Perception: For Politicians and Investors It Can Be Lethal

Perceptions: For Politicians And Investors, They Can Be Lethal!

by: Brendan Magee

Especially in America, we feel entitled to our opinions and interpretations.Once we have made up our minds about something that becomes the truth we go by. Unfortunately, before we base our decisions about how we will invest our money or who we will vote we never stop to see if  our brains have misinterpreted what our eyes, ears, sense of smell, and touch actually encountered. In the case of world events and investors account balances it would have been so much better if we could have gotten a perception double check.

"1924, The Year That Made Hitler" documents the trial for treason held when in November of 1923 Hitler and a group of National Socialists failed in an attempt to overthrow the government in Munich, Germany and use that action as a springboard to stage a march on Berlin and overthrow what they saw as the illegitimate government running all of Germany.

Hitler's trial was an international media event. As of 1920 through political rallies, he had become a fast rising political figure. Newspapers across Germany and the world added to the drama. Hitler was now going to   voice his political views and vent his frustrations about the problems facing Germany to the world.

In the German town of Rheydt some 400 miles from the court proceedings and having never met Hitler, a young university-educated  nationalist was eagerly reading the newspaper stories of the trial. In personal diary entries about the trial the young man wrote " "Communism, the Jewish question, Christianity, the Germany of the future. Hitler touches on many questions, but he makes the solution very simple.What is liberating about Hitler is the involvement of a really upright and truthful personality."This young man's name, Joseph Goebbels.

As I read this passage from the book, A. I am finding myself desperately wanting someone to shoot Hitler to stop the horrors he was to bring the world over the next 20 years, and B,  I was remembering a conversation that I had with a client almost eight years ago. Barack Obama was just about to become President of the United States.

I had a client call me up in a high state of upset. She wanted all her money out of the stock market. She said Obama was going to be a disaster for the the stock market and she wanted her money which is what we did, and in so doing terminated our professional relationship. Well,  we are coming to the end of Obama's term in office and here is what $100,000 invested in the various markets of stock grew to from Jan. 2009 through Dec. 2015:

U.S. Large Co. Stock $263,000

U.S. Small Co Stock $297,000

U.S. Large Value Stocks $222,000

As it did for the world with Hitler and my former client's perceptions, relying on them didn't prove to be beneficial for either.  This is why one of the biggest attributes an investor needs to be successful is humility which is defined as thinking less of yourself while at the same time not thinking less of yourself.

Our perceptions are prone to biases, misinterpretations, distractions, half truths, etc. Before coming to any conclusions about anyone or anything people might fare a whole lot better if they asked, "Am I seeing this right?' A five second double check could save a lot of uneccessary heart ache.

Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions or comments e-mail brendan@coachgee.com or call 610-446-4322

Sam Bradford & Investors, You Said, Yes!

Bradford and Investors,

Nothing Happens Until You Say, Yes!!

by: Brendan Magee

All in all, Sam Bradford was having a nice offseason. He had signed a new two year $36 million dollar contract to come back and play quarterback for the Eagles with $22 million guaranteed. Chip Kelly had been fired and the Eagles hired a new coach which would give Bradford a little more freedom to run the offense as he saw fit, plus the Eagles had signed a quite a few of their veteran players which should give the team even more of a chance to compete for a playoff spot in the upcoming season.

So all was looking good for Bradford until last week when the Eagles drafted what they hope to be their future franchise quarterback with the number two pick in the draft, Carson Wentz. From there Bradford went from the best available option to help the Eagles win to the guy the fans want out of town as quick as possible.

Bradford let it be known that he was angry the Eagles drafted another quarterback who was next in line to take his place. His agent, Tom Condon, told the press that Bradford wanted to be traded. Bradford would not return the phone calls of his new coach, Doug Pederson, and has been absent from the team's offseason workouts. Basically, every wrong message that could have been sent to the fans and the team, Bradford sent.

