The mind is a powerful tool. It can protect, justify, trick and even make good things happen by its sheer will. A good example is the placebo effect, a biology-based phenomenon with proven positive results.1

But there are limits to what a positive mindset can truly accomplish. For example, a 2016 survey by asset manager Schroders found that American investors may be expecting unrealistically high returns. The average stock market yield globally is 3.8 percent, but investors over the age of 35 think they can achieve 8.4 percent. Millennials are even further off the average mark, anticipating returns of 10.2 percent.2

Simply believing your investments will pay off won’t make it happen. As financial advisors, we’re here to help you analyze your personal financial situation and create strategies utilizing a variety of investment and insurance products that can help you work toward your financial goals.

The positive outlook consumers have developed after the recession could be a good sign for our nation’s spending and continued economic rise. However, this investor positivity and optimism can actually be a negative factor if it leads to an irrational confidence in investment choices.3

According to the Wells Fargo/Gallup Investor and Retirement Optimism Index, even after the volatile swings of this year’s first quarter, investor optimism regarding the stock market was pretty high. Most investors (81 percent) said they “rode out” the volatility and did not make changes to investments, while only 4 percent reported selling stocks in response to market changes.4

That’s a good sign, because doing nothing can be one of the most difficult actions when an investment starts losing money. Human nature is hard-wired to fight or flee; people may want to liquidate for cash, trade for something better or just blame somebody. Part of that is fueled by the enormous amount of information available to investors, which makes it seem like there’s always somewhere else we can go for higher returns. But studies show that investors who overtrade tend to earn mediocre returns once all of those transaction costs are factored in.5

Every year, the Employee Benefit Research Institute conducts a Retirement Confidence Survey to gauge how confident Americans feel about their retirement income prospects. In 2016, the survey found that only 28 percent lack confidence in their financial preparations for retirement, with 28 percent feeling very confident and 43 percent somewhat confident. Among retirees, the survey found that 39 percent are very confident (up from 18 percent in 2013) that they have enough money for a comfortable retirement.6


Content prepared by Kara Stefan Communications.

1 NPR. Jan. 26, 2016. “How Meditation, Placebos and Virtual Reality Help Power ‘Mind Over Body’.” Accessed July 8, 2016.
2 Suzanne Woolley. Bloomberg. June 16, 2016. “Wanted: Big Returns, Low Risk. (And Millennials? They Want 10.2%).” Accessed July 8, 2016.
3 Shreenivas Kunte. CFA Institute. April 21, 2016. “The Behavioral Continuum: What’s the Best Behavioral Bias?” Accessed July 8, 2016.
4 Wells Fargo. March 10, 2016. “Wells Fargo/Gallup: Stock Market Jitters Drive Investor Confidence Down; Majority Ride out the Volatility.” Accessed July 8, 2016.
5 Fidelity International. December 2014. “Behavioural finance: Overconfidence.” Accessed July 8, 2016.
6 EBRI. March 2016. “The 2016 Retirement Confidence Survey: Worker Confidence Stable, Retiree Confidence Continues to Increase.” Accessed July 8, 2016.


This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.  If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference. 

The content presented is for informational purposes only and is not intended as offering financial, tax, or legal advice, and should not be considered a solicitation for the purchase or sale of any security. Some of the informational content presented was prepared and provided by tMedia, LLC, while other content presented may be from outside sources believed to be providing accurate information. Regardless of source no representations or warranties as to the completeness or accuracy of any information presented is implied. tMedia, LLC is not affiliated with the Advisor, Advisor’s RIA, Broker-Dealer, or any state or SEC registered investment advisory firm. Before making any decisions you should consult a tax or legal professional to discuss your personal situation.Investment Advisory Services are offered through SHP Wealth Management LLC., an SEC registered investment advisor. Insurance sales are offered through SHP Financial, LLC. These are separate entities, Matthew Chapman Peck, CFP®, CIMA®, Derek Louis Gregoire, and Keith Winslow Ellis Jr. are independent licensed insurance agents, and Owners/Partners of an insurance agency, SHP Financial, LLC.. In addition, other supervised persons of SHP Wealth Management, LLC. are independent licensed insurance agents of SHP Financial, LLC. No statements made shall constitute tax, legal or accounting advice. You should consult your own legal or tax professional before investing. Both SHP Wealth Management, LLC. and SHP Financial, LLC. will offer clients advice and/or products from each entity. No client is under any obligation to purchase any insurance product.
Was this information helpful? Should we publish more like this?