Patriot Wealth - May 2020

MAY 2020

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PATRIOT WEALTH

BEHAVIORAL FINANCE AND MARKET DOWNTURNS PITFALLS TO BE AWARE OF

It may be a good time to remember the psychology behind investing. Behavioral finance explains why investors tend to react emotionally instead of rationally. There are dozens of emotional biases that may apply to investing. Let’s talk about a few of the more common ones that may come into play during or after a market downturn. 1. RECENCY BIAS Recency bias relates to our ability to recall information obtained recently more easily than information we received further in the past. The 11-year bull market in U.S. stocks that started after the financial crisis of 2007- 08 receded is a perfect example of this. Over the last decade-plus, most investors became accustomed to seeing nothing but gains in their investment accounts, so much so that many investors simply forgot the pain of 2007 and 2008. Some even believed it would go on for even longer. This, of course, is not (and never will be) the case. In recent months, markets across the globe were in a freefall due to the COVID-19 pandemic and trouble in the oil patch, bringing the bull market to a screeching halt. But remember: Just like the good times, the bad times don’t last forever. 2. HERD INSTINCT At some point in your life, you may have heard — or perhaps even posed — the question: “If everyone else jumped off a bridge, would you?” (I know I’ve been on both sides of that query!) Well, the truth is that when it comes to investing, many investors might say “yes” to that question. It’s tempting to base investment decisions — either buying or selling — on

what everyone else is doing, rather than performing your own research and analysis. Herd instinct is a result of the human tendency toward FOMO (or fear of missing out). 3. LOSS AVERSION Research from preeminent behavioral finance experts Daniel Kahneman and Amos Tversky shows that investors tend to feel the pain of financial loss far more intensely than they feel the pleasure of financial gain of the same size. Investors who have lived through painful market crashes may become fearful of further losses. This can lead to inappropriate investment decisions — such as pulling all money out of the market and into a savings account. Sure, money in an FDIC-insured bank account is safe, but it’s still not totally risk-free. Inflation risk — or the risk of the returns you earn from a savings account not keeping up with the rate of inflation — is a very real possibility. So, what’s the best way to avoid behavioral biases during challenging markets? Always revert back to your long-term plan to ensure you’re still on track to fund the goals you’ve declared. Continuing to check in with your plan can help you keep your emotions in check and prevent you from making decisions out of panic or fear. Reach out to us today if we can help in any way. Make it a great May!

1 https://retirement.tips/blog/behavioral-finance-and-market- downturns/

These articles are designed to provide general information on the subjects covered. They are not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Patriot Wealth and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney. Investment Advisory Services is offered through Retirement Wealth Advisors (RWA), a Registered Investment Advisor. Patriot Wealth and RWA are not affiliated. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.

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THE PROS AND CONS OF BUYING A HOME IN A 55-PLUS COMMUNITY

PRO: AMENITIES ARE INCLUDED. Most 55-plus communities include amenities like exercise classes and educational programs for their residents. They also invite community organizations and leaders to speak about local issues or upcoming elections. Some even have a clubhouse or dining hall for social gatherings. Save money by taking advantage of these programs instead of paying for a gym membership or a course at the local community college. CON: IT’S A LIMITED BUYER’S AND RENTER’S MARKET. Most people who buy in a 55-plus community plan to retire there. If this is your original intention but your plans change down the road, you might have a harder time selling your home here than you would in a community that is open to people of all ages. Make sure to budget for those potential holding costs and plan accordingly. Regardless of where you decide to buy, be sure to consult an experienced real estate agent and a financial planner. Here’s to living out your golden years in comfort and convenience!

Depending on your wants and needs, buying a home in a 55-plus community might be a financially savvy way to set yourself up for retirement. But is it the right decision for you? Here are a few financial pros and cons associated with moving into one of these neighborhoods. PRO: THE HOMES ARE IN EXCELLENT CONDITION. Oftentimes, 55-plus communities provide maintenance services, including housekeeping and landscaping. Also, it’s likely that only a handful of people have occupied the home since it was built, so buying in a 55-plus community means you’ll get a property in excellent condition with less wear and tear. CON: YOU’LL HAVE TO PAY A MONTHLY FEE. Unfortunately, all the great stuff doesn’t come free. Usually, you’ll have to pay an extra monthly bill, similar to a homeowners association fee, to live in a 55-plus community. Some communities include all maintenance and amenities in the monthly rent or mortgage (some even cover utility bills), but make sure you understand what is and isn’t covered before you sign a contract!

HAPPY TRAILS! GET OUT FOR A HIKE ON THESE LOCAL PATHS

NEUSE RIVER TRAIL WHERE: Anderson Point Park, Raleigh DIFFICULTY: Easy Designed for hikers of all skill levels, the Neuse River Trail rewards those who venture along it with gorgeous views of lakes and Raleigh neighborhoods. This trail is dog-on-leash-friendly and is a popular choice for hikers during any time of the year. The pathway is paved, and light hills help hikers keep their heart rate up without much strain.

With our beautiful spring weather in Raleigh, there’s no better place to be than on some of our local trails! Make sure these three hiking paths are at the top of your list, and check NCParks.gov for any possible closures. WILLIAM B. UMSTEAD STATE PARK WHERE: Raleigh DIFFICULTY: Easy to moderate There’s no landscape quite like the lush forests of Raleigh, and no park better exemplifies that than the William B. Umstead State Park. With hiking, biking, and horseback riding trails, there’s a hike for every outdoorsy person in your family. Enjoy the winding nearly 6-mile loop on the Company Mill Trail, or opt for a picnic and a short walk at Oak Rock Trail. For those riding bikes and horses, the 13 miles of multiuse trails offer a variety of options.

