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Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

  • Summit Puri

Investment Corner - The Psychology of Saving & Investing

Updated: Jan 15

Welcome 

Thank you, and welcome to the first installment of Whitaker-Myers Wealth Manager’s Investment Corner.  We hope you find this section of our newsletter informative and insightful. We intend to highlight various topics based on investing and investment strategies while focusing on our mission and one of our core values: having the heart of a teacher.  


In this week’s post, we talk about investing strategies and how your past experiences, upbringing, and world events can directly contribute to how and what we invest. The theme of today’s post was inspired by a chapter from Morgan Housel’s book “The Psychology of Money,” where Morgan explores the development of various money habits correlated to geopolitical events and the mindset of future investors. Keep in mind that nobody is crazy!   


SAVE 

Whether you invest in gold, equities, ETFs, mutual funds, bonds, Bitcoin, real estate, or businesses, or just prefer to keep your money under your mattress or in a tin can buried deep in your yard, You’re not crazy. Your relationship with money and how you choose to save is deeply seeded in your experiences and nature. Imagine growing up where investing was normalized, taught, and understood. Concepts such as compound interest, dollar cost averaging, and rate of return may come easily. On the other hand, where these concepts are not taught, or the foundation of finance isn’t laid, the investing road ahead may be a bit bumpy. There is, without doubt, a need for this foundation to be laid within the traditional education system. However, to understand one's propensity to save in a particular manner, simply knowing one's understanding of finance and investing is not enough.  Personal finance is only 20% math and 80% behavioral! 


Cognitive Bias - Familiarity 

In high school, our economics teacher gave us a project. We could pick our stocks at the beginning of the trimester with an imaginary $10k and buy $10k on margin.  What did I pick? Stocks that were “cool,” Nike (mostly because of Michael Jordan), Coke (I wasn’t allowed to drink as much as I liked, so why not own the company?), and several other ‘tickers’ that I thought sounded ‘cool.’ It wasn’t the best investing strategy, but this assignment taught me valuable lessons I hold on to today. The psychological impact of seeing a daily/weekly uptick or downward trend was more than an emotional feeling; it was physical. The manifestation of these emotional feelings into a physiological sensation can, in part, be explained by the biopsychosocial model of health (https://www.physio-pedia.com/Biopsychosocial_Model). This model suggests that physiological manifestations can be attributed to a combination of biological pathology, psychological factors (fear, stress, and others), and current socio-economic/environmental state. My 14-year-old self still had a strong association with money, although the money was all fictional from the start. I believed it was MY money. At Whitaker-Myers Wealth Managers, we believe this money is not ours, and we are only stewards for God. As fiduciaries, we are responsible to every one of our clients to provide the best management and guidance for our clients, not ours. Thus, our team focuses on doing what is right for our client without any partiality or bias. 


Bias is a term you’re likely familiar with. However, Cognitive bias may be a bit new. Having a bias is natural and can be an unconscious or automatic process. “(Biases) are designed to make decision-making quick and more efficient. Cognitive biases can be caused by many things, such as heuristics (mental shortcuts), social pressures, and emotions” (Simplypsychology.org). The collective influence of each of these factors plays a crucial role in our ability to process and make decisions (we’ll discuss this much deeper in a future post).  Cognitive bias also takes into account familiarity and relatability. My 14-year-old self chose Nike and Coke because I wanted to ‘Be like Mike’ and be a bit rebellious (without my parents knowing). Luckily for me, this was a school project and didn’t have any long-term real-world consequences. My dartboard strategy may have been very lucky with two of the picks but likely unlucky with the others. Familiarity bias may be a double-edged sword, but not saving can only have one outcome! 


Nobody is Crazy 

Playing the lottery is not a winning strategy. Regarding saving, we tend to let our emotions and biases fog our ability to make rational decisions. At the beginning of this post, I mentioned all the ‘crazy’ ways people invest or save their money. None of this was to be judgmental or picking on a tactic. The goal was to highlight that it doesn’t matter what you’re doing; as long as you’re saving, you’re moving in the right direction. You may be in baby step 2, gazelle intense, and don’t have the capability right now to invest. That’s fine; it’s just the season you’re in. The saving and investing will come soon. Remember to invest in yourself, your future, and your family's future.  Saving may be difficult today, but it will get easier. Reaching that first milestone is like the first 1/3 of a race; get past it, and the latter 2/3s will breeze by!  


Our team at Whitaker-Myers Wealth Managers is here to walk with you on your journey. If you’re looking for guidance and a great coach through baby step 4 or want a further deep dive into your investments and strategy, our team is here to help. We can help develop the most efficient strategies that align with your financial goals. Schedule a meeting with an Advisor today!



Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

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