Once again, tax simplification and cuts are being debated. There is general agreement that the tax code needs to be simplified, but there are a lot of differing opinions and perceptions about how to do this. Moreover, the impact of tax policy is counter intuitive. This is further complicated by political considerations and comments by the media, politicians and so-called experts.

To get past the politics and perception, we need to look at the facts.

Lowering top marginal tax rates to increase tax revenue is counter intuitive and portrayed as a break for the wealthy. One would think that if you have higher taxes, you have higher revenues, yet this is not always the case. Certainly there is a point at which lowering marginal rates too much causes revenues to dip. However, there can be no disagreement about how lowering personal marginal rates in the past has increased revenue and GDP.

There is bipartisan agreement that the corporate tax rate is too high. The sticking point with cutting the corporate rate is disagreement on what else this may be tied to and what to do with funds that have already been earned but are offshore.

The other factor that is being debated, primarily along political lines, is that lower tax rates can increase the growth of the economy, and  therefore the government actually takes in more dollars. This has been shown to be the case, so the only reason that some want to debate this is political.  Essentially as tax rates go down the government is getting a smaller piece of of a larger pie. Just the prospect of lower taxes has helped GDP growth increase since the election in 2016.

Just over a year ago, on September 25^th, 2016, Donald Trump spoke at the Economic Club of New York. He joined the ranks of John F. Kennedy and Ronald Reagan in espousing a plan of reducing marginal tax rates for both individuals and corporations.

JFK’s Tax Cuts Increased GDP in the 1960s

On December 14, 1962, then-President John F. Kennedy unveiled a tax-cut plan to revive the long-stagnant U.S. economy in a speech at the same Economic Club. President Kennedy proposed lowering marginal tax rates for all taxpayers and reducing the corporate tax. He advised lowering the top tax rate from 91 to 65 percent and closing tax loopholes. He understood the counter intuitive nature of this plan, stating, “In short, it is a paradoxical truth that tax rates are too high today and tax revenues too low, and the soundest way to raise revenues in the long run is to cut rates now.” Then, as now, critics (and the uninformed) contended that lower tax rates would result in lower tax revenue. Then, as now, they were wrong.

In 1962, corporate rates were dropped. In 1964, Kennedy’s broader tax cuts were passed into law, after his assassination. In 1965, GDP grew by 10.7 percent and in 1966 by 7.99 percent.[1]

Reagan’s Tax Cuts Grew the Economy in the 1980s

By the late 1970s and early 1980s, we were once again faced with high unemployment and, paradoxically, also high inflation—so-called “stagflation.” Ronald Reagan acknowledged many times that he was following in Kennedy’s footsteps in proposing, and ultimately cutting, personal tax rates from 70 percent to 28 percent. He also cut corporate taxes and closed numerous loopholes. Once again, the American economy grew, unemployment went down and the broader equity markets moved up. Critics had claimed these cuts would be a break for the wealthy (as today’s critics also claim) and that they would reduce tax revenue. Once again, they were wrong.

According to U.S. Treasury statistics, The Tax Equity and Fiscal Responsibility Act of 1982, also known as TEFRA, increased revenues by $130 billion in its first four years. The bulk of these revenue increases came from the wealthiest Americans. In 1981, when the top marginal rate was 70 percent, the top 10 percent of income earners paid 48 percent of all income tax, and the bottom 50 percent paid 7.5 percent of all tax (source: Joint Economic Committee for the US Congress report, 1996).

