No Fear.

Fear and worry are paralyzing.   When I jump in the ocean I fully expect to get eaten by a shark especially if I go swimming during the Discovery Channel’s Shark Week.   When I go hiking in the mountains I know I’ll have to fight off a sloth of bears.  In Texas, every stick is a rattle snake.    Of course, my fears are unfounded.  I’ve not been eaten by a shark, fought with a bear, or stepped on a rattle snake.   Fear of the unknown will keep us from enjoying life and experiencing our big blue planet.

A person has a 1 in 3,700,000 chance of being killed by a Shark.  The odds of dying from the flu are 1 in 63.[1]   Sharks, alligators and bears each kill about one person per year according to a 2015 Washington Post article.   Venomous snakes and lizards kill around six people annually.   Approximately 48 people are killed by a cow or dog each year.[2]

A Bible search for the words “fear” and “worry” produced 351 results.[3]  Most verses with fear and worry are preceded by do not as in do not fear or do not worry.

So do not fear, for I am with you; do not be dismayed, for I am your God. I will strengthen you and help you; I will uphold you with my righteous right hand. ~ Isaiah 41:10

Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own. ~ Matthew 6:34

Investors appear to live in a constant state of fear and worry.  Here are a few views on how to overcome some common investment fears.

  1. Fear of a stock market correction. Diversify your assets to limit your exposure to a stock market correction.   Investing in bonds, small companies, real estate, gold, and international investments will cushion the blow from a stock market correction.   These additional asset classes reduced your losses by 44% during the 2008 stock market correction.[4]
  2. Fear of running out of money. Longevity risk is a concern.   To avoid this risk, invest in stocks.  The stock market has produced a 10% average annual return since 1926 while the bond market generated a return of 5.6%.  $1 invested in stocks is now worth $5,386.  $1 invested in bonds is worth $132.   Stocks outperformed bonds by a ratio of 40 to 1![5]
  3. Fear of rising interest rates. Rising interest rates will lower bond prices.   Invest in a bond ladder to protect yourself from falling bond prices.  A portfolio of bonds maturing every year will allow you to invest in both short term and long term bonds.  When a short-term bond matures invest the proceeds in a new bond with a higher interest rate.
  4. Fear of missing out. FOMO is real!  Don’t chase returns on a high-flying stock.   If you want to buy a stock after it has appreciated significantly, wait for it to pull back before committing capital.

Do not let fear keep you from achieving your financial dreams.  Plan for your future and good things will happen.

The only thing we have to fear is fear itself. ~ FDR

Bill Parrott is the President and CEO of Parrott Wealth Management.   For more information on financial planning or investment management, please visit

Note:  Your returns may be more or less than those posted in this blog.

April 28, 2017


[1], website accessed 4/27/17.

[2], Christopher Ingraham, June 16, 2015.  Website accessed 4/27/17.

[3], website accessed 4/27/17.

[4] Morningstar Office Hypothetical Tool.

[5] 2016 Dimensional Funds Matrix Book.

Fearless Girl.

The Fearless Girl statue is taking on Wall Street.  The statue was commissioned by State Street Global Advisors to promote gender diversity on Wall Street.[1]  The Fearless Girl was placed in front of the famous Charging Bull statue in what appears to be a powerful standoff.   My bet is with the girl!

The Fearless Girl is standing in the power pose position made famous by Amy Cuddy’s TED Talk. [2]  Her TED Talk has been viewed over 40 million times.  In addition to her talk, she has authored Presence: Bringing Your Boldest Self to Your Biggest Challenges.  Her book is a New York Times best seller.  You should give the power pose a try, it will give you a confidence boost!  Wonder Woman is a fan of the power pose.

My daughter is a fearless girl.  In elementary school, she started riding horses.   She’d hop on a thoroughbred and ride around the ring and across open fields with a reckless abandon.   She showed no fear when she was on the back of a horse.  It didn’t matter if she was jumping over cross rails or making sharp turns around a barrel she rode without fear.