Some may blame the Eagles for creating an uncomfortable situation with their quarterbacks and that may be true, but the reaction to the draft, the demand to be traded, the not returning the coaches call, and not showing up for team workouts, that is all on Bradford. He said "Yes" to his comments and behavior and none of the fans ire would be directed at him at this point unless he said "Yes." He, and he alone, is responsible for the treatment he is getting at this point.

It reminds me of a meeting I had earlier this week with a couple. The wife, Jane, was considerably upset with the way their investments were being handled. Their adviser hadn't been in touch with them and she was worried that they were too far in the dark about where they stood with their investments. The husband, Tom,
when we sat down said he felt good about their investments. Even though the adviser hadn't been around too much, he was still fond of him. Even as he admitted that he was somewhat in the dark about their investments, he felt that they had made good decisions with their investments.

An analysis revealed their expenses were way higher than they realized. They were paying $3,500 above what they believed the were paying and that expense was going to go higher the longer they stayed with their investments. They were severely under diversified. 50% of all their investments were all in U.S. Large Company Stocks, the same asset class that went down almost 40% in 2008. They were taking more risk than they needed for the return they were getting.

Bottom line, there was no reason to have the confidence Tom had originally expressed. Jane at this point went from being upset to being frustrated, scared, and confused. She was sure that changes needed to be made.

Tom was little more analytical. He wanted to know why things had gotten to where they were. He wanted to go back and talk to their existing adviser. Even if the market crashed again, he felt he would not get hurt too bad. Whether it was protecting a bruised ego or something else, Tom was not of the mind to make any changes. He wanted to find out how things could have gotten as bad as they appeared.

Like Bradford, Tom is not going to find the answers that will make a dramatic difference by asking questions of his current adviser. He won't find them by researching his current portfolio. None of those will shine the light where it needs to be for him and every other investor out there. The light needs to be focused on who said "Yes" to how he is investing his and his wife's money.

When it comes to investing, an investor's success or failures comes form one source, themselves. Everything depends on what they do or don't do, what they allow or don't allow to happen to their money.

Tom couldn't be in a product that was under diversified, charged him thousands of dollars more, exposed him to more risk and less return until he said "yes" to the investment. Now why would he say "Yes" to an investment that put him at such a terrible disadvantage? It's because he couldn't see that that was what he was doing?

The changes Tom and Jane (or any other investor) want to see with their investments won't take place until they ask some hard questions of  themselves. Do they know exactly what they are doing when it comes to building their portfolio would be a good one to ask. Can they measure diversification? Can they account for all the expenses they are paying? These are amongst a few of the questions that need to be directed to the investor.

These questions will help place the responsibility where it belongs, in the lap of the investor. Once the responsibility is where it belongs,the power goes exactly where it needs to be, in the hands of the investor. Transformation, which is what most investors are looking for, but never get, is an inside out approach. It begins and ends with the investor.

Good luck Sam!

Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions or comments e-mail brendan@coachgee.com or call 610-446-4322.

Stocks or NFL Quarterbacks No One Really Knows How It Will Turn Out

by: Brendan Magee

Since the Eagles traded up to the second spot in tonight's NFL draft, it's been none stop talk about who will the Eagles choose. North Dakota State's Q.B. Carson Wentz or University of California Q.B. Jared Goff.
Both players have been analyzed to death. How far can they throw the ball. How fast can they run. Are they mature enough. How big are their hands, etc.

If you are an NFL team about to risk millions of dollars, as well as the general manger's and head coach's job on a player you want to know as much about them as possible, right?

But for all the hours and money spent researching a player, no one really knows who is going on to a hall of fame career or who will be a flat out bust. Players that looked like can't miss players have wound up on the heap with tons of other can't miss players. Can you say Ryan Leaf? Players who no one ever heard have gone on to achieve legendary status. Can you say Johnny Unitas or Joe Montana? Granted these were players who were evaluated by people who have spent a life time in football and are damn good at it.

