At Hill Investment Group, we spend our days immersed in markets and evidence. We know most people don’t, and our clients rely on us to do that work for them.

Even the most financially literate investors can encounter misconceptions, often picked up from friends, social media, or the financial press. Many of these are rooted more in behavior and emotion than in evidence.

Here are a few we hear regularly, along with an evidence-based perspective on each.

It can be easy to think of dividends as “free money” from an investment, and some even choose funds solely for their dividend yield. The reality is that when a company pays a dividend, the value of its shares is reduced by the same amount. For example, if you hold a $20 share and it pays a $2 dividend, you now have $2 in cash and a share worth $18—the total value is unchanged.

Companies that reinvest profits into their business sometimes create more long-term growth than those that pay them out. At Hill, we view dividends as one element of total return and often as a way to rebalance portfolios in a tax-efficient manner.

For clients who rely on investments for retirement income, we may help design a withdrawal plan by selling shares. This approach allows:

• Investment decisions to be based on total return, not dividend yield alone.
• Greater flexibility to manage tax impact by choosing which holdings to sell.

This can be more tax-efficient than receiving dividends automatically, which are taxable whether you need the income or not.

No one enjoys seeing an investment go down. But in certain cases, realizing a loss can provide a tax benefit while keeping your long-term plan intact.

For example, tax-loss harvesting involves selling an investment that has declined, capturing the loss to reduce taxes today (or in future years), and reinvesting in a similar security to maintain your portfolio’s strategy.

This doesn’t remove the reality of market downturns, but it can turn them into opportunities for tax management. While individual investors may not do this on their own, professional advisors often monitor for these opportunities as part of portfolio management.

Because U.S. companies are most familiar, many investors lean heavily toward them—sometimes without realizing it. Yet the U.S. represents only about half of the global