Women are fearless investors as well.   According to a study by Fidelity, women outperformed men over the past decade.[3]  Women tend to rely more on their plan while employing a buy and hold strategy.  In a study by Terrance Odean, professor at Berkeley’s Haas School of Business, men traded 45% more than women during the 1990s and he blamed it on overconfidence.[4]    Trading, combined with a big ego, can destroy your investment results.

Men try to fix everything with a hammer and a screw driver while women will use all the tools in the tool box.  Women are more likely to follow the blue print and ask for help when needed.   As you construct your investment portfolio, use all the tools available so you can achieve financial success.

How can you invest like a fearless girl?

  1. Start with a plan.  Successful women investors start with a plan and, more importantly, stay with it through good times and bad.
  2. Buy and hold. Market timing and excess trading will get you nowhere fast.  A buy and hold strategy will deliver solid long term results.
  3. Reduce risk. In the Fidelity study on women outperforming men, they also did it with less risk.  Adding bonds to your stock account can reduce the risk in your portfolio.
  4. Get help. If you’re lost on the financial highway, pull over and ask for directions.
  5. Diversify. Diversification and asset allocation will help reduce your risk and give you an opportunity to make money across all markets.

The stock market is efficient and it doesn’t care if you’re male or female.   A plan combined with low fees and a diversified portfolio will give you an opportunity to create long term wealth.

So do not fear, for I am with you; do not be dismayed, for I am your God. I will strengthen you and help you; I will uphold you with my righteous right hand.  ~ Isaiah 41:10

Bill Parrott is the President and CEO of Parrott Wealth Management.   For more information on financial planning and investment management, please visit

April 24, 2017

[1], website accessed 4/24/17.

[2], website accessed 4/24/17.

[3], Heather Long, March 8, 2017, website accessed 4/24/17.

[4] Ibid.

Storage Wars.

Driving around my extended neighborhood I noticed several large storage units.    A quick Google search for storage units near my house netted about twenty facilities with more being built.  Storage units cater to people who suffer from affluenza or hoarding.   If you depend on a storage facility, you have too much junk and it may be time for you to part company with your precious items.

If you’ve watched an episode or two of Storage Wars, you know people covet some crazy items.  However, most items are standard like bed frames, mattresses, dresser-drawers, mirrors and other household goods.  Do you still need to keep your T.V. trays, eight-track tape player or rotary phone?

In financial terms, more stuff means higher expenses.   The higher your household expenses are the more assets you’ll need to retire.   The math is simple.  If you’re annual expenses are $50,000, you need about $2 million in assets to retire.   If your expenses jump to $100,000, you need about $ 4 million.

The ability to reduce your expenses will give you the luxury to retire sooner with fewer assets.   A $10,000 cut from your expenses equates to $250,000 less in assets.

Here are few tips you can employ to help you dig out from your pile of stuff.

  1. Take an inventory of the items you want and the items you need.
  2. Donate the items you want to your favorite charity. This will help others in need and give you a tax deduction.
  3. Sell your items at a garage sale. One man’s trash is another man’s treasure.   Can you generate a few nickels from your swag?
  4. Track your monthly and annual expenses. This can be done on Excel or  A strong budget will allow you to make better financial decisions about your future.
  5. Eliminate the storage unit. A 10 x 10 climate controlled storage unit will cost about $175 per month or $2,100 per year.
  6. Are you an empty nester? Can you reduce your household footprint?  Downsizing to a smaller home will take a huge chunk out of your expenses.  A smaller home yields less stuff.
  7. Save your money. After you’ve eliminated some expenses invest your savings.   Let’s say you can save $500 per month because of your cost cutting.   Investing $500 per month at 7% will be worth about $86,500 in ten years.
  8. Start today and do not procrastinate. The sooner you start digging through your pile of things the better your financial future will be!

My wife and I attacked our excess a few years ago and it has been liberating.   The freedom we received from less junk and lower expenses has allowed us to do more with less.

“Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal.  But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also. ~ Matthew 6:19-21.