The same can be said of investors and so called professionals when it comes to their predictions about stocks or the stock market. They are well educated and highly intelligent people. However, there is one thing no one's education or training can help them with, consistently predicting the future. No one has and as far as I can tell no one has figured out how to do that on a reliable basis.

For all the research on Goff and Wentz, no one knows how they will fare against NFL competition until they get on the field and do it on a consistent basis. For all the research you or your favorite analyst might do on AT&T, Apple, gold, options, etc. they do not know how they will do in the next six months, two years, ten or twenty years.

No matter how much research is done, all the knowable and predictable info has already been absorbed into its current price. It is only unknowable and unpredictable info and how people around the world react to it that will move the stock or the market. How confident are you in predicting world events and how people around the globe will react to them? How confident would you be in someone Else's ability to do it.

Yet this is the system driving the fortunes, or misfortunes, of investors around the globe. It might be ok for some fun if you should tune into the NFL draft this evening, but not for your life savings.

Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions or comments e-mail brendan@coachgee.com or call 610-446-4322

Flyers Fans & Investors-Feelings Drive Behaviors

Flyers Fans & Investors

Emotions, Feelings Drive Behaviors

by: Brendan Magee

Right off the bat, I have to admit I am not the biggest hockey fan. I don't follow it religiously, but like everyone who grew up in Philly the past 40 years or so, I remember the Broad Street Bullies, the Stanley Cup Championship teams,and I know who Ed Snider is. I know I have to one extent or another been the beneficiary of the work he has done in Philadelphia. 

This past week the team played their very first game in their history that Mr. Snider wasn't alive for. So the roots grow deep between Mr. Snider and the Flyer fan base. When the news went out that Mr. Snider died there was a tremendous and beautiful outpouring of emotion. All last week when you turned on the sports radio, you heard tremendous expressions of love, appreciation, and sadness. Everyone in Philadelphia knows we lost a great man who loved us as much as we loved him. 

On Monday night the Flyers lost, in pretty bad and frustrating fashion, to the Washington Capitals. Frankly, the game was over long before it was over and people who paid a lot of money were more than a little upset at what they were seeing. Remember, this is the first game the Flyers played since Mr. Snider died and in tribute the Flyers organization wanted to make it special.

They gave out white wrist bracelets that would light up the arena as a tribute to Mr. Snider. Unfortunately, the fans fueled by anger, and probably some alcohol, (not all of them mind you) started to throw the bracelets on the ice and created, not only delay in the game, but also gave the Philadelphia sports fan another black eye. 

In either case, calling into a radio show to pay tribute to Mr. Snider or making an ass out of yourself at a game, is not something people calmly and rationally decide to do. The emotions fuel the behavior, some times for the good some times for bad. 

Investors have the same vulnerablity and until they understand and appreciate how powerful their emotions are, they will be run by their emotions and suffer the consequences, not manage them.

You have a great meal at Appleby's. The food is great. The waitress treats you good. The place is packed. You, fueled by great feelings think, how great it would be to own a piece of this franchise? You look up the stock and fueled by that great experience invest $10,000. Was it the feelings that drove the investment decision or rational thought?

You don't hear the phrase thank you as often as you feel you should from your financial planner. You feel taken for granted and under appreciated. You ask yourself, am I with the right guy? In a matter of days you decide to change who your financial planner is. Was that decision based on a calm cool evaluation of the portfolio you have and whether or not the portfolio was working or not? Was what was a the root of the decision you being ticked off at your adviser's lack of attention? 

Were any of the decisions from the examples above based on the academically proven, time tested rules of investing, or were they based on impulse?

There is nothing wrong with emotionally based decisions. Ed Snider made decisions about who should be on the Flyer's roster because he wanted to win a Stanley Cup. He didn't like seeing other teams hoist the Cup. It stung. Like the fans he wanted a winner. However, there are times and situations where unchecked emotions can lead to decisions and behaviors that are in direct conflict with your desired outcome. Mr. Snider at the end of his life admitted there were times when his lack of patience hurt his team.

