December, 2021

Why a stock peak isn't necessarily a cliff

Many investors may think a market high is a signal stocks are overvalued or have reached a ceiling. However, they may be surprised to find that the average returns one, three, and five years after a new month-end market high are similar to the average returns over any one-, three-, or five-year period.

• In looking at all monthly closing levels between 1926 and 2020 for the S&P 500 Index, 30% of the monthly observations were new highs.
• After those highs, the average annualized compound returns ranged from nearly 14% one year later to just under 10% five years later. Those results were close to average returns over any given period of the same length.

Reaching a new high doesn’t mean the market will retreat. Stocks are priced to deliver a positive expected return for investors, so reaching record highs regularly is the outcome one would expect.¹

Market Update - What Does Santa Have in Store?

The holiday season is often a quiet, positive time for the financial markets. The phrase “Santa Claus Rally” was coined in the early 1970s to reflect the stock market’s upward bias during the November-January stretch.²

But this year, the markets might face some crosswinds as we travel through the holidays. The stock market initially reacted well to news that President Biden will nominate Jerome Powell to lead the Federal Reserve for a second term. But trading became choppy as the session continued.³

Markets took a hit as the Omicron virus strain spread, and Fed chair Jerome Powell warned of inflation risks in the restart and indicated the Fed may wrap up its asset purchases earlier than planned. We see inflation settling at a level higher than pre-COVID even as pressures from supply bottlenecks ease, as we expect a muted policy response to inflation.

U.S. inflation data are the key focus this week, especially after the Fed has caught up to inflation reality and warned of inflation risks last week. The Fed’s inflation target has been met, so now the key is how the central bank will interpret the other side of its mandate – full employment. The timing and trajectory of rate rises will depend on this.

Next up, the markets may react to an active December legislative calendar. Between today and New Year’s Day, Congress is preparing to work on the federal budget, the debt ceiling, and the Build Back Better plan. Economic news also may influence trading in the weeks ahead. For example, the next reading on inflation (Consumer Price Index) releases on Friday, December 10.⁴

Last, COVID-19 continues to be unpredictable. Many states have seen an uptick in infections in recent weeks, and a few nations have adopted more aggressive lockdowns to help manage the most recent wave.⁵

Markets tend to be comfortable with some uncertainty, believing that time will resolve the issues. But this year, it might be best to prepare for Santa’s sleigh to hit a few speed bumps along the way.

Shield Yourself from Holiday Shopping Scams

Don't Put Off Reading This Article -

Your 2022 Guide to Procrastination Elimination...or at least minimization.

The calendar year will be coming to a close before we know it, and with a fresh start in 2022, many of us will be setting our sights on new goals.

But wait, I hope I'm not the only one realizing that some of my New Year's Resolutions are carry-overs of goals from years past that I am still hoping to achieve. Or maybe you're feeling the stress and pressure setting in as you try to complete all those year-end projects that you told yourself you'd have time to do later. It is probably because of these common experiences that December has been declared Procrastination Awareness Month.⁷

Procrastination is one of those habits that despite our greatest intentions to improve our time management and self-discipline, it seems we will, at some point, find ourselves back in that place of working against the clock to catch up on something we wished we started earlier. There is hope for all of us - read on to learn more about why we procrastinate and some strategies to do it less.

Why do we procrastinate?

Procrastination isn't a sign of laziness, it is usually just the active process of choosing something else to do instead of the task you know you should be doing.⁸ Oftentimes we opt for the easier or more enjoyable tasks that we can finish quickly over the longer term priorities because those projects are usually more ambiguous. When we don't know where to start, we lack confidence in our ability to do what needs to be done, so instead, we do something else.⁹  Surprisingly, perfectionists are known to be procrastinators also because they would rather avoid doing something altogether rather than doing it below the standards they set for themselves.⁸