Bill Parrott is the President and CEO of Parrott Wealth Management and is a fan of less stuff.  For more information on financial planning or investment management, please visit

April 19, 2017

Note:  Your returns and experiences may be more or less than those highlighted in this blog.


Time to Play It Safe?

In 1926 Mrs. Moats invested three dollars in separate investments.  She placed a dollar coin in three distinct boxes with strict instructions to not open them until December 31, 2015.  She invested one dollar in large company stocks for her “risky” box.   Her next dollar was invested in a “safe” portfolio of U.S. Treasury Bills.  In the third box, she kept her dollar in cash just in case box 1 and box 2 ended up worthless.

After the coins were placed in the respective boxes, she buried them in her backyard.

On December 31, 2015, her grandchildren dug up the boxes to see how well her investments performed.   With all the trouble and turmoil during the past 89 years her grandchildren were convinced the safe investments had performed best.   Here is how each dollar fared.

Box 1 – Large Company Stocks.  Her $1 investment is now worth $5,386.  Her large company portfolio returned 10% per year.  Her “risky” portfolio endured years of negative returns and extreme volatility to dramatically outperform her “safe” investments.[1]

Box 2 – U.S. Treasury Bills.  Her $1 investment is now worth $21.[2]   Her “safe” portfolio averaged an annual return of 3.4%.  Her “safe” portfolio made money every year and never had a negative return.

Box 3 – Cash.  The value of her 1926 dollar is now worth about 8 cents.   The purchasing power of her original dollar has been eroded by inflation.   Inflation averaged 2.9% per year during this 89 year stretch.[3]

The U.S. stock market is near an all-time high.  By some measures the stock market is fairly valued if not overvalued.   The public outcry for a stock market correction is increasing as the market climbs higher.  Is it time to play it safe?   Should you sell your stocks and move the money to cash?  In the short term, this strategy may appear prudent.  It would be nice to avoid another stock market correction.

Here are a few things to consider before you sell your growth oriented investments.

  1. When should you sell your stocks? Today?  Tomorrow?  Next week?  How will you know when it’s the right time to sell?   If you sold your stocks before last year’s presidential election, you missed a 16% return.
  2. If you sell your stocks, when should you buy them back? How will you know when it’s safe to get back into the market?  If you were fortunate enough to sell your stocks prior to the 2008 Great Recession, but failed to get back into the market you missed out on a 192% gain.
  3. If you decide to keep your money in cash, you’ll lose money after applying taxes and inflation. At the end of five years, the purchasing power of your dollar will lose about 15%.  In 1988, I could purchase four U.S. postage stamps with my dollar, today I can only buy two. [4]

Long term a safe investment is not so safe.  A buy and hold strategy based on your financial plan is one to employ.  Owning stocks for the long haul will give you the best opportunity to achieve generational wealth.

For whoever has will be given more, and they will have an abundance… ~ Matthew 25:29.

Bill Parrott is the President and CEO of Parrott Wealth Management.  For more information on financial planning and investment management, please visit

April 17, 2017

[1] Dimensional Fund Advisors 2016 Matrix Book.

[2] Ibid.

[3] Ibid.

[4], Historian U.S. Postal Service, website accessed 4/21/2017.

Say What?

I spent most of my youth playing football.  I played football in junior high, high school and college.  Our playbooks included diagrams and words not legible to the lay person. Some of the plays were “I right 30 trap”, “trips right 382”, or “Alabama 99.”  Each play had a different meaning.  After the play was called we all knew our specific assignment.    The language became second nature to everyone on the team because we practiced them constantly.

My friends and I would play pickup games at the park when we weren’t playing organized football.   The play calling for these games was simple and clear.   I might tell Steve to run towards the hippo water fountain and Randy to run at the rocket.   Dave might run to the dead grass spot and then towards the swing set.

Watching CNBC this past week I was amused and horrified with the language used to describe various investments and investment strategies.   Here is a sample.

