Investing in Uncertain Times

In light of recent stock market events, I wanted to make a statement about the EarlyBird philosophy.

EarlyBird believes in building generational wealth. We believe it is okay to “get rich slowly” and if we all start investing in our children at the earliest age, they will grow up with a solid financial foundation that they can continue building upon.

EarlyBird believes in providing new and experienced investors with the tools, knowledge and autonomy to take their finances into their own hands. We feel that freedom should never be taken away from anyone or interfered with by outside influences. We pledge to be a pillar of support and to not perpetuate a broken system.

EarlyBird believes in the power of an individual’s narrative and sharing knowledge through storytelling. With the events that transpired over the last week, we think it’s important to find ways to share our stories and make sure that they are passed down to our kids so they can learn from both our successes and our failures.

We understand that investing in your child’s future requires time, commitment, and dedication, so we hope to simplify this process by sharing some insights to help our community build wealth in a calculated and thoughtful manner.

A key first step in any investment journey is to consider your “investor profile” and to design a “plan/thesis” around how you want to invest over the next 5–10+ years (if that is for yourself or your child).

You can build this profile by asking three key questions:

• What is my honest investing experience?

How knowledgeable am I about the stock market and how it works truly works?

• What is my risk tolerance around money?

How would I respond if the market dropped 20% and I saw substantial losses in my investments?

• What is my time horizon?

When do I plan to actually need this money?

With this information, you can design a portfolio that fits your needs and provides a solid foundation for your investments. The portfolios we offer are made up of exchange-traded funds (ETF’s), which are a bundle of investments that trade similarly to stocks. ETF’s allow you to diversify your portfolio. Depending on the type, ETF’s have varying levels of risk and allow you to invest in sectors/industries rather than in a single stock, which helps you to mitigate your overall risk/exposure.

Another critical concept that EarlyBird believes in is “dollar-cost averaging,” which emphasizes the importance of investing consistently over a period of time. Many people struggle with the question, “when do I start?” The best answer is, now. As you can see in the chart below, people who wait for a “dip” in the market always lose out.

“Over time the difference between the BEST investor (bought at every market bottom) and the WORST (bought at every fresh market peak) is only 1–2%! Better to get invested in the right asset allocation and stay invested during good times and bad. Planning and education and patience.” — Evan List — EarlyBird Advisor — Vice President — Financial Advisor at Alliance Bernstein

Another common narrative we typically hear is, “I don’t have enough money to begin.” The truth is, investing small amounts every month can have a massive impact on your overall returns. Let’s quickly use an example to highlight what I mean:

If you had invested $50/month starting in Jan. 2010 in the S&P 500 (an index of the 500 largest companies in the US), you would have seen an 11.63% rate of compounding interest on your funds which ultimately would equal $13,725 today.

Becoming a savvy investor takes time and investment decisions are often based on the advice we receive from our parents, family, and community and the lessons they pass on. I hope that the EarlyBird community will take some time to share the experiences they have learned this week through their own narratives and storytelling with the children in their lives, teaching them the fundamentals of investing and the power of the stock market. By fostering financial literacy at a young age, EarlyBird promises that together, we can build a better financial future for the next generation.

Best,

Jordan Wexler

CEO of EarlyBird

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Get access to free investing content to help create a better future for the kids you love at our EarlyBird Blog: The Worm. Another great newsletter for families is Benjamin Talks.

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