Anti-Procrastination Strategies

1. Rate Your To-Do List - Take a look at your full to-do list and decide what is Urgent (meaning it demands immediate attention), and what is Important (meaning it has an outcome that leads to achieving your goals).¹⁰ Always prioritize those items that are high on the urgency/importance scale, and if you can, knock out a few of the lower importance/urgent items just to clear your headspace.⁹
2. Choose One Major Priority - Select one thing from your ongoing to-do list that is most important and meaningful to you. (Hint: it is probably something you have been thinking about for a while!) Center your focus on that one item and list the necessary steps to take the ambiguity out of how to achieve it. This sub-list within your To-Do list will likely involve doing research, asking questions, and perhaps getting necessary training - when you break that big thing down into smaller, more concrete steps, you are more likely to get started.⁹
3. Take the First Step - Once you've managed all your high urgency tasks, it is time to get to work on your priority item. Try to put away all distractions, and remember to expect to experience some of your usual resistance to tackling something that feels so big. Remember why this task is your first priority, and that once you make a little progress, it will be much easier to keep the ball rolling.⁹
4. Ride the Momentum - Continue to prioritize time each day to make progress towards your desired result. You might find that there is a certain time of day that you are most productive - save you most important tasks for that time.⁸
5. Tell Your Friends - When you tell people in your life that you are working towards a big goal, it is exciting for them and they will likely check up on you to see how it is going. Having those regular check-ins can help hold you accountable to the things you really want.⁸
6. Give Yourself Some Grace - No one is perfect. You might find you get started, and then get distracted or derailed entirely. Forgive yourself for the times you have procrastinated in the past because studies actually show that when you feel more positively about yourself, you reduce the likelihood of procrastination in the future.⁸
7. Celebrate When It's Done - Promise yourself a reward and celebrate the good feelings of accomplishing things in the time you set for yourself. Nothing like a little positive reinforcement to set yourself up for success next time!⁸

Ultimately, all of us know that procrastination doesn't feel good, and if we're always only just trying to finish the 'Have-To-Dos', we may never get to the most meaningful 'Want-To-Dos' in our lives.⁹ We hope these strategies help you get to more of your Want-To-Dos in 2022!

More Than Just Your Two Front Teeth -

Treat your pearly whites well this holiday season.

The holiday season is officially upon us- and with it, comes a seemingly endless supply of sweet treats. At the peak of all the work parties, family gatherings, and neighbors dropping off batches of baked goods, it can feel as if we are subsisting entirely on the four main food groups of my favorite Christmas movie character, Buddy the Elf: "candy, candy canes, candy corns, and syrup."

While many of us might immediately think about the belt size implications of a sugar-centric holiday diet, it is often the things we aren't thinking about that could come back to 'bite us' down the road (pun intended).

That's right, we are talking about your teeth. Did you know that your oral health is intricately associated with your overall health? For a lot of people , seems hard to imagine that poor oral health could be a contributor to a vast array of major health concerns such as cardiovascular disease, dementia, various types of cancer, diabetes, pneumonia, and even pregnancy and birth complications. It may seem like a stretch, but your mouth is technically the main entryway into the body, so any 'bad bacteria' living in your mouth can end up in your bloodstream and lead to all sorts of unwanted infection or inflammation.¹¹

Amidst all the hustle and bustle of the holidays, many people find their health routines fall by the wayside.
Given how impactful it is to care for those pearly whites, here are a few quick tips that can make a big positive impact on your health and your smile:

1. Take 5 - 

Brush your teeth for two minutes, twice per day. On top of that, take a minute to floss at least once per day. These are the best 5 minutes you can spend on your oral health each day even if you decide not to heed any of the following advice.¹²

2. Pack a Spare - 

Carry a to-go teeth cleaning kit for work and parties. Consider it your oral health extra credit, plus, a quick refresh while you are out and about will rescue you when you get spinach dip stuck in your teeth.¹³

3. A Spice for the Nice List -

Cinnamon gum contains something called "cinnamon aldehyde" - it is an essential oil that gives the gum it's spicy flavor, but it also can fight cavity-forming bacteria. If you don't have a spare toothbrush or floss on hand, this can serve a great alternative to pop in your mouth after a meal.¹³

4. Pair Your Wine with Cheese -

Adult beverages are notorious for their high acid content that can wear away at your protective tooth enamel. Besides the fact that they tend to taste good together, the alkaline in cheese can neutralize the acid in your drink!¹³