President Trump’s Tax-Cut Plan Should Benefit the Economy

Currently the top 1 percent of income earners in the United States are paying 49 percent of all taxes, and the top 10 percent of earners are paying 82 percent of all income tax.[2] There is a limit to how much more the government can tax the top 1 percent to 10 percent of earners. The tax system is already unduly progressive, and there is only so much the government can take without hindering growth further. Increasing taxes thwarts economic growth and entrepreneurial spirit, whereas reducing taxes can accelerate growth and ironically shift the tax burden from low- and middle-class earners to higher-income people. Donald Trump set a goal of 4 percent economic growth, which would double the rate of growth over the past 15 years. Critics called the growth goal unrealistic and the plan a break for the wealthy. We have seen that a 4 percent growth rate is not only possible; when looking at the impact of previous cuts, we believe this figure may be very conservative, especially when combined with decreased regulation, which stimulates economic growth. Because a number of so-called loopholes are closed in all plans being proposed, lower- and middle-income tax payers would likely  see a reduction in taxes, while the bulk of the taxes are paid by the top 1 percent to 10 percent of income earners. The ultimate goal is to help all Americans, especially those who have lower incomes. The centerpiece of the Trump plan is a reduction in business tax rates for large and small firms, to 15 percent from the current uncompetitive 35 to 40 percent. He offered a 10 percent repatriation rate to incentivize American firms overseas to bring $2.5 trillion home. While we believe the actual rate will be somewhat higher, we believe that the corporate rate will be reduced and that this will greatly benefit the economy and country. An article in the National Review indicates similar optimism in Trump’s plan. The article states, “While such large cuts would lead to an immediate revenue shortfall, the difference could be at least partially made up by eliminating damaging deductions and exemptions in other parts of the federal tax code. A corporate rate cut could also be expected to broaden the tax base, further offsetting its own costs by spurring more investment, the repatriation of profits, the relocation of business headquarters… Cutting the corporate-tax rate in itself will increase GDP, and evidence suggests it will lead to higher wages for workers, too.”[3] Once we move beyond politics and perception and look at the facts, it is clear that cutting taxes helps the country, especially lower- and middle-income Americans. Regardless of which plan you believe in, there is no question that the top 10 percent of income earners are paying more income tax than ever before, both in terms of dollars and total percentage of taxes being paid. Finally, generating revenue is only half of the issue. The other part is what the government spends. Less than 15 percent of the government budget is for discretionary spending, and more than 65 percent is for entitlements such as Medicare, Medicaid, Social Security, welfare, etc. At some point, the government is going to have to look at these items and make some tough decisions.  But that’s another discussion.

Join Us for a Tax Legislation Review at Breakfast on January 13th, 2018 

We will be reviewing actual tax legislation at our 22^nd Annual Resource Breakfast on Saturday, January 13^th, 2018. You are welcome to join us, without cost or obligation, to hear about the new tax rules and a number of other timely topics such as cybersecurity.  To RSVP just give our office a call (440) 974-0808 or click here.

We Are Here to Help You on Your Financial Journey

Our role at Carver Financial Services Inc. is to help you prepare for whatever may transpire with taxes, the economy, benefits or otherwise. We are here to help you achieve your personal vision for the future and your life, whatever that may be. Change is always difficult and is often politicized. This can present an opportunity for those who are informed and prepared.

We are always happy to meet with you to discuss your vison and wealth planning — without cost or obligation. Each person’s needs and objectives are unique; therefore, your planning should be as well.   This is a dynamic process as regulations, the economy and your needs change.

We appreciate the opportunity to be your partner on this interesting journey. Please contact us whenever we may be of service at Randy.carver@raymondjames.com or (440) 974-0808.

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The information contained in this blog does not purport to be a complete description of the securities, markets, tax rules or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Randy Carver and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk, and you may incur a profit or loss regardless of strategy selected. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

[1]. “U.S. GDP Growth Rate by Year,” http://www.multpl.com/us-gdp-growth-rate/table/by-year.

[2]. “Fairness and Tax Policy,” Joint Committee on Taxation, March 2015, file:///C:/Users/Libbye/Downloads/x-48-15%20(2).pdf.

[3]. Ryan Bourne, “Evidence Suggests That Lower Corporate-Tax Rates Increase GDP and Boost Worker Wages,” National Review, September 27, 2017, http://www.nationalreview.com/article/451811/corporate-tax-cuts-benefit-ordinary-workers.

The vision of Carver Financial Services Inc. has always been making people’s lives better. A big part of this vision is protecting and enhancing your lifestyle. We cannot always be prepared for the unforeseen, but we can take steps to protect the quality of our lives and our future when disaster strikes. We never know when we could be impacted by a natural disaster, a financial crisis or a man-made issue. This month we experienced two major hurricanes and a huge hack of personal data.

