Understanding when to invest and sticking to your financial plan.

<div class="block">Investing can be a thought that is placed on the back burner for a number of reasons, including a lack of information and even fear of losing money. Nancy Tengler, CEO and CIO of Laffer Tengler Investments, joined &#39;Stretching Your Dollar&#39; to provide some tips on growing your money. She talked about when people she seriously begin considering investing and stressed the importance of sticking to your plan.</div>

Stretching Your Dollar

Stretching Your Dollar: The Right Time to Begin Investing

Well, investing can be a beneficial way to grow your wealth, but going about it in a volatile market and without a guide book can be challenging. Joining me now with the road map for investing is Nancy Taler, who's the CEO and Chief investment Officer at Laffer Taler Investments. Nancy is also the author of a new book called The Women's Guide To Successful Investing and Nancy. It's great to have you on the show. And I think for people, male or female, a good question is when should people really start thinking about investing? Well, Kristen, thanks so much for having me. I think one of the biggest mistakes that investors make is they don't think they have enough money or they think they're too young or too old. And so let me disabuse those all of those assumptions. Uh I sat on the board for many years of the Arizona Council of Economic Education. There's a National Council and then one in almost every state and I taught the stock market game to grade schoolers, middle schoolers and high schoolers. And you would be amazed at the kind of work these young people do on stocks and reporting on them. So I, I think the, the earliest or the, I mean, you could start them in any time I bought a share of stock for my son when he, when he was born. Uh but we started talking, talking about investing around the dinner table when, when they were 9, 10, 11 and 12. And uh they have a very broad awareness and that's when we should get our young people to be thinking about it. Conversely in the book, I write about a case study, Stephanie Muca, who didn't begin investing until she was on a, a widow and on a fixed income. And when she died, she left behind about $5 million to charity. So there are, there are a lot of misconceptions about when and how in, in today's world, you can buy a fractional share. So you can start with zero in your brokerage account, put 50 20 whatever the amount of dollars every month and you'll be able to invest right away. Ok. So lots of ways to get started. Obviously, you mentioned even a fractional share is some place to start. How important is it to stick to a plan when investing and how do you develop that plan? Well, so that's why I wrote the book because everybody has a different risk tolerance and, and most women in particular, but there are a lot of men as well. Don't, don't think they have the wherewithal or the data, but I describe all the places you can get free data. Uh and also many uh situations where uh investors have learned to discipline. And II I talk about a lot of my clients from over my 40 years of doing this and what I've learned from them. And one of the things I've learned and this was from the Great Peter Lynch, however, was, don't let the market scare you out of stocks. And so I have a chart in the book that shows if you had stayed invested from January 1, 1995 to the end of 2022 you would had an annualized return of about 8%. If you missed the 40 best days, you had a negative annualized return of 0.1%. That's every year. That's how important it is to stay invested and not, you know, not get scared in a market like we have right now. Ok. So I think that's a good point, right? Because during volatile times, sometimes our emotions can get the best of us, right? It's just a fact of life. And so how would you suggest that people manage their emotions when trying to manage their investments? Well, that's why there's a whole bunch of stock case studies in here. Some that I've uh bought over the years. 11. I think the heading is when Starbucks got roasted, I bought it and that was in 2007 and then the stock went up pretty dramatically until 2008 and I bought it at 30 it went down to $7.5. And happily, I didn't sell it. I should have bought more, but just by not selling it, I've earned an annualized return of about 18% every year in that stock. And there have been a lot of problem periods for Starbucks. But when you buy great companies with, you know, great brands, solid management teams, you, you can rest assured that they're gonna find a solution a a way out of any problem. And those are the companies you want to own for a lifetime. Apple is another great example. When Tim Cook take took over, um everyone lost confidence in the company. We were in buying it um for a lot of anecdotal reasons. And that's one of the things I think women do really well. Um is they do research and that's what the book shows women do more research, they're less competitive and so their returns over time according to a number of studies, these are not my studies show that women actually make better investors than men. Ok. So because your book does focus on women, Nancy and you are a successful woman yourself who built a great business in investing. Do you think that investing strategy should differ between men and women? No, not at all. I think men tend to be much more focused though on beating a benchmark and I, I'm probably more like a man in that regard, but women just, I, I, they want to save for and, and invest for future events in their lives. Women consistently identify as not wanting to become a burden to their families and, and they also relate to being very good savers like 70%. The problem is the average age of a widow in the U is 59 which is exactly how old I was. The average age of a first divorce is 30. So women, it's a bad time when you're grieving or angry to then try to learn about the investment strategy. It's better to engage now. And even if you have an advisor, um you, you will make a much better client and you will get better returns by being knowledgeable. What's the best way to keep yourself honest while investing it throughout your journey, probably many decades for people. Well, I think one of the biggest mistake most people make is uh and I call it the biggest risk is not taking enough risk. And so 11 of the things that I I point out in the book is some asset allocation models that were designed by experts and then measuring those over time to show what you're giving up when you're not taking enough risk. But I, but I think also one of the things I do and it's super immature. But when the markets really Squire like it is now or it was in 2008, 2009. I don't look at my statements because I, I don't want to do the wrong thing. I know intellectually stocks go up two thirds of the years that they've been measured. And so if I just wait it out or add to it, like we do with our 401k every two weeks, I'm gonna be in much better shape, uh, coming out the other side because what follows every bear market, Kristen? That's right. Usually gains. That's definitely how it's worked. When do you think it's worthwhile Nancy for people, individuals to actually seek out a professional, for help with their investments? So I think it's when your assets become, uh I, I think through the busier part of your life as you're accumulating assets. So I, I um actually went out and hired an advisor at one point because I retired from the business. And uh it was a really interesting exercise, Christin because I was the chief investment officer of a very large firm in San Francisco where I'm a native from. And uh I knew everyone but we went to these meetings and they would ask my husband all the questions and then he would turn and ask me and it was very uh uh offensive because it was so inefficient. But we were in a period of our lives where we just didn't have time to pay attention. And uh I only lasted with an advisor for a year because I, of course, I didn't like anything they did. But um I think anybody who has a couple $100,000 might be a candidate and, and that's a good time to start looking for advisors and determining who you can trust, who shares your goal. And full transparency is super important. We tell our clients everything we're doing, uh particularly in, in bear markets when, when they're, they tend to be more nervous, Nancy. Great insight. Congrats on the book, Nancy, we appreciate it.