5. Drink Water -

When possible, opt for water over sugary sodas and juices. Rinsing with water can also help clean away freshly formed bacteria in your mouth, so keep sipping all day long!¹³

6. Crunch those Carrots  -

Indulge in what you like at the buffet table, but grab some carrots off the veggie tray while you're at it. Carrots and other crunchy fruits and vegetables help break up plaque and tartar, plus they increase your saliva-production while you take the time to chew which, like water, helps wash away unwanted bacteria.¹⁴

7. Resist the Candy Canes  -

Sticky, chewy, and gummy treats are some of the worst options for your teeth and gums- try to pass on those options especially if you don't have your to-go tooth cleaning kit on you.¹³

More Money, More Happiness?

You probably have heard of the highly popularized 2010 Study that examined the link between wealth and happiness. Daniel Kahneman and Angus Deaton surveyed hundreds of thousands of people to rank how happy they were the day prior, and correlated their responses with income. They found that the two variables track very closely to each other, up until respondent incomes reached the $75,000 mark, after which the relationship fizzled.

Earlier this year, a researcher by the name of Matthew Killingsworth dug a little bit deeper into that fizzling upper tier of income. According to his study, happiness does indeed continue to rise with income levels, however the returns diminish once you surpass a certain threshold. Another way of thinking about this is that each dollar you earn doesn't lead to an equal increase in happiness, the dollars way at the top add a little less positive emotions to your life.

Regardless of where you fall on the income spectrum, researchers have found that how you spend your money can also impact your feelings of wellbeing. Here are a few pointers from Liz Dunn & Mike Norton's book, Happy Money: The Science of Happier Spending.

Buy Experiences, Not Things. Experiences are anticipated, felt, and remembered. They are also harder to compare than material things, and usually there is an inherent social component to them as well. For all these reasons, an experience will likely provide more positive feelings, for a longer period of time.

Save Now, Consume Later. Besides the fact that it is usually a more financially responsible decision to save up for big purchases rather than succumbing to immediate gratification, taking the time to save up or pre-paying for something you will have to wait for can also boost the anticipation, and thus, the overall happiness you experience from it.

Buy Time. Research suggests that people who spend money on time-saving services subsequently experience greater happiness in comparison to people who spent their money on things. Interestingly, this holds true across the income spectrum. In general, people who value time over money will be happier, especially if they find ways to spend that time doing something they deem productive or social.

As we approach the holiday season, we hope you use these tips to spend your money and time on things that maximize happiness for you and yours.

This information was summarized from an article found in Avantis Investors Monthly ETF Field Guide - October, 2021.

Answers:

1. Silent Night
2. Rudolf the Red Nosed Reindeer
3. What Child Is This?
4. Hark the Herald Angels Sing
5. Up on the Rooftop
6. God Rest Ye Merry Gentlemen
7. Joy to the World
8. Santa Claus is Coming to Town
9. Frosty the Snowman
10. It Came Upon a Midnight Clear
11. Away in a Manger
12. Jolly Old St. Nicholas
13. O Holy Night
14. Chestnuts Roasting on an Open Fire
15. The First Noel
16. I'm Dreaming of a White Christmas
17. O Come All Ye Faithful
18. Little Drummer Boy
19. I'll Be Home for Christmas
20. Jingle Bells
21. Let It Snow, Let It Snow, Let it Snow

This holiday fun was sourced from the following:
Christmas_Carol_Game.pdf
crazy christmas carols printable - A girl and a glue gun

Footnotes and Sources

^{1. DFA, November 24, 2021.}

^{2. CNBC.com, November 22, 2021}

^{3. CMEGroup.com, 2021}

^{4. BLS.gov, November 10, 2021}

^{5. APNews.com, November 20, 2021}

^{6. Forbes.com, December 1, 2021}

^{7. BellaOnline.com, December, 2021}

^{8. MindTools.com, December, 2021}

^{9. WaitButWhy.com, November 6, 2013}

^{10. MindTools.com, December, 2021}

^{11. AbsoluteDental.com, October 11, 2021}

^{12. MayoClinic.org, October 28, 2021}

^{13. AbsoluteDental.com, October 12, 2021}

^{14. Snodgrassking.com, December, 2021}

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^{The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.}

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^{This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.}