June 2, 2021 - Published by IAG Wealth Partners

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On Sunday, my oldest son graduated from high school. We are very proud of his accomplishments, and he is already enrolled for his next steps at Waukesha County Technical College.

The great news about a graduation is that you can’t go backwards. Once you earn that diploma or degree it is yours to keep for the rest of your life. What you do with the skills and knowledge you gained is entirely up to you.

After your last graduation, real life typically begins. You become a student of experience which will teach you far more than your teachers or professors ever did.

The financial markets work the same way.

You can learn in school what a bond is, what a stock is, and how the financial markets work. In theory, it is all so easy to understand.

However, your experiences (particularly your early experiences) in investing create life-long biases that could damage your long-term financial well-being.

I am sure you have heard about a “Great Depression” mindset, where neither the financial markets nor individual banks can be trusted.

Different mindsets generally exist for different generations of investors. Investors born in the 1930s and 1940s came of age in the 1950s and 1960s and may have a more positive view of the financial markets. Those born in the 1950s came of age in the 1970s and are less confident. If you came of age in the 1980s and 1990s you saw the power of compounding at work. Those who had their first experiences in the 2000s are less trusting, while the 2010s provided positivity.

When you came of age can heavily influence how much investment risk you are willing to take and, therefore, how well your savings compounds over time. Invest with too little compounding potential and you will need to save more to fund your long-term goals. Invest with too much compounding potential and you could lose too much when you need it most.

Working with a caring advisor can help you identify your ingrained biases and their potential impact on your long-term success. We can help you graduate from the incorrect lessons experience may have taught you.


Quote of the week: Shane Parrish: “Judgment is the art of knowing what to ignore.”


Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through IAG Wealth Partners, LLC, (IAG) a registered investment advisor and separate entity from LPL Financial.

Past performance is no guarantee of future performance. In fact, the opposite can be true. The information contained in this report does not purport to be a complete description of the securities, markets, or development referred to in this material. Investing involves risk including loss of principal.

Any opinions are those of IAG and not necessarily those of LPL Financial. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. No strategy assures success or protects against loss. Investing involves risk including loss of principal.

Photo by Zachary Olson on Unsplash

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