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Mastering the Market Without Trying to Outsmart It

2023-7_Mastering the Market- How to Succeed Without Trying to Outsmart It

By Yale Bock

Many people believe that the most successful investors are those who carefully analyze trends to find the perfect moments to buy and sell investments. They also think that if you don’t follow this approach, you can only expect average investment results and never see real success.

But as an experienced investment advisor with over 20 years in the industry, I’m here to tell you that this isn’t true. You don’t have to constantly plot, plan, and try to outsmart the market to be a successful investor. In fact, sometimes these actions can harm your overall portfolio. Let me share with you three reasons why.

You Can’t Outsmart the Market

Outsmarting the market usually involves attempting to “buy low and sell high” by analyzing current market trends for inefficiencies or volatility indicators. This is a common strategy used by both portfolio managers and everyday investors alike. It may work sometimes, but it is far from perfect. 

In fact, a new SPIVA report shows that 68% of active fund managers underperformed their benchmarks in 2022. The long-term results of this report are even more significant: 84% of active fund managers underperform after 5 years and 95% underperform after 20 years.

Not only does outsmarting the market involve guessing when to buy in, but you then have to guess when to sell. That means for every gain, you have to be right twice to make timing the market worth it. Unfortunately, market moves can only truly be spotted in hindsight, and outsmarting the market is often closer to playing the lottery than it is to an educated guess.

You can be a successful investor simply by relying on time in the market instead of timing the market. The longer you stay invested in a particular asset, the more likely you are to experience growth over the long term. Considering the S&P 500 Index has averaged around 9.4% for the last 50 years, this strategy doesn’t seem all that bad. Buying and holding often results in much lower stress and a more secure investment experience for the average investor over the long term.

Riding the Wave Is Less Expensive

Trying to outsmart the market has been around just as long as the market itself, and though it rarely works, many people keep trying. Not only are you less likely to outperform the market through market timing, you could further reduce your returns depending on how often you trade. That’s because outsmarting the market can be expensive. 

Depending on your account type, asset class, and where you are executing your trades, you will likely be charged for every purchase and sale you make, and that’s on top of any taxes owed on gains. The more frequently you trade, the higher your transaction costs will be.

If you held the assets for less than a year, your gain will be taxed as ordinary income at your marginal tax rate, which can be as high as 37%. 

Even if you find an actively managed fund that is able to beat the market, they have to do so by a wide enough margin to cover its higher costs and more. As such, even some funds that beat the market end up with lower returns once fees are taken into account.

Staying Invested Produces Better Returns

Many investors will sell their positions during times of volatility in order to avoid or reduce a loss. But how do they know when to buy back in? This is one of the most difficult aspects of outsmarting the market, and it often leads to much less growth than staying invested the whole time would have produced. 

For instance, a recent study by Schwab Center for Financial Research found that bad market timing is worse than investing immediately, regardless of the market conditions at the time of investing. This indicates that even in market downturns, or just before a downturn, investors who invest immediately and remain invested will be better off than those who stay on the sidelines or attempt to time the market. 

The time value of money tells us that a dollar today is worth more than a dollar tomorrow, and this is certainly the case when it comes to investing. The longer you are invested, the more likely you are to ride out the fluctuations of the day-to-day market and experience growth. 

Are You Set Up for Financial Success?

The stock market is full of surprises; trying to predict its every move is like trying to win the lottery. Instead of chasing elusive winning strategies, successful investors focus on the long term and block out the market noise. The key to a successful investment strategy is one that withstands market fluctuations.

At Y H & C Investments, we are dedicated to helping you attain the life you want by aligning your finances with your goals and values. Our experienced team works with you to design a robust long-term investment strategy that can withstand market fluctuations. To find out if you might be a good fit to work with Y H & C Investments, reach out to us at information@y-hc.com or schedule a meeting here. Together, we can create a plan to get you closer to realizing your financial dreams.

About Yale

Yale Bock is the owner and operator of Y H & C Investments, a registered investment advisor (Nevada and California licensed) located in Las Vegas, Nevada. Yale directs all operations, from investment research and portfolio management and asset allocation to trading decisions, trade execution, risk management, and client communication. With experience investing capital personally and on behalf of his clients for 20 years, he aims to maximize investors’ assets—and do so as tax efficiently as possible. Yale has a passion for investing and enjoys the challenge of the markets, and has a proven track record of reliability and good judgment. He thrives on partnering to help people reach their life goals through investing: saving for kids’ and grandkids’ college, personal retirement, and company retirement plans (just to name a few). His clients can experience comfort and confidence that they have someone in their corner they can depend on to help them succeed in a responsible and tax-efficient way.

