Taking the first steps and getting started investing is the hardest thing to do. There’s fear. There’s the unknown. There’s the idea that millions of other people know more than you and you’ll get taken advantage of.

Approach investing for the first time the way you would approach learning to drive for the first time – focus on the basics and get those right. For investing, that means starting by setting a financial goal (i.e. what you want to buy, when you want to buy it, and how much it will cost). [Note that “investing” by itself is not a financial goal!]

Most people who participate in plans that offer a match will contribute up to the match (although according to 401k plan manager Financial Engines, 25% of plan participants miss out on their employer match). However, that’s probably not good enough. The estimated amount that a person needs to save for 30 years in order for the nest egg to cover half their expenses for a 30 year retirement, assuming that expenses keep pace with inflation and don’t increase over time, is 16.2%.

When you are just starting out, your first priority should be building up an emergency fund, and consider investing once that’s established. It’s important to form saving and investing habits by setting aside money on a regular basis. Your assets will build over time, and you’ll gain momentum and feel encouraged as you watch your balances grow. Before starting to invest, reflect on your objectives, timeline and risk tolerance.

Keep the following three D’s in mind when it comes to investing: Discipline, Diversification and Diligence. As studies have shown over the years, the huge gap between investment returns and investor returns is due to investor behavior, or the tendency of all investors, professional and beginner, to shoot themselves in the foot. Behavioral Finance has become a huge field for this very reason. Diversification is the only free lunch in investing, and thus is a must for all portfolios. Investing requires Diligence since we are talking about real money. Know what you own and why, and keep on top of how it is doing without driving yourself and engaging in unnecessary trading.

It is best for individuals to begin saving as soon as possible in the first job after graduating college. Many recent grads will make excuses to not save, or desire for spending money on entertainment and lifestyle as opposed to prioritizing the future. The first step in creating and executing a savings plan involves goals. After goals and earmarking how much you should save, the next important consideration is how you will invest your money. If you’re young and just starting out, be as aggressive as possible as hopefully you won’t touch the money until retirement.

The best investing advice for beginners from 13 experts on investing and financial planning share how new investors need to automate, save, and not worry.
— Read on thecollegeinvestor.com/16553/the-best-investing-advice-for-beginners/

Cannabidiol (CBD), hemp oil and health/wellness-related products.

• Hemp-derived CBD oil is made from high-CBD, low-THC hemp.
• Hemp contains only trace amounts of THC, these hemp-derived cannabidiol oil products are non-psychoactive.
• Medical marijuana products are made from plants with high concentrations of psychoactive tetrahydrocannabinol (THC).

CBD is present in higher quantities in hemp. Hemp’s chemical makeup is dominated by CBD. By definition, hemp’s THC content is no more than 0.3 percent, nearly 10 times less than the least potent strain of marijuana. Instead, hemp naturally has more CBD vs THC, making it an ideal source of CBD from cannabis.

CBD is legally available in the United States, but it must be derived from imported high-CBD, low-THC hemp. CBD is no longer listed under the Controlled Substances Act, so it’s legal in all 50 states provided it’s not extracted from marijuana.

Research continues to indicate that even large doses of CBD are well tolerated and safe. There have been some reports of dry mouth, light-headedness, and drowsiness. A recent research review examining the safety and side effects of CBD concluded that CBD appeared to be safe in humans and animals. Even chronic use of CBD by humans showed to cause no adverse neurological, psychiatric, or clinical effects.

Hemp — also called industrial hemp — refers to the non-psychoactive (less than 1% THC) varieties of Cannabis sativa L. Twenty-nine U.S. states and Washington D.C. have passed their own cannabis policies permitting the use of medical marijuana with high levels of tetrahydrocannabinol, provided it’s recommended by a licensed physician. Eight of those states and Washington D.C. have gone a step further and legalized the recreational use of marijuana and THC. Cannabis has shown encouraging signs as a treatment for various medical conditions and has become increasingly more acceptable to the public and society.

In 1937, the Marijuana Tax Act strictly regulated the cultivation and sale of all cannabis varieties. The Controlled Substances Act of 1970 classified all forms of cannabis — including hemp — as a Schedule I drug, making it illegal to grow it in the United States (which is why we’re forced to import hemp from other countries as long as it contains scant levels of THC — 0.3% is the regulation for hemp cultivation in the European Union and Canada

The Industrial Hemp Farming Act (H.R. 525 and S. 134) was introduced in the House and Senate. It would remove all federal restrictions on the cultivation of industrial hemp, and remove its classification as a Schedule I controlled substance.

1. CBD has the following benefits:
   • Stress Relief & Improvement in Mood
   • Chronic Pain or Acute Pain Relief
   • Reduced Itchiness or Other Skin Irritations
   • Improved Sleep
   • Reduction in Joint Pain & Inflammation
   • Eased Nausea or Vomiting

“All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope.”

Jesse Livermore

Recently, I read that multiple studies have shown that when the stock market goes up, investors’ money flow into it. And when the market goes down, investors’ money flow out of the market.  This type of behavior would be like a shopper heading to the grocery store every time the price of produce goes up and then returning the produce to the store when it goes on sale – but the store will only buy it back at the sale price. 

This behavior of buying high and selling low results in investors market returns to be substantially less than historical stock market returns.   

