Patience in Bear Markets & Coinbase Meets Blackrock

Nate Crosby |
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Invest like a pro 

Would you say you have self-control? We recently found an old study from Stanford University where they took 600 four-year old’s and put each one in their own room with nothing in it but an Oreo cookie. If they could avoid eating the Oreo for 15-minutes, they would then be given two cookies as a reward. You can guess how the results were oriented. Turns out it’s really challenging not to eat that cookie. The interesting piece, however, is they tracked the kids years later and found that children who were able to resist the temptation scored higher on ACT / SAT tests, had lower BMI, and were less likely to take drugs. Why are we telling you this? Well, we find interesting parallels with investing in that your ability to delay gratification largely leads to rewards down the road. For example, the market performed well this last month. However, if you panicked in June, you didn’t get to feel the benefits of July. 
When it comes to investing (and many things in life) the key is to keep an open mind and not to get too bogged down in one idea. You may also want to reframe the way you see things. Diversifying isn’t giving up on something, it’s giving an account the ability to grow. 

The latest inflation numbers 

While this month is looking pretty (month over month we are at 0%), consider the year over year of 8.5% or how about going back 24 months. Inflation was at 5% last July and was at 8.5% this July – that’s a lot of compounding inflation at a high rate of change. 
The upside is with strong jobs data and many corporate earnings meeting or exceeding their estimates, the market has rallied in hopes that a “soft landing” seems more probable than it did just a few months ago.  Dare we say, good news is good news again? Back to that whole don’t get bogged down in one idea thing, perhaps the economy is stronger than many may have thought – jobs are up, and company earnings are solid. 

Remember, the market is a lot like a roller coaster – it’s fast going down and it’s slow getting back to the top. Think of that individual click noise as the Magnum (Cedar Point amusement park reference – go there, it’s awesome!) makes its way up that first hill – it feels like you’ll never make it to the top then all the sudden the ride is over. Beware! Investors can sometimes make snap decisions when prices are moving down and fast but remember that Oreo cookie and how your ability to think rationally is truly an act of self-control. 

BlackRock and Coinbase join forces 

We recently saw these two companies come together as partners. The goal is to offer Bitcoin exposure to institutional clients / investors. We see this as good long-term news for Bitcoin as an asset but when it comes to the whole decentralized currency story, it’s not ideal for progressing the technology.