Yale earned a bachelor’s degree in economics and an MBA from UC Irvine and holds the Chartered Financial Analyst designation. He is married to Jhanine Ilana Aronson and together they have a precious teenage daughter, Diamond Emerald Bock. Outside of work, he enjoys sports (baseball, football, basketball), politics, and reading. To learn more about Yale, connect with him on LinkedIn.

Why I became A Financial Advisor

2023-6_Why I Became a Financial Advisor

By Yale Bock

Hello and welcome to my blog! I took some time off from writing, but I’m starting up again so I thought this would be a good time to introduce myself to those of you who may be new here, or reintroduce myself to my long-term clients. I also want to provide some background information about myself, what led me to this career, and why I became a financial advisor. 

Getting Started

I’ve always been drawn to money and how it’s used, and I’ve always been good with finances. Putting both my passions and skills together only made sense when it came time to choose a career path. Pursuing a bachelor’s degree in economics and then an MBA seemed like the best route to a fulfilling career. After graduating from the University of California, Irvine, I worked in the business field, eventually moving into a management position. 

At that point, I had been investing my own capital for a long time, was familiar with some of the best investors out there (like John Malone and Sam Zell), and studied their methods. I saw how much success they had investing for others and knew I could use my skills and knowledge to help people with their finances. That’s when I decided to pursue a career as a financial advisor. 

Branching Out

In 2005, I started my firm, mainly helping family and friends manage their finances and investments. My home base is Las Vegas, NV, but I’m also licensed in the state of California and serve clients there as well. 

Then in 2008 I furthered my financial education by earning the Chartered Financial Analyst® designation. As a CFA®, I annually attest and sign a code of ethics, pledging to act ethically as a fiduciary by putting clients’ interests first. 

While each client’s investment strategy will be as unique as they are, and I tailor my services to their needs and goals, with every client I aim to maximize their assets using the most tax-efficient strategies available. This allows them to pursue their ideal financial future with confidence.

Why I Love What I Do

While I Iove the challenge of investing and navigating the financial markets—and that is what initially drew me to this career—I am passionate about helping my clients because of the life-changing impact finances can have. Investing well helps clients realize their life goals, such as saving for college for kids and grandkids, personal retirement, and company retirement plans for their workforce and owners. It’s very rewarding to partner with my clients and see the positive effects a solid investment strategy and financial management plan can have on their lives. 

Want to Know More? 

Working with a financial advisor is one of the most important decisions you can make. At YH&C Investments, we understand the importance of finding someone you can trust to manage your assets. That’s why we work hard to make sure our clients understand their plans and are satisfied with our service and communication. 

To see if you might be a good fit to work with Y H & C Investments, reach out to us at information@y-hc.com or schedule a meeting here. We look forward to meeting with you!

About Yale

Yale Bock is the owner and operator of Y H & C Investments, a registered investment advisor (Nevada and California licensed) located in Las Vegas, Nevada. Yale directs all operations, from investment research and portfolio management and asset allocation to trading decisions, trade execution, risk management, and client communication. With experience investing capital personally and on behalf of his clients for 20 years, he aims to maximize investors’ assets—and do so as tax efficiently as possible. Yale has a passion for investing and enjoys the challenge of the markets, and has a proven track record of reliability and good judgment. He thrives on partnering to help people reach their life goals through investing: saving for kids’ and grandkids’ college, personal retirement, and company retirement plans (just to name a few). His clients can experience comfort and confidence that they have someone in their corner they can depend on to help them succeed in a responsible and tax-efficient way.

Yale earned a bachelor’s degree in economics and an MBA from UC Irvine and holds the Chartered Financial Analyst designation. He is married to Jhanine Ilana Aronson and together they have a precious teenage daughter, Diamond Emerald Bock. Outside of work, he enjoys sports (baseball, football, basketball), politics, and reading. To learn more about Yale, connect with him on LinkedIn.

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