Behavior Gap is the difference between an investment’s return and an investor’s actual return. The “gap” is where investors’ behavior—their actions and emotions–come into play.  Without investor’s emotion, the difference would be minimal between what the investor would have earned in compared to what they actually saw in their investment account. 

According to Vanguard founder, the legendary investor Jack Bogle, the average equity mutual fund investment gained 173% from 1997 to 2011, but the average equity mutual fund investor earned only 110% during the same period. From their analysis, this gap is directly attributed to investors allowing their emotions of “greed, fear, exuberance or despair” to control their investment decisions.  

Additionally, every year since 1994, Dalbar’s Quantitative Analysis of Investor Behavior (QAIB) has measured the 20-year average annual compound rate of return for the average large cap equity mutual fund in the U.S. and the average return realized by equity mutual fund investors.   

For the 20 years through 2007, Dalbar’s QAIB results demonstrated that the average equity fund produced 10.81%, and the average equity fund investor produced 4.48%. From the analysis, it is apparent that over the 20 year span, the average fund investor consistently realized much less investment return than the return of the average fund.   

“People have a tendency to sell at the bottom when the market is at its worst and buy at the top when the market is at its best. Inherently, this leads to poor investment returns.”

Carl Richards

Additionally. According to Dalbar, most investors took performed poorly in the second half of calendar year 2018 — in fact investors averaged a loss of 9.42% — compared with the S&P 500, which had a loss of 4.38%.  And, during October 2018, in which the S&P 500 was down 6.84% while the average equity investor return was down 7.97%; and in August, when the S&P 500 was up 3.26% and the average equity investor was up only 1.80%.  The QAIB research concluded that the average investor didn’t have much success whether the market was good or bad in 2018. 

In a January 2012 Forbes interview, Carl Richards, author of the  book, The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money, pointed out that investors are “…responsible for their behavior.”  He states that investors are responsible for spending less than they earn; to saving and investing with discipline. Further, he states that it has become easier for investors to blame banks, Wall Street, credit card companies, politicians, etc., for their financial mistakes…but blaming others does alter the impact their own behavior has on investment account. Thus, it’s better for investors to own up to their responsibility and learn from their mistakes. 

Fortunately, there are several actions investors can take to protect themselves from making emotional decisions during times of eye raising market volatility and to reduce the impact of the Behavior Gap on their investment accounts.   

• First, investors can stay true to their long range financial plan and make a conscious decision to do nothing since short term market volatility should not matter.   
• Secondly, they should never sell or have any reason to sell stocks in a down market.  If an investor’s portfolio is properly allocated and they have set aside three to six months of living expenses in an emergency fund, they should be able to ride out short term market volatility.  
• And, finally, investors can seek professional help and confer with a financial adviser. If an investor is unable to control their emotions, they should not be investing on their own.  

The Behavior Gap by Carl Richards – Four Pillar Freedom

The behavior gap refers to the gap between investment returns and investor returns. Due to fear, greed, and irrationally, most people buy and sell at the wrong times and lose money. The best investment strategy is often the simplest investment strategy.

— Read on fourpillarfreedom.com/the-behavior-gap-by-carl-richards/

Photographs depict the many wonderful sights, tastes and activities from The Grand at Moon Palace Golf and Spa Resort in Cancun. Disfrutar (Enjoy)!!!

Barron’s Big Money poll of professional investors finds a drop in the percentage of bulls from last fall. Why the pros like tech stocks and fear Tesla
— Read on www.barrons.com/articles/stock-market-big-money-poll-51556309101

Investors are four long month away from the market volatility and meltdown experienced by investors in late December 2018. During the market upheaval, prognosticators were predicting the death of the bull market, the end of global economic growth and the advent of recession in the U.S. and globally.

In short, the bears were out of their hiding place to proclaim that the financial sky was falling and that public companies would experience an earnings recession that would drive U.S. equity markets down more than ten percent from their September 2018 highs.

Granted, the U.S. equity markets did experience a significant correction that spooked even the most seasoned investors in December, the Chinese and European Union economies were were showing signs stagnation, and calendar year fourth quarter U.S. GDP grew 2.2 percent annualized. 

Today, the financial horizon reveals a much more positive disposition. U.S. public corporations first quarter 2019 earnings are beating analyst expectations, Chinese economy has appeared to bottom and is showing signs of recovery, and Europe has apparently stabilized despite negative central bank interest rates. And, on top of the many positive indicators, the U.S. Federal Reserve has adopted an accommodating policy of pausing federal fund interest rates hikes and tightening the monetary supply.

My late April 2019, the U.S. equity markets (S&P 500 and Nasdaq) have achieved new all time closing highs and the Dow Jones is within striking distance of its all time high.. Fear of missing out of the market steady rise is bringing those investor that have been sitting on the sidelines back into the market.

Believing the equity markets will continue its steady rise has investors chasing hot technology stocks and driving up the prices of recent IPO’s. Recently, Jamie Dimon, the CEO of JPMorgan Chase, was reported as stating that he believes the U.S. economy is okay citing strong corporate balance sheets, positive consumer confidence and rising income.

With all the positive news economic and equity market news, investors should exercise caution and always consider equity risk before jumping back into the revved up markets because of the fear of missing out and chasing hot technology stocks. This course of action rarely bodes well for impatient and exuberant investors.