During the crash of 2008 investors withdrew $58 billion from the stock market in November alone. Was it buy low/sell high that was in control or was it out and out panic that was driving those decisions.

People would like to believe that their decisions and behaviors are the result of calm, cool, reasoned rationalization, like Spock from Star Trek. However, there was a reason Mr. Snider had all those advisers working for him. It was so he had someone close by to counter impulse decisions.

It would be an incredible breakthrough for investors to get just how powerful their emotions are. It would be an incredible benefit to their financial well being if they could get that their emotions will not drive them to prudent behavior and they aren't going any where. The solution is, a coach who they can share with what they are thinking and feeling before any decisions are made. It would safe a lot of heart ache and maybe even some embarrassment.

Rest In Peace Mr. Snider.

Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions and comments e-mail brendan@coachgee.com or call 6190-446-4322.

Jordan Spieth & Investors-Becoming Seasoned Is Painful

Jordan Spieth & Investors-Becoming Seasoned Is Both Painful & Priceless

by: Brendan Magee

Last week in watching the Masters Tournament I was really happy to see Danny Willet win his first major golf tournament. He's newly married, just became a new dad, and seems like a very likeable guy. That being said, I couldn't help but feel sorry for the runner up, Jordan Spieth.

Spieth, is just 22 years old.. He has already won two majors and last Sunday he is standing on the 10th tee of the last round of the tournament with a five stroke lead. Not to many people could envision Spieth not becoming the youngest golfer to win back to back Masters. Not only did he proceed to lose the tournament, he also had to endure the pain of placing the green jacket on Willet's shoulders. Talk about adding insult to injury. Your heart just had to go out to the guy.

As Jack Nicklaus points out, Jordan is young and he will learn from the difficulties he went through. Painful as it is, it is part of the process people go through in becoming a seasoned and experienced golfer or investor.

As it is with golf, there are certain rules that investors pay a big price for when they are broken. Own equities, diversify, buy low/sell high are the rules. They are not difficult to understand. Keep the ball in the fairway and don't three putt are the rules in golf.

As a caddie growing up I saw plenty of average to below average golfers kill their rounds by trying to squeeze a five iron  through a six inch hole in the trees and make birdie when a bogey was easily in hand and would have had them shooting a respectable 85. Unfortunately, with their perspective and aim completely of whack they were left shaking their heads at how they could have possibly shot 105. Believe me, I have seen those golfers and been that golfer who is leaving the course where all you want to do is crawl under a rock.

I can also remember a former client who back in the late 1990's telling me he no longer had to worry about diversification. The stock market had changed he said. This was a very smart guy who rose to the ranks of a vice president within his company. He had a nice house at the Jersey Shore, played golf three four days a week, and was living a great life.

Unfortunately, he also had 70% of his portfolio all in U.S. Large Company Stock. We spoke, better yet I pleaded with him, about the need to diversify. He was positive he would be o.k.  Between 1999 til 2002 his $1 million dollar portfolio dropped to $700,000.  He couldn't believe he could lose so much money. From that time on I never heard the man offer any opinions about the stock market. I think he was too embarrassed to talk about his experience.


As it is with anything, the thing that gets us to operate outside of rules, is ourselves. A golfer can't be forced by anyone to play a shot they do not want to execute. An investor isn't forced into imprudent investment decisions. There aren't investment police who drag us off to jail if we don't make certain investment choices.We do it all on our own. Some times, as golfers and investors we have to make the same mistakes multiple times before we get we are not bullet proof.

Now if the cost of imprudence were only money. It's the pain of embarrassment, frustration, lost opportunity, feeling as if you let yourself and your family down, and loss of confidence that is the real pain. Thank God the good Lord gave us the ability to experience those emotions. Those are the sensations that allow us to relive those feelings of pain and frustration and prevent us from making the same mistakes again in the future.