You could face a local problem, such as being stuck in your car in a snowstorm, or you could be affected by something as widespread as a weather event like Hurricanes Harvey or Irma. All kinds of natural, and financial, disasters can occur. The key is to be prepared for whatever may happen.

As always, please contact us with questions, and let us know if we can be of service in any other way.

Here are 10 tips for getting yourself and your family prepared for various types of disasters.

Ensure Your Personal Comfort and Safety

• If there is a warning of a hurricane, tornado, earthquake or other natural disasters, get your cars, pets and personal property out of the expected path well ahead of the storm.

• Keep a three- to five-day supply of water in your home. A gallon of fresh water per family member per day is a rule of thumb. Keep nonperishable food in your home. If there is a power outage, your refrigerator won’t work unless you have a generator at home. Nuts, dried fruit, energy bars and canned goods are good choices. Make sure you have a manual can opener!

• If you live in an area where there are power outages or where the loss of power (such as a very cold climate) can be dangerous, consider buying a whole-house generator.

• Keep a small amount of cash at home, not a large sum, but enough for a couple of days in case credit cards and ATMs are not working because of a power outage.

• Buy a spare power source for your cell phone and/or a hand-crank light charger.

• Buy a manually powered or battery-operated radio so you can listen to developments in your area concerning evacuations.

• Tools to use in case you need to turn off utilities, such as pliers or a wrench.

• Sanitary wipes and trash bags with ties. If you lose all your utilities, you need to handle your family’s bathroom needs in a sanitary way so no one gets sick.

• Put together a survival kit that includes first-aid supplies, dust masks, a flashlight with extra batteries and heat-reflective blankets.

• Utilize a credit monitoring service to alert you to potential identity theft and credit issues.

Protect Your Stuff

Robert Hunter, director of insurance at the Consumer Federation of America, estimates that only 2 in 10 homeowners whose homes were damaged by Hurricane Harvey have flood insurance coverage. Those who now have flooded basements, soaked furniture, water-damaged walls, and collapsed roofs will have significant out-of-pocket expenses.[1]

Don’t let this happen to you! If you haven’t done so already, do a full insurance review and make sure you have proper insurance coverage for your home, jewelry, and other valuables so you can be reimbursed in case of theft or a natural disaster. Also get flood and/or earthquake insurance if you live in areas that experience these types of disasters.

Work closely with your insurance agent or financial advisor to make sure your insurance coverage fits your needs. Many people make costly assumptions. For example, you cannot assume that a standard policy will protect you if your house develops mold or sewage-backup problems. Many homeowners’ policies do not cover this type of damage. Another costly assumption is that if you live outside California, you don’t need earthquake coverage. The truth is that Alaska, Hawaii, Nevada, and Washington all have more earthquakes than California.[2]

We recommend that you take a video of your home and all the furniture and other items in it. This can be very helpful in remembering what you had and in documenting the contents of your home for insurance purposes in the event of a complete loss. Upload this list to cloud-based storage.

Equip Your Vehicle

Even if there is not a widespread disaster, you could be stranded in your car. If you live in a very cold climate, keep a blanket, some water, and a jump-start kit in your car.

Here are some items you will need if you get stranded in your car: a spare tire in good condition, a tire inflator and sealer, jumper cables, a tire-pressure gauge, your car’s operating manual, duct tape, WD-40, a first-aid kit, a flashlight with good batteries, a multi-tool, matches, a candle in a can for winter emergencies, energy bars, bottled water, a weather radio, a seat-belt cutter and window breaker, flares or a reflective triangle, printed maps, an ice scraper, a Mylar space blanket and a carpet remnant you can put under your tires to gain traction in the snow.[3]

Protect Your Identity and Personal Information

In early September, credit-monitoring service Equifax announced that 143 million Americans’ personal information had been compromised five weeks earlier. This massive data breach of consumers’ personal information is one of the worst data breaches in history.  One way to protect yourself after this latest breach is to place a credit freeze on your security file with Equifax at https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp and also with the other credit bureaus’ Transunion and Experion. While a deterrent, credit freezes do not prevent thieves from gaining access to existing accounts.