Creek Greenway Trail through the eastern edge of Lake Johnson to enjoy gorgeous views. If you want to work up a sweat, the park also features the QR Fitness Trail, complete with six stations designed to target your upper and lower body in between spurts of running or walking! A mobile device is required to access the workouts.

LAKE JOHNSON PARK WHERE: Raleigh DIFFICULTY: Easy

Rounding out the list of local hikes are park trails that loop participants around a local lake and offer extra fitness opportunities. For those looking for a leisurely hike, follow the Walnut

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You may have worked your whole life to prepare for retirement, but now that you’re nearing it or already retired, you may be asking yourself, “Now what?” According to a study by RBC Wealth Management, about one-third of current retirees spend their days much differently than they anticipated they would prior to retirement. This could be due to family or health changes, but a big factor in this, writes Forbes senior contributor Bob Carlson, could be a shift in your goals as you age. For some retirees, the activities they planned to fill their retired days are not as fulfilling once they are in retirement, and many find themselves looking for alternatives. If you’re looking for the next best step in your golden years, consider these benefits of finding a local job. FLEXIBILITY You’re not entering the workforce looking for a career, so you have options when it comes to finding a job in retirement. You could find part-time or seasonal work or go for a full-time gig if you like the job. You could even look to industries you never considered, such as breweries, restaurants, local shops, transportation, and schools. Just consider what you enjoy doing and how you want to fill your days before jumping in. SUPPORTING THE COMMUNITY What could be better than seeing your community thrive? Perhaps it’s being part of the reason why the community is booming! Look for part-time work that supports local businesses, and you’ll find you become part of something larger than yourself. You can connect with regulars and tourists while working in places like museums, stores, and local government. EXTRA CASH FLOW Our job is to help you save for retirement, but the benefits of a job in retirement can include padding those savings. If you can live on part or all of your new salary, you can continue saving for later in life while pulling out the mandatory requirement each month. You could save your extra cash for something fun, put it away for your grandchildren, or boost your lifestyle. Ultimately, this money is a bonus, and it’s up to you to decide what to do with it. Learn more about finding a job in retirement at AARP.org, and contact our team at Patriot Wealth with any cash flow questions prompted by your new job. THE BENEFITS OF WORKING IN RETIREMENT GET TO WORK!

STICKY AND SWEET PORK ‘RIBS’

INGREDIENTS

Inspired by Bon Appétit

• 2 heads garlic, cloves separated • 3 thumbs ginger, chopped

• 1/3 cup oyster sauce • 1/3 cup toasted sesame oil • 5 lbs boneless pork shoulder, flattened • 3/4 cup brown sugar • 1 tbsp molasses

• 1 cup hoisin sauce • 3/4 cup fish sauce • 2/3 cup honey • 2/3 cup rice wine • 1/2 cup chili oil

DIRECTIONS

1. In a blender, purée garlic, ginger, hoisin sauce, fish sauce, honey, rice wine, chili oil, oyster sauce, and toasted sesame oil until smooth. 2. Reserve and chill 1 1/2 cups for later use. 3. In a bag, add the remaining mixture and pork shoulder. Marinate for at least 8 hours. 4. Using a convection plate on the grill, cook pork until the thickest part reaches an internal temperature of 140–145 F. 5. In a large saucepan, simmer brown sugar, molasses, and reserved marinade for 6–8 minutes. 6. Baste the pork with the brown sugar glaze for 2 minutes before serving.

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PATRIOT WEALTH 4350 Lassiter at North Hills Ave. #330 Raleigh, NC 27609 INSIDE THIS ISSUE Behavior Finance and Market Downturns PAGE 1

PRST STD US POSTAGE PAID BOISE, ID PERMIT 411

PATRIOTWEALTHNC.COM PHONE | 919.322.4113

Is a 55-Plus Community Right for You? PAGE 2

Take a Hike on These Local Trails PAGE 2

Sticky and Sweet Pork ‘Ribs’ PAGE 3

Why You May Love Working in Retirement PAGE 3

Bird-Watching for Beginners PAGE 4

BIRD-WATCHING FOR BEGINNERS WHY MAY IS THE BEST MONTH TO START

Bird-watching is like a lifelong scavenger hunt that you can play anywhere on Earth. The activity provides a mixture of science, travel, and beauty, and it’s a chance to get outside for feathered adventures and quiet reflection. The month of May is a great time of year to go birding because rising temperatures prompt spring migration. So if you’re eager to begin bird-watching, there’s no better time than now. Here are some tips to get started. EDUCATE YOURSELF Thousands of species of birds span all corners of the globe. That’s why finding them is an exciting prospect — there’s no end to the hunt! Start by researching birds that are native to your location. Purchase a field guide with pictures of each bird and maps of their range and use it to figure out where different birds live. From there, it’s easy to pick your

first spotting goal. You can even get yourself extra excited by watching a few bird documentaries. GEAR UP One of the best things about birding is that you don’t need a lot of equipment to do it. As long as you’ve got your field guide and comfortable walking shoes, the only other thing you’ll need is a pair of binoculars. And they don’t have to be fancy. As long as they can zoom

underwhelmed. So use your field guide to home in on a single bird and go find it. It may be local, or you can plan a trip to a specific bird’s natural habitat. Stay focused and don’t get distracted by other species. The thrill that comes with spotting your first bird will keep you coming back to find the rest.

Bird-watching is a wonderful

hobby because it’s easy to get started and can last a lifetime. As long as you can walk, drive, or look

in on faraway trees and perches, they’ll work for now. You can always upgrade later.

out a window, you can be a birder. So

what are you waiting for? Get out there and find some birds!

GO EXPLORING Your very first birding excursion is important because you don’t want to be overwhelmed or

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