Unfortunately, as golfer or investor, this is something you have to go through on your own. There is nothing that can replace going through experiences like Spieth or becoming a scarred investor. Don't worry though. The pain is temporary. The experience and wisdom gained as a result are priceless and they will last a lifetime.

Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions or comments e-mail brendan@coachgee.com or call 610-446-4322.

Investment Commercials-Talking Out Both Sides of Their Face

Investment Commercials-Talking Out Both Sides of Their Face

by: Brendan Magee

I'm watching the Phillies game this afternoon (Yeah, we can't stay on that Villanova high forever) and a commercial comes on the air telling people they should invest in gold. The main reasons that were mentioned as to why you should invest in gold were:

1. We are already in a bear market
2. You can't afford to gamble with your retirement money.

Sounds o.k., but lets ask a few questions:

1. If gold is such a great investment for when we are in a bear market, why didn't they put the commercial on before we were actually in a bear market? Why couldn't they have told me in advance when the bear market was going to start? Then I could have really taken advantage of their information. and moved my money to gold before the bear market took effect.

2. I'm not gambling with gold? There's no risk in loading up on gold? The price of gold is never going to fluctuate in the future?

Plain and simple the people pitching gold or any other product have no idea what the future will bring and if they do, they are not going to tell you or me.

Gold and any other security that is not guaranteed in value will fluctuate. By loading up on more of it, I am less diversified, not more. Hence, I am taking on more risk.

My advice, mute the commercials, go and get yourself something to eat or drink, and do not invest based on something you see on television. Go Phils!


Brendan Magee is the founder and president of Inevitable Wealth Coaching with questions or comments e-mail brendan@coachgee.com or call 610-446-4322.

Villanova's Unsung Hero, Kris Jenkin's Mom

by: Brendan Magee


Villanova's NCAA Championship game last night was thrilling beyond belief. Honestly, I do not remember such an amazing game. Villanova, its players and coaches will be, deservedly so, showered in adulation. From this moment on Kris Jenkins' will be associated with college basketball legend.

However, one person will probably be given maybe a few minutes of fame and then will fade away as a distant memory to most basketball fans. Her name is Felicia Jenkins and she is Kris's mother and many years ago the seeds for last night's buzzer beater shot were sown. When Kris was just a little boy learning how to shoot a basketball,. Ms. Jenkins was the one who taught Kris the right way to shoot. Don't laugh!. She was the head basketball coach of a small college in South Carolina.

As they worked on his shot, Kris was not allowed to shoot from beyond the foul lane. She wanted to make sure that Kris developed a fundamentally sound shot and if he was out there heaving 19 foot jump shots his shout would be a heave rather than a pure jump shot. As we can see from the results last night, she did a great job with Kris.

Sounds simple, but in reality, as it is for investors following the rules isn't the easiest. Go to a basketball court and watch the young kids shoot. You will see kids trying to emulate what they see on t.v. Just like Lebron James and Steph Curry,  they'll be shooting from down town. It's fun, but it won't develop a shot that will come through in the clutch. The majority of kids don't want to follow the rules as Ms Jenkins laid them down to Kris. They'd rather go with the flow. Thank God for 'Nova' that Felicia didn't allow Kris to go with the flow! We'd all be singing a different tune today.

Investing is very much in the same vane. There are certain rules that need to be followed all the time in order to assure success. They are not always easy to follow and many times you will be doing the opposite of what everyone is telling you to do.

Inside the lane shooting for investors is, owning equities or stocks, diversifying, and rebalancing (buying low/selling high).  Outside the lane is, moving money around based on someone's forecast about the future, loading up on a stock because you feel or have been told it can't miss, or going with a fund because the fund has been at the top of the performance list for the past 10 years. It's fun and exciting, but doesn't lend itself to any kind of consistency. In each case the investor is trying to anticipate what will be happening in the future. No one can do that consistently.

It would be better to stay inside the lane knowing that with each passing day you are getting closer to your own personal investing championship.

Way to go Wildcats!!

Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions or comments e-mail brendan@coachgee.com or call 610-446-4322.