We strongly recommend that you use a credit-monitoring service such as Lifelock or Identity Guard. You can see a list of such services at:

http://www.nextadvisor.com/credit_report_monitoring/compare.php

In addition, to make it more difficult for criminals to hack into your accounts, we recommend using two-factor authentication (2FA) where available. This adds a second level of authentication to an account login. Raymond James Investor access offers this service, as do widely used companies such as Google, Apple, and Microsoft. When you enter only your username and one password, that is considered single-factor authentication. In contrast, 2FA requires you to use two out of three types of credentials before you can access an account. This can include the following:

• Something you know, such as a personal identification number (PIN), password or a pattern

• Something you have, such as an ATM card, phone or vehicle key fob

• Something you are, such as a biometric like a fingerprint or voice print

• Something that is texted to your phone

According to the website SecurityIntelligence, public adoption of 2FA has been slow. For example, a Dropbox official recently reported that less than 1 percent of the company’s customers had taken advantage of its 2FA option. Online services are often reluctant to introduce any inconvenience into the login process. But attitudes are beginning to change because of recent, well-publicized thefts of large password files.[4]

Please note that two-factor authentication is not the same as two-form authentication. The latter technique uses a second login gate, such as a challenge question, to validate a user’s identity. It is the least effective form of two-factor security, although it’s better than nothing.

Prevent a Financial Crisis

Finally, let’s talk about how to protect yourself from a future financial crisis.

Markets can and do fluctuate sometimes to extremes. It is important to have enough cash and cash equivalents on hand for near-term needs while having a portfolio that is allocated in a way that meets both your long-term goals and your risk tolerance.

We are not referring to cash in the home but rather in a money market or bank account. In this regard, we recommend a six-month reserve plus any funds you anticipate taking out for larger purchases. Your portfolio should be proactively reviewed and updated with an eye to the future, rather than the past. Your planning should take a holistic approach that looks at your tax status, estate planning goals, insurance, and income needs now and in the future. As we are often told, past performance does not guarantee future results.

Moreover, it is not how much you make that is important, but how much you keep after taxes, fees, and expenses. We are always focused on your net return and meeting your needs, not on beating a random index.

We are happy to discuss your personal vision and review your portfolio to make sure it aligns with your goals and objectives. We also have a very powerful planning tool that will analyze the probability that your current portfolio will achieve your stated goals, and more importantly, provide a guide for making adjustments.

There is neither a cost nor any obligation for us to review your situation. Please contact us at (440) 974-0808 or me at randy.carver@raymondjames.com.

[1]. Bernard Condon and Ken Sweet, USA Today, “About 80% of Hurricane Harvey Victims Do Not Have Flood Insurance, Face Big Bills,” August 29, 2017, https://www.usatoday.com/story/money/2017/08/29/hurricane-harvey-houston-flood-insurance-damages-claims/611910001/.

[2]. Bryan Ochalla, “16 Common Homeowners’ Insurance Mistakes,” June 4, 2017. QuoteWizard, https://quotewizard.com/home-insurance/homeowners-insurance-mistakes.

[3]. Melanie Pinola, “30 Essential Things You Should Keep in Your Car,” Lifehacker, September 6, 2013, http://lifehacker.com/30-essential-things-you-should-keep-in-your-car-1263514115.

[4]. Paul Gillin, “Two-Factor Authentication: A Little Goes a Long Way,” SecurityIntelligence, January 30, 2017, https://securityintelligence.com/two-factor-authentication-a-little-goes-a-long-way/.

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Randy Carver and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.  Investing involves risk and you may incur a profit or loss regardless of strategy selected. Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members.

We’ve learned from Hurricane Harvey and other devastating storms that when the authorities tell you to evacuate, it’s best to get out of town, where there is no threat of catastrophe. But this is not the strategy we need to use for stock-market storms.

Human nature sometimes works against us when it comes to putting money in an investment and keeping it there for a while. When many investors watch the news and see that the market is fluctuating, their first instinct can be to panic and move that money out of the stock market and into a different class of investment. But your best bet is to leave it right where it is.

