January 12, 2021

New Year’s ‘Financial’ Resolution

Amid all the negative news 2020 brought us, there are many valuable lessons to be taken away from all the turmoil it has caused. In a year that was wrecked by a global pandemic, locked us in our homes away from friends and family, forced significant stress from the wild market gyrations, and threatened our jobs with the economic uncertainty; there are always positives in negative experiences. Once we get past this pandemic and back to normal, I will cherish time with friends and family more because now I know the feeling when it’s taken away. I will be prepared from a financial perspective because I witnessed how lost income affected families. This is my challenge to everyone; let’s be prepared on the financial side of our lives. Let us make it our New Year’s Resolution to control our finances and be ready for the unexpected.

When COVID-19 hit, it felt like this frightening dream that we couldn’t wake up from. That feeling continued until we were personally affected by the virus. Whether that was one of us getting sick and having a hard time recovering or unfortunately losing someone close to us to make us realize this is real. The first step to make sure our financial lives are set going into 2021 is to make sure all our beneficiaries are up to date. This is the cheapest estate plan you can execute, and it will help you sleep at night knowing you are prepared for the unexpected. If your financial plan is more complicated than the average person, let’s make sure our wills and trust documents have been reviewed by a professional and still intend to be executed as you wish.

The US unemployment rate jumped to over 14 percent at one point in 2020, which means many American’s were left with no income source to support their families. A general rule and conversation I have with my clients are keeping six months of living expenses in a liquid account. I would recommend consulting with a financial advisor to figure out the best way to structure your situation. This prepares us for the unexpected. No one saw this coming in January of 2020, and if we have six months of living expenses liquid to us, we can be prepared for the world’s unexpected turns.

One of the most important financial lessons we can learn from 2020 is not reacting emotionally to significant market swings. On March 23, 2020, the market bottomed out, and the S&P 500 Index had dropped around 34% from it’s high. At this point, many investors reacted emotionally, pulling their money out of the stock market and started fleeing to safer investments. The stock market is a forward-looking mechanism, and it will always recover in anticipation before the economy does. The S&P 500 Index turned around from that point and closed with a 16% gain in 2020. A lot of investors that pulled their money out of the stock market missed out on these returns.

There are many other checklist items that you can add to your 2021 New Year’s Financial Resolution, like consolidating your 401(k)s, creating a budget for each month, having a financial plan for your retirement, checking your risk tolerance, etc. Here at Duncan Williams Asset Management, we want to help you navigate every aspect of your financial life. Give us a call today at 901-435-4250, so we can help make your 2021 Financial Goals come to fruition.

Peyton Wade

Recent Articles

Shrinkflation: The Silent Economic Threat That's Affecting Your Everyday Life

Shrinkflation: The Silent Economic Threat That's Affecting Your Everyday Life When the price of anything rises, that means the value of that item has decreased. Shrinking prices are just that: the price of something is decreasing. These two phenomena can be difficult to tell apart, but they are very much connected. Shrinking prices are the result of inflation. The price of something is rising so it makes sense that you would pay more for it over time. So, how can you tell that you’re seeing the effects of shrinking prices instead of just seeing a natural rise in prices? Here are some of the most common signs.

Why Invest in International?

Since 2007 international stocks have lagged the returns of U.S. stocks. So, are global stocks worth investing in if they have not generated superior returns to U.S. stocks in recent years? After all, by investing in international U.S. stocks, wouldn't I get enough exposure to global economies? To answer these questions, we must discuss the potential gains from diversification. 

The Costs of Eating Out

In 2019, during the COVID-19 pandemic, I primarily stayed at home to avoid sickness. As a result, I was consuming less food because I just ate what was already in the refrigerator rather than going out to lunch. That year, my doctor said that I was one of her few patients who lost weight during the pandemic. Fast forward to 2022, when I resumed work and started going out for lunch again. Two weeks after returning to the office, my doctor told me that I had gained 8 pounds--in two weeks! Not only did weight gain reoccur, but I was spending $400 on lunch a month! And every time I went to my favorite diner, I would see signs that read, “If you really liked us, you would eat more.” Obviously, I complied! 

Lets Talk >