  1. “We are tactically allocating our risk assets to deliver alpha to our high net worth clients by purchasing high beta cyclical names.” What?   Here is my interpretation of what was said, “We are buying profitable stocks so we can make money for our clients.”
  2. “We are removing risk assets from our satellite portfolio by purchasing low volatility, negatively correlated assets.” Huh?  I would have said we’re buying bonds.
  3. “We’re going to deleverage our non-liquid, alternative assets and transition the proceeds to our short-term liquid account.” Come again?  I think they meant to say they’re selling assets and then depositing the money into their cash account.

Wall Street lingo is designed to confuse the masses.  The wolves use big words and fancy wrappers to sell high commission products to the sheep.  At the end of the day folks there are only three things you can do with your money.  You can invest for growth, income or safety.    If you’re investing for growth, buy stocks.   If you need income, buy bonds.  If you crave safety, keep your money in cash.

As you construct your portfolio ask yourself what investments are needed to achieve your goals.  Focus on simple investment strategies with clear language and hold them for the long haul.  Capisce?

If as one people speaking the same language they have begun to do this, then nothing they plan to do will be impossible for them.  Come, let us go down and confuse their language so they will not understand each other. Genesis 11:6-7

Bill Parrott is the President and CEO of Parrott Wealth Management and is a fan of the simple.  If you want more information on financial planning or investment management please visit

April 13, 2017


Spring Cleaning.

Snow is melting.  Flowers are blooming.  Grass is growing.   Robins are singing.  Spring has arrived.   With the arrival of spring it’s now time for a little spring cleaning.   After months of dark days and cold nights, open some windows and let the fresh air into your home.

When my family and I lived in Connecticut we loved the arrival of spring.  Once the snow melted we’d put our yard back together.   We’d walk around our yard picking up branches and tree limbs.  We’d clear flower beds and add layers of mulch.   On the inside, we’d open several windows and let the fresh spring air whip through our house and force the stale winter air out of our home.

Your investment portfolio may need some spring cleaning as well.   The arrival of spring also marks the end of the first quarter and hopefully you’re closer to achieving your financial goals.

Here a few spring cleaning tips for your investment portfolio review.

  • If you’re holding a losing investment, it may be time to sell it and move the money into a new idea.  Prune your portfolio as you prune your garden.
  • Do you need to trim some gains? If you have an investment worth more than 10%, 20% or 30% or more of your account, it’s time to take some gains.   It’s been said trees don’t grow to the sky.
  • Is it time to rebalance your portfolio? Rebalancing your account will help reduce your risk and keep your original asset allocation intact.   For example, in 2009 you started with a portfolio of 50% stocks and 50% bonds, today your mix is 70% stock and 30% bonds.   The stock market has soared since 2009 and, as a result, your stock and bond allocation is not aligned with your original goal.    A rebalance will fix this issue.
  • The spring is a great time to finish an outdoor project. Adding a deck, pool or barbeque to your home you may enhance the value.  Adding small, international or real estate companies to your account may give it a boost.
  • Do you need to update your will? Has your family grown?  Have you added new asset classes?  With the arrival of spring and the departure of tax season spend some time updating your will.
  • Create a financial plan. A well-constructed financial plan will help you with your annual spring cleaning.  Your financial plan will allow you to focus on your long-term goals with an occasional trim here and there.

Sitting on a deck under sunny skies is an excellent backdrop for the review of your portfolio.   A small change today can bear much fruit tomorrow.

For behold, the winter is past; the rain is over and gone. The flowers appear on the earth, the time of singing has come, and the voice of the turtledove is heard in our land. ~ Song of Solomon 2:11-12.

Bill Parrott is the President and CEO of Parrott Wealth Management, LLC.   For more information on financial planning and investment management please visit

April 10, 2017


Should You Follow Your Dreams?

At the age of 50 I started my own company.   It has been an exciting, nerve racking adventure.   My daughter was about to leave for college and my wife was working part time for a non-profit organization.   I had doubts, anxiety and fear.  I wondered if I made the correct choice.   I had considered other options like staying with my large corporate employer forever or retiring early to join the mission field.   In the end, I decided to launch may own company because it had been a lifelong dream to own my own company.