Stocks Grew Even During the 2007 Economic Crisis

Case in point: stocks invested 10 years ago, during one of the worst stock market performances in history, have done better than you might expect. In August 2007, when the global financial crisis began to erupt with the halting of withdrawals from some BNP Paribas funds, it launched an 18-month period of wealth destruction and economic peril.

Many investors bailed out of the stock market. But those who held tight for the next few scary years made out pretty well. In the 10 years since that crisis began, the Standard & Poor’s 500 index has returned 7.8 percent, annualized, including dividends. That’s not far below the very long-term average yearly return of just under 10 percent.[1] In fact, investments left in the stock market during that time did better than some other investments:

	10-year total return	Maximum pullback
S&P 500	+7.8%/year	–47%
Aggregate Bond Index	+4.3%/year	–9.8%

Source: FactSet

In this market downturn, investors were helped by “the most aggressive central bank support programs ever conceived, a long corporate profits boom and one of the longest bull markets in history, which has taken equity valuations to the upper end of their historical range.”[2]

From the Calm to the Storm

In the summer of 2007, there was a decent bull market following the tech meltdown of 2000–02. Stocks had been rising nicely for five years, gaining about 12 percent a year with dividends. And the market was reasonably valued, at 15 times forecast earnings for the following year ¾ a similar multiple as a few years earlier and comfortably below the current 17.8 times. Investment gurus often noted the lack of retail-investor participation as a reason that stocks had plenty of room to run higher. On August 9, 2007, the BNP fund closures sparked a swift stock sell-off.

Here is a summary of what happened next. You can see what great restraint it took for the wise investors to keep from bailing out of stocks:

• In December 2007, two months after the market crested, Wall Street strategists still predicted a 10 percent gain for the S&P 500 for 2008. They were wrong!

• The financial strain spread from subprime mortgages, to the entire credit market and then to the real economy. Stocks were liquidated, losing 20 percent from their peak and earning bear market status by mid-September 2008.

• On September 15, 2008, Lehman Brothers filed for bankruptcy. With $639 billion in assets and $619 billion in debt, Lehman’s bankruptcy filing was the largest in history.[3] The result was unprecedented tumult of the financial system and an all-out liquidation of stocks.

• Stocks bottomed out in March 2009 with the Dow just under 7,000 after a number of erratic rallies. The investor who got into stocks on Aug. 9, 2007, was down 47 percent, and the conservative Vanguard Balanced fund was off 26 percent, in just 17 months.

• At many points up through 2010, the trailing 10-year return on U.S. stocks was negative, making many investors question whether the market would ever be a wise investment again.

• In 2011, the European debt crisis and debt-ceiling standoff, combined with a variety of recession scares and reports of anxiety from the Fed, prolonged investors’ worries.[4]

Yet after all that, a standard portfolio allocated with 60% equity and 40% fixed income returned a decent 6.8 percent over the same span, with roughly half the downside volatility experienced by the S&P 500.

Be Patient!

What can we learn from this? The clear message is to be patient and not let emotional reactions to market fluctuations dictate your moves. The passage of time in the markets can help make up for bad timing. So when your “fight or flight” instinct kicks in, choose “fight” ¾ fight the inclination to flee the market!  A trusted advisor can help navigate this.

We take a proactive approach to managing income and cash so that you should not have to liquidate then we experience corrections.  Please contact us with any questions on your portfolio or if we can otherwise be of service.

Randy Carver (440) 974-0808  or randy.carver@raymondjames.com

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Randy Carver and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.  There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Past performance is not a guarantee of future results.  Investing involves risk and you may incur a profit or loss regardless of strategy selected.

[1]. Michael Santoli, “Investors Posted Solid Returns Even if They Bought Just as Financial Crisis Erupted 10 Years Ago,” CNBC, August 9, 2017, https://www.cnbc.com/2017/08/09/even-if-you-bought-just-as-the-global-financial-crisis-erupted-10-years-ago.html.

[2]. Ibid.

[3] “Case Study: The Collapse of Lehman Brothers,” Investopedia, February 16, 2017, http://www.investopedia.com/articles/economics/09/lehman-brothers-collapse.asp.

