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Dollar Notes

Q1 Newsletter 2024

Simple Mistakes Investors Make

The Real Money Pros

Simple Mistakes Investors Make

Investing is easy. We wouldn't say that it's necessarily simple, but the act of investing is pretty straightforward. What we mean by that is anyone can do it and can do it successfully! While many investors believe that you have to be super savvy when it comes to picking the right companies and buying them at the perfect time, in reality, successful investors stick to simple principles.


Here are some of the most common mistakes we see investors make:

Failing to Define Your Financial Goals

No matter the year, we can expect to see some major market events or news that will cause disruptions. It has happened before and will happen again – it's beyond our control. What we can control are our actions and reactions to these disruptions. Instead of succumbing to impulsive decisions during market uncertainties, we can overcome investor hype and fear by constructing a well-diversified, carefully planned investment portfolio.

An effective investment strategy begins by clearly defining your long-term, mid-term, and short-term financial objectives. Whether it's funding retirement, buying a home, or supporting your children's education, having well-defined goals establishes a solid foundation for your investment strategy. These objectives can certainly change over time, so don't feel that once established, your plan won't ever change.

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Why does this step matter so much? When things go awry and your emotions start to spiral, your financial plan is there to remind you why you're not dumping your life savings into high-flying stocks like Nvidia or Meta. Or, if the market takes a nosedive and your account values plummet, you're not as affected because you know your money will be in the market for another twenty years, for example. Once you establish your goals, you know your 'why.'

Diversification (or lack thereof)

The importance of diversification in investment portfolios cannot be stressed enough. There is plenty of data and research demonstrating that an appropriate mix of asset classes within a portfolio has a far greater positive impact on returns than selecting individual securities or timing the market. Our personal experience as advisors also supports this theory. While "diversification" might sound like industry jargon, it's actually a simple concept to grasp.

We won't delve into the specifics of what your asset class mix needs to be, as the answer will vary for everyone. However, it's crucial to grasp the basic concept so that you can conduct your own research accordingly. Diversification involves spreading investments across various asset classes, such as stocks, bonds, and alternative investments, to mitigate downside risks while still capturing potential gains.

Asset Allocation

Imagine an investor who concentrated their entire portfolio in a single sector, like technology stocks, at the beginning of the year. In this fictitious example, the technology sector had been performing exceptionally well, and the investor wanted to maximize their returns. However, a few months into the year, unforeseen events, such as regulatory changes and global economic uncertainties, triggered a significant downturn in the stock market. Because this investor had a non-diversified portfolio heavily weighted in technology stocks, their investments experienced a substantial decline along with the overall sector. The year-to-date numbers for technology stocks were hit hard, resulting in significant losses for the investor.


Now, consider another investor who constructed a well-diversified portfolio, spreading their investments across various sectors like healthcare, consumer goods, and utilities. While the technology sector faced challenges, the other sectors in the diversified portfolio were not as severely impacted. As a result, the overall impact on the second investor's portfolio was less severe compared to the one heavily invested in technology stocks. They may still have lost money during that year, but not nearly as much as the non-diversified investor.

Investors Trying to be Traders

Let’s be clear that being an investor and being a trader are two distinct roles. An investor typically adopts a long-term approach to financial markets, focusing on buying and holding assets with the expectation of long-term growth. On the other hand, a trader takes a shorter-term perspective, engaging in more frequent buying and selling, often within a single day. Traders rely on technical analysis, charts, and market trends to make quick decisions aiming to capitalize on short-term price fluctuations. Unless being a trader is your day job, you’re most likely the investor in this comparison.

Investors vs. Traders

There is absolutely nothing wrong with being a trader, but if you don’t really know what you’re doing, you’re likely to get burned. Constantly buying and selling securities to try to take advantage of every immediate move in the market can quickly incur transaction fees and taxes, creating detrimental effects on your overall returns. This can also lead to prematurely selling off your winners and buying the losers too early.

All we want you to take from this section is to not get too caught up in the day-to-day movements of the stock market. If you’re not very disciplined, this could lead to impulsive, emotional decisions that may ultimately be disadvantageous to your long-term investment strategy. High amounts of fees will quickly eat into your returns!