For the Spirit God gave us does not make us timid, but gives us power, love and self-discipline. ~ 2 Timothy 1:7

I had some case history and a path to follow. My maternal-grandfather started his own company when he was fifty.  Instead of having one daughter in college he had three and his wife didn’t work.   He decided to start his own company after a meeting with his boss, the owner of the company.  His boss was upset because my grandfather was making more money than he was so he quit and followed his dream.  He had a successful business career and a better one as a philanthropist.   If you’ve ever munched a bag of chips or eaten at a fast food restaurant, you’ve benefited from his handiwork.

Be strong and courageous. Do not be afraid or terrified because of them, for the Lord your God goes with you; he will never leave you nor forsake you. ~ Deuteronomy 31:6

In college, I majored in Business Administration a degree best suited for those who want to spend a life wallowing in middle management.   While in college, two of my friends and I bought the rights to a company that produced calendars.  We were business owners!  I learned more about business by owning our little company than all the business courses I took combined.  We had to deal with printers, photographers, models, retail outlets, customers, suppliers, etc.  I loved it!   I knew I wanted my own business but didn’t realize it would be another thirty years before my dream would come true.  Oh well, better late than never!

Yet we urge you, brothers and sisters, to do so more and more, and to make it your ambition to lead a quiet life: You should mind your own business and work with your hands, just as we told you, so that your daily life may win the respect of outsiders and so that you will not be dependent on anybody.  ~ 1 Thessalonians 4:10-13

If you’re ready to burn the boats and start your own company, be prepared for a mountain of negativity and threats.  Most people will not have your courage, wisdom or vision to start a company.   Don’t listen to the naysayers.   You may receive threats from your current employer but trudge on and concentrate on your goal.    Others will think you’re crazy for starting your own company.   They’ll say your too young or too old.   They’ll wonder how you’ll support yourself or how you’ll obtain clients.   The list of negatives will grow proportionally to the number of people you talk to.   Regardless, do it any way!

They will have no fear of bad news; their hearts are steadfast, trusting in the Lord.  Their hearts are secure, they will have no fear; in the end, they will look in triumph on their foes.  They have freely scattered their gifts to the poor, their righteousness endures forever; their horn will be lifted high in honor. ~ Psalm 112:7-9

If you have had visions of starting your own company or on the brink of launching your new adventure, here are a few tips.

  1. There is no perfect plan or perfect time to start your business. A good plan today is better than a perfect plan tomorrow.   If you wait for all the stars to align, you’ll never start your own business.
  2. There has never been a better time in the history of the world to start your own business. The technology today gives you the power to reach billions of people with the click of mouse.  The barriers to entry for most businesses are extremely low and access to capital tremendously high.
  3. If you’re young, take advantage of your youth and enthusiasm. An ideal time to start a business is when you don’t have other commitments like a spouse, children or a mortgage.  You’re free and nimble to pursue your dream.
  4. If you work for a large corporation, honor your employment contract and employment agreement (as I did). If you’re not sure about the big legal words in your contract, hire an attorney who specializes in contract law to help guide you in your decision.  Despite your best efforts, it’s possible your former employer will still sue you anyways so be prepared to spend a few dollars defending your good name.
  5. Hire others to help you launch your vision. Focus on what you do best and hire others to fill in the gaps.
  6. Enjoy your journey. Listen to the words of A.A. Milne, “Rivers know this: there is no hurry.  We shall get there some day.”
  7. Have fun. You’ll experience trials and tribulations but at the end of the day it’s your business with your name on the door and what could be better than that?

Therefore, I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more than food, and the body more than clothes? Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they?  Can any one of you by worrying add a single hour to your life? ~ Matthew 6:25-27.

Bill Parrott is the President and CEO of Parrott Wealth Management and is a believer in reaping what you sow.   For more information on financial planning and investment management, please visit

April 1, 2017