[4]. Santoli, “Investors Posted Solid Returns….” CNBC.

Are successful people happy because they are successful or because they are happy? Science and personal experience suggest the latter. The idea that if we just make more money, do more things or land a new position at work will make us happy is misleading at best. At worst, it leads to disappointment. The idea that we control how happy we are — regardless of circumstances — and ultimately control our own success may be hard to believe, but it is true.

Study the Exceptional to Be Exceptional

Averages are the benchmarks scientists analyze for most things. The measure of happiness, although tough to define, is no exception. But if we study what is merely average, we will remain merely average. If we want to be exceptional, we need to study the exceptional. This is true with our health, happiness and financial well-being. The good news is that success leaves clues.

Shawn Achor is the author of the best-selling book The Happiness Advantage. He spent 12 years researching happiness at Harvard University. Mr. Achor postulates that when we stop studying the average and begin researching positive outliers —- people who are above average for a positive dimension like optimism or intelligence — a wildly different picture emerges. Our daily decisions and habits have a huge impact on our levels of happiness and success. More importantly, we can use specific exercises to increase our level of happiness and thereby our success (however we define it).

So again, are successful people happy because they are successful or because they are happy? There are many unhappy people who society deems successful. Take students at Harvard who have the opportunity to attend one of the greatest learning institutions and who are generally very smart folks. Many of them feel that they are not successful if they are not in the top 1 percent of their class — 99 percent of them will potentially be disappointed.

Change Requires Desire, Decisions and Doing

The first thing we must do is change our behavior to see the positive. If I want something I’ve never had, I must do something I’ve never done. The truth is…change involves desire, decisions and doing. A change of mind results in a change of heart, which results in a change of action, which results in a change of feelings. All of that can be a little scary…doing something you’ve never done. So heed the advice of educator L. Thomas Holdcroft: “The past is a guidepost, not a hitching post.”

On the other hand, things I do not take action on are probably not going to change. You may whine and complain about your weight, your spouse, your kids, your job, your team or letting your phone and email ruin your life. But as much as I hate to say this, you have no right to complain about any of those things if you don’t do something about them and just keep on permitting them to happen.

Mind-Wandering Makes Us Unhappy

Worry is negative goal setting — thinking about everything that has or can go wrong. To worry about what you can’t change is useless. And to worry about you can change is a waste of time. Either change it or forget it. Self-improvement guru Dale Carnegie said, “If you can’t sleep, then get up and do something instead of lying there and worrying. It’s the worry that gets you, not the loss of sleep.”

Even when we are awake, a recent study showed that people spend 46.9 percent of their waking hours thinking about something other than what they’re doing, and this mind-wandering typically makes them unhappy. So says a study that used an iPhone web app to gather 250,000 data points on subjects’ thoughts, feelings and actions as they went about their lives.

The researchers, psychologists Matthew A. Killingsworth and Daniel T. Gilbert of Harvard University, concluded, “A human mind is a wandering mind, and a wandering mind is an unhappy mind. The ability to think about what is not happening is a cognitive achievement that comes at an emotional cost.”

Positive psychology is “the scientific study of optimal human functioning.” It was first introduced as a field of study by Dr. Martin Seligman in 1998, when he was president of the American Psychological Association.

Traditionally, psychology has concerned itself with what ails the human mind — such as anxiety, depression, neuroses, obsessions, paranoia and delusions. But Dr. Seligman and other pioneers in positive psychology asked the following question: “What are the enabling conditions that make human beings flourish?”

You Can Learn to Be Happier—Start Today!

Here is more good news: positive psychology shows that you can learn to be happier just as you can learn a foreign language or become proficient in a sport. This rapidly growing field is shedding light on what makes us happy, the pursuit of happiness and how we can lead more fulfilling, satisfying lives.

We recommend reading the books below, which go into more detail about things you can do to improve your happiness. And to get started on your quest for happiness right away, here are a few exercises to consider:

• Ask yourself questions to foster awareness about what actions and attitudes will make you happier.

• Keep a happiness journal. Each day, write down three things you are grateful for. This will help you look for things in your life that make you happy.

• Every day, send a personal note to someone who has positively impacted your life.