Not Understanding Your Risk Tolerance

There is no reward without risk. If you're investing to make money, you will have to deal with inherent risks that come with it. Taking on too much risk can result in significant swings in your portfolio's performance, potentially pushing you far out of your comfort zone. This could lead to a favorable outcome or the destruction of your retirement nest egg. On the other side of the coin, taking on too little risk may result in returns that fall just short of your financial goals.

Risk and reward when investing.

It's imperative that you find the perfect balance of risk and reward, and it will look different for everyone. As a general rule, a younger investor early in their career can take on higher-risk investments since they have more time to ride out downturns. However, this isn't true for a recently retired teacher who needs to preserve their money to prevent outliving their retirement funds.

Examine your own personal situation and consider where you are in life, then act accordingly. Also, note that your risk tolerance changes as life goes on, which is why rebalancing your portfolio every so often is crucial.

Getting Lost in the Noise

Everywhere you look, there are news sources, social media influencers, and publications gunning for your attention with information about what to buy or sell, what’s hot and what’s not. It can be confusing when one source says ‘buy,’ and another says ‘sell.’ Just know that these people are most likely not concerned about your portfolio’s performance. While they may generally provide good advice, they don’t know anything about your current financial situation – let alone your mere existence.


Before making any decisions, it's important to figure out what information really matters and what is just noise. A useful rule to remember is that, in many cases, by the time you receive the news in your inbox or notifications, the market has probably already considered it, so acting on it might be too late anyways.

Fear mongering headlines (not real)

[NOT real headlines]

If you come across something online that sparks your interest, be sure to do your due diligence and research thoroughly. Figure out the talking head’s incentives and ensure they are a credible source. Discussing these matters with your advisor before taking action is always the safest route.


(Yes, we see the irony of a financial media company telling you to beware of financial media companies.)

Trying to Time the Market

While we would all love to make the perfect trade by buying a stock at its lowest and selling at its highest, it just isn’t realistic. This is especially true for people like us who can't spend their whole day analyzing trends and figuring out what's going on hour by hour.


We've mentioned this before on our radio show, but it tells us so much: An investor who excluded themselves from the market between January 1, 1980, and December 31, 2021, would've missed the S&P 500’s top five trading days. The result? They would've seen a 43% drop in their returns compared to an investor who remained fully invested during that same period. In other words, instead of having a $1M retirement account, theirs would only contain $430,000. All because they were looking for the "ideal" time to get back in.

Timing the market vs. time in the market

The reality is that predicting those optimal market moments is a near-impossible task, often leading to missed opportunities and diminished returns. The key takeaway here is that, while the temptation to time the market may sound enticing, the data strongly suggests that a patient and steadfast approach tends to yield better results in the journey of long-term wealth-building.

Falling Victim to Emotion

We all have feelings, especially when it comes to our money! Fear, driven by market downturns or economic uncertainties, may prompt impulsive reactions such as selling off investments at inopportune times. On the other side, excessive optimism during bull markets can lead to risky behavior and overexposure to certain assets – likely resulting in detrimental results (high reward, high risk). The extent to which this applies is different for everyone, so it’s worthwhile to delve deep into yourself and determine whether you're prone to making emotional decisions.


If the ups and downs of the investing process become overwhelming for you, it's then worthwhile to consider working with a financial advisor. Yes, telling you this benefits our industry, but it's also advice that turns out to work in favor of a client, especially if they tend to be more on the emotional side when it comes to decision-making.

New Year, New Act
The Corporate Transparency Act & What Small Businesses Need to Know

Stephanie Helms, CPA

Corporate Transparency Act

Are you, like millions of other Americans, an owner of a small business? If so, you should keep reading because a drastic change is coming. Beginning January 1, 2024, the Corporate Transparency Act (CTA) is now in effect, which will impact millions of business owners across the United States. The reported purpose of the CTA is to combat concealment of illicit financial activity in “shell” corporations or other reporting entities in the United States. While the purpose is to uncover illegal financial practices, small businesses can now say goodbye to any privacy they might have previously enjoyed and it is those honest business owners that will really have to bear the burden now.

