going to really cut me a good deal here.

Speaker 1:
And I'm going to, you know, uh, leave you if you're actually happy with the service, just not happy with the bill. Call them, say that and see what happens. They could very well, um, just say, you know, give you a deal to stay with them, review your insurance policies and deductibles, even things like home auto, renters, life insurance, especially automatic renewals, those unused memberships for gym for, you know, the gyms, the apps, the subscriptions, all those types of things and, you know, banking fees, maybe consider switching to a credit union or a bank with no fees for certain accounts that you might use, that you could save a little bit of money on. You know, a lot of households discover they are paying for services that they rarely use, and they're paying too much in fees for things that they don't need to be paying. And that is something that I would love to help you out with the fee part, especially if you're paying fees on your retirement accounts and your investment accounts. Give me a call 85524692118552469211. You can also go to take pride in retirement.com that's take pride in retirement.com. And I'll be glad to set you up with a free initial comprehensive consultation. Well that's going to do it for this edition of the show. Thank you so much for being a part of things, as always. And until next time, take pride in yourselves and take care of each other. We'll see you then.

Speaker 2:
Thanks for listening. To Take Pride in Retirement. Members of the Lgbtq+ community deserve to work with the fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management. Call (855) 246-9211 or go online to take pride in retirement.com. Investment advisory services offered through Brookstone Capital Management LLC. Bcm, a registered investment advisor, BCM and Active Wealth Management Incorporated are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.

Speaker 1:
Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosure of any conflicts of interest, please refer to our firm brochure, the ADV Too-a item four for additional information. Fixed annuities, including multi-year guaranteed rate annuities, are not designed for short term investments and may be subject to restrictions, fees and surrender charges, as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer.

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