• Imagine yourself as 110 years old. Write down the advice you would give your younger self. This added perspective will allow you to recognize and eliminate trivial and negative things from your life.

• Follow the suggestion Dr. Tal Ben-Shahar makes in his book Happier: create rituals or daily habits. He says, “The most creative individuals — whether artists, businesspeople or parents — have rituals that they follow. Paradoxically, the routine frees them up to be creative and spontaneous.”

• Simplify. Identify what’s most important to you, and focus on that; stop trying to do too much. People who take on too much experience time poverty, which inhibits their ability to derive happiness from any of the activities they participate in.

• Keep in mind that happiness is mostly dependent on your state of mind. Barring extreme circumstances, our level of well-being is determined by what we choose to focus on and by our interpretation of external events.

We definitely want to be content and appreciative of our current situations, but we should also continue to grow. As content as you are, you can be happier each day. Happiness is a journey, not a destination, and we need to balance having what we want with wanting what we have. Please contact me, or our team, whenever we can help make your life better. Randy Carver – randy.carver@raymondjames.com  or (440) 974-0808.

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Books to read on the subject:

• Shawn Achor, The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work

• Dr. Tal Ben-Shahar, Happier: Learn the Secrets to Daily Joy and Lasting Fulfillment

Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. The information herein has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.   Links are being provided for information purposes only. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s user and/or members.

Why are you investing? Is it to beat an index or achieve a personal goal? Is it to select the newest investment or achieve a dream? Most of us are investing to achieve a personal goal or fulfill a need such as having retirement income, funding education funding, going on a vacation or remodeling a home.

While many firms focus on selling the latest investment or trying to beat a benchmark, we focus on you and achieving your vision. Rather than taking an investment-centric approach that looks at the portfolio and tries to determine how your life can be, we want to understand what your personal vision is for the future and then develop a holistic plan to achieve it. The investments themselves are simply a means to an end. We call this Personal Vision Planning®.

Focus on Your Vision, Not on Market Performance

The most important benchmark is whether you can maintain and enhance your standard of living, not some market index. Performance should focus on your needs, wants and vision — not a random number or value. Markets will go up and down, but don’t focus on that — focus on your personal vision.

As broader markets have set new record highs, many investors are comparing the performance of their portfolios against various market indexes. In most cases, people’s portfolios do not contain the same investments as the index they are comparing themselves to, so the comparison is irrelevant.

Asset Allocation Is More Important than Selection

Asset allocation is the practice of mixing non-correlating assets together to find an optimal balance of risk and return based on your investment profile. The idea is to minimize your portfolio risk while maximizing your returns.

Asset selection, or securities selection, is the practice of building your portfolio with a variety of investments that align with your asset-allocation strategy.

According to an industry consultant with 30 years of experience in the financial services industry, “While both asset allocation and selecting appropriate securities is important to an investment strategy, it is more important to target the right asset allocation” (Investopedia, September 3, 2016). Studies have shown that asset allocation can account for more than 90% of your return (CFA, Randolph Hood, and Gilbert L. Beebower (known collectively as BHB), “Determinants of Portfolio Performance,” published in the Financial Analysts Journal).

We agree that asset allocation is the most important factor in determining your investment success — not investment selection. We have a rigorous process for screening, selecting and monitoring investments. This is the science. Developing an allocation and broad plan based on your personal goals, vision and needs is the art.

Leave Emotions Out of Financial Decisions

Regardless of what transpires, we are here for you. Chasing past performance or making decisions based on emotions has led to significantly reduced returns for many people. This is why the average equity mutual fund investor underperforms the average fund by about 40 percent over 20- year periods (Nick Murray Interactive, April 2017).

For more information about our process and team, visit www.carverfinancialervices.com, or feel free to contact me personally at randy.carver@raymondjames.com.

Any opinions are those of Randy Carver and not necessarily those of RJFS or Raymond James. The information herein has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Diversification and asset allocation do not ensure a profit or protection against a loss. Keep in mind that there is no assurance that any strategy will ultimately be successful or profitable nor protect against a loss. Links are being provided for information purposes only. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s user and/or members.