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The CTA requires all reporting companies, or qualified companies that filed a document with the secretary of state, to submit a Beneficial Ownership Information (BOI) Report to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). This is not an annual, but rather one-time report, apart from updating prior information. First, you will have to determine if you meet the criteria as a reporting company (heads up, you most likely do). Unless you are a publicly traded company, have more than 20 full-time employees with more than $5 million in gross earnings, or meet one of the other 21 exemptions, you need to submit a BOI report (see for more information).


Next, all beneficial owners’ information must be submitted with the BOI report. A beneficial owner is one who has at least 25% ownership or exercises substantial control. Below are indicators of individuals that qualify as beneficial owners even if they have no ownership in the company. 

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The necessary owner information includes their name, date of birth, and address, along with an identification number and an image of the document used (e.g. non-expired State issued license or U.S passport). Company information is also needed, which includes the company name, any trade names, address, and other identifying numbers and jurisdiction of formation. If there is any change to the provided information, an updated report must be filed within 30 days to avoid penalties (albeit there is a safe harbor period for voluntarily submitting a corrected report).

There are also deadlines for filing an initial report, found below.

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This is a serious burden that so many small business owners are unaware of; they need to be extra careful with any change in personal or company information and hastily update it with FinCEN or face civil and/or criminal penalties that can result from failure to comply with the above deadlines. This includes civil penalties of $500 per day of the violation and criminal penalties of up to $10,000 and two-years imprisonment. Due to the extensive amount of unawareness surrounding this new law, there are multiple groups seeking to have congress delay the effective date of this act and you can express your concern as well by writing a letter or email of opposition to your local congresspeople to request a change of law.


For more information on how to file a BOI report and all requirements or exemptions, visit:


All images containing information pertaining to BOI reporting requirements are property of the Financial Crimes Enforcement Network’s “Small Entity Compliance Guide” and are used in this article for the sole purpose to inform all relevant users and the general public.

Stephanie Helms CPA head shot

written by:

Stephanie Helms, CPA

brought to you by:

Stewart & Associates, P.A.
Superior Cloud Accounting


Seizing the Opportunity:
The Cost of Waiting to Buy a Home Amidst Shifting Market Dynamics

cost of waiting to buy
The Cost of Waiting: Buying a Home

In the ever-evolving landscape of the real estate market, timing is crucial, and the decision to buy a home is no exception. As we navigate through predictions of rising home prices and anticipated decreases in interest rates over the next 3-4 years, it's imperative to explore the potential costs of waiting to make that homeownership leap.

The Forecast: Rising Home Prices

Experts in the real estate industry are forecasting a consistent upward trajectory in home prices over the coming years. Several factors, including increasing demand, limited housing supply, and inflationary pressures, contribute to this projection. For potential homebuyers, this means that the longer one waits to enter the market, the more they may have to pay for the same property.

Consider this: waiting a year or two could result in a significant uptick in the cost of your dream home. This is particularly relevant for those looking to settle in high-demand areas where property values tend to appreciate rapidly. Taking a proactive approach now could potentially save you thousands of dollars in the long run.

Interest Rates: A Silver Lining

While home prices are on the rise, there's a contrasting trend in interest rates. Analysts suggest a likelihood of interest rates decreasing over the next few years. This can be attributed to various economic factors, including government monetary policies aimed at stimulating economic growth.

Let's delve into a specific example to illustrate the potential impact on your finances. Consider a home priced at $650,000 today, with an initial interest rate of 6.5% on a 30-year mortgage. Assuming interest rates decrease every six months by 0.50%, a buyer who acts promptly could see a substantial reduction in their monthly mortgage payments.

The Cost of Waiting: An Illustrated Example

In this scenario, waiting could result in a substantially higher overall cost of a home. The financial implications of delaying the decision to buy could be significant, affecting both the upfront cost of the home and the long-term affordability. Remember, you can always change your rate through refinancing when it makes sense – However, you can never change the price that you purchased a home for.  With home prices predicted to increase over the next 5+ years… sooner is always better than later!

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Download the breakdown:

Seizing the Moment

In conclusion, the current real estate landscape offers a unique balance between rising home prices and anticipated decreases in interest rates. For those contemplating homeownership, the cost of waiting could be a considerable factor. By acting decisively, potential buyers have the opportunity to secure their dream homes at a more affordable cost.

It's essential to stay informed, consult with a reputable lending professional, and assess individual circumstances. As we navigate these market dynamics, seizing the moment could be the key to unlocking significant savings and securing a brighter future in your new home.

Wishing you informed decisions and successful home buying journeys!

dave perry branch manager academy mortgage head shot

brought to you by:

Dave Perry, Branch Manager
Academy Mortgage Corporation


Selling Your Business
Ensuring a Smooth Employee Transition

Selling Your Business

There are so many parts to selling your business that one brief article can’t cover them all. In fact, there are thousands of books written about the topic! I do want to take a little time to talk about an important subject that is often overlooked until the end, when it can really cause problems or break a deal. That is, how do you handle your employees when selling your business?

Some owners want to talk to their employees as they are going through the process of selling their business. Other owners don’t want to tell them until the deal is done. When an owner sells a business, it can be a scary, unknown situation for their employees. All too often, valuable employees will leave the company or start looking for another opportunity when they feel uncertain about their future. Some employees will be excited and want to be part of the process, while the rest may fall somewhere in the middle. The point is, you simply don’t know how employees will react when they find out you are selling the business.

The employment regulations and logistics of how employees are handled in a business deal depend on the type of transaction. If it is a stock transaction, the buyer is purchasing your stock or all membership in the entity (keeping the same FEIN). In this case, the employees remain actively employed with the company, and nothing changes for them. For this type of situation, the timing of when you tell employees about the business ownership change is up to you. Since they remain employed with the company, you can tell them after the deal is completed to reduce unnecessary stress and minimize the risk of losing good employees.


If the transaction is an asset purchase (which is more common when a business is purchased), then that means the corporation and FEIN are going to change. In this situation, the employees are usually not part of the transaction. By law, they would be terminated from the company being sold and could then be hired by the “new” company. This process is a very sensitive one because you don’t know how they will react. It is important to coordinate with the employees you want to keep prior to the transaction happening. You will need to explain to them that they will be terminated and then can be hired by the new company. When employees receive this news, they may start looking for another job opportunity because they will be “unemployed” for a brief period. While this may not be your intention, it happens more often than you would expect.

Most of the time in an asset purchase, unless the company is small and the jobs are included in the sales agreement, there are likely to be employees who will leave. Unfortunately, it is often your high-performing employees who you will lose. I have seen this type of situation ruin deals because key employees who are valuable to the long-term success of the company leave. Sometimes this can be mitigated, but most of the time it is not.

There is literally only one solution I have seen work smoothly in both situations. It is when the company being sold has a partnership with a PEO (Professional Employer Organization). A PEO has a “co-employment” agreement with client companies, meaning all their employees are “employed” by the PEO company under the PEO’s FEIN. Because the employees are employed by the PEO according to the IRS, their jobs are not impacted when an asset sale happens with the client. There is no interruption to their employment under the PEO, so you can decide when it is the best time to talk to your employees. Using a PEO when selling your company provides the most flexibility for putting together a transaction that best meets your needs, without worrying about what will happen with your employees during the process.


While there are many PEOs across the US, the level of service and support you receive depends on your PEO partner. At Ataraxis PEO, our unique approach to partnerships and service delivery ensures that we support your success before, during, and after the sale of your business. We work seamlessly as your HR department to make sure your employees are taken care of throughout the entire process. There is no interruption in their HR, payroll, or benefits services. If a sale of the company occurs, the employees continue to do what you need them to do with no major interruptions in work.

In most cases, we continue to seamlessly provide HR, payroll, and benefit services for the new owner(s). However, if the buyer has a different solution in mind or is a much larger organization that has what we do in-house, then we will work closely with the new owner on a well-planned and smooth transition. Owners that do not have a PEO partner are left with doing all the work on their own when the deal closes, causing the employees to feel as if they are an “afterthought” in the transaction.

If you are thinking about selling your business or buying a business, please feel free to reach out to me directly or contact the Real Money Pros. I am happy to talk through any ideas or potential plans with you. If you are curious about how Ataraxis can help your business, please reach out.

We look forward to talking with you!


brought to you by:

Steve Cilley, CEO
Ataraxis PEO

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