Hype = Headache

Comedy and Tragedy, Mardi Gras masks

Comedy and Tragedy

If you've ever been to Mardi Gras in New Orleans, you've seen masks similar to the two pictured above.  The origins of the masks are found in Greek theater where they represent comedy and tragedy.  Within the context of Mardi Gras, which is an extended party prior to the Lenten Season, the masks represent the "happy" and "sad" emotions of the season.

As a financial advisor, these masks remind me of the initial excitement and then disappointment of poor investment decisions.

Hype = Headache

It would be an obvious understatement to say we live in interesting times.  Financial markets, economies and governments continue to shift and adjust to the ongoing ripple effect of the virus and the resulting impacts.  With interesting times comes interesting investor behavior.  I'm referring to a seemingly non-stop assortment of investments that would have seemed crazy just a couple of years ago.  A few recent examples:

• Artists, traders — and scammers — are making millions flipping nonfungible tokens, the digital certificates of ownership commonly known as NFTs.
• Tiny, obscure uranium stocks surge 25% in one day when traders on the WallStreetBets online forum form a flash mob of buyers.
• AMC Entertainment Holdings Inc., up more than 2,300% this year on frenzied retail trading, has pulled the entire Russell 2000 Value Index up with it.
• Cryptocurrency buyers are borrowing heavily against their holdings to buy fancy pens, luxury cars, million-dollar houses — and more crypto.

This list could also include:  SPACs (Special Purpose Acquisition Company), meme stocks (AMC is an example), options, ReddIt recommendations, etc.  This new development of "opportunities" can lead some investors to think they have to do crazy things just like everyone else, and they can expect similar results to those they see in headlines.  My summary of the experiences of the overwhelming majority of these investors is:  hype = headache.

These new opportunities tend to generate a significant amount of hype.  As someone who reads financial news all day, it is easy to spot the latest fad investment by the shear volume of reporting on the emerging trend.  In other words, there is a lot of hype.  Within a few weeks or months, the hype fades as the reality of risk, loss and taxes comes forward.  Investors are surprised by their significant losses, the difficulty of really understanding what they are investing in, and the large tax bills.  The hype has led them to a headache.

Acadia follows a more conventional, straight-forward approach of concentrating on low-cost, diversified, tax-efficient portfolios that directly connect to the Client's risk tolerance, timeline, and goals.

If you have an investing opportunity you want to explore, let's talk.  If you want to better understand investing, let's talk.  Regardless, if you need to talk to someone about how to better position yourself as a long-term investor, again, let's talk.

Schedule yourself for a meeting so we can develop a highly personalized plan that meets your specific needs.

Laissez les bons temps rouler

Credit to Jason Zweig, Wall Street Journal, for content and inspiration

Mary's Recipe Corner

Enjoy this seasonal recipe from Bill's late Mom:  

Grandy’s Pumpkin Bread

Bill's mother always went by the name "Candy" because she was such an incredibly sweet person. Our children combined it with "Grandma" to come up with "Grandy." We lost our precious Grandy last December, and the world still doesn't seem quite right.

Below is her recipe for what I think is the best pumpkin bread. Grandy used to make this every Christmas for the neighbors and any other people she regularly interacted with. She always wrapped the small loaves in colored Saran Wrap tied with red or green curling ribbon. She added raisins, dates, and nuts to hers, but I tend to add chocolate chips or cream cheese filling (my recipe below).

• 3 cups sugar
• 1 cup vegetable oil
• 4 eggs, beaten
• 1 16oz can pumpkin
• 1 tsp vanilla
• 3-1/2 cup flour
• 2 tsp soda
• 2 tsp salt
• 1 tsp baking powder
• 1 tsp nutmeg
• 1 tsp allspice
• 1 tsp cinnamon
• 1/2 tsp cloves
• 1/2 tsp mace
• 2/3 cup water
• Chopped dates, raisins, nuts (I believe she used pecans)
• (Chocolate chips- an addition I sometimes do)

Preheat oven to 350. Cream sugar and oil together. Add eggs, pumpkin, and vanilla and mix well. Sift together dry ingredients (I never sift these, only mix them). Add dry ingredients alternately with the water to the pumpkin mixture. Stir in any desired mix in’s (or my iteration- pipe cream cheese mixture down the center of loaves). 

Pour in 6 small or 2 large well greased bread pans. The batter should fill about 2/3 the pans. I also wipe around the top ridge of the pan to eliminate the oil there which makes loaves that dome without sliding back down the sides. Large loaves take an hour to bake. Test with toothpick in the middle, looking for crumbs on the toothpick and not wet batter. Cool on cooling rack. 

These will freeze well, when wrapped in colored Saran Wrap and tied with curling ribbon. 🙂

Optional cream cheese filling:

• 16 oz cream cheese, softened
• 1 egg
• 1/2 cup sugar

Mix well and pipe either in the middle of two portions of batter, or down the top of the uncooked loaf.

Bon appétit!

For Art's Sake

If you grow up in New Orleans you learn to appreciate art (and food and music and parades, etc.), so it seems appropriate to share a bit of art with our readers.  

Zoryana Petriv, born in 1994, has painted a striking visual depiction of the old saying "the blind leading the blind."  In our context, carefully consider the source of your investment information before making any decisions.  Always consider the cost, your timeline, tax implications and your risk tolerance.  And please call your advisor before making any notable financial decisions.  🙂 

Long gone are the days of moralistic teaching through art, but the truest of life's lessons are eternal and always applicable.  Consider and reflect.

The Blind Leading the Blind, painted by Zoryana Petriv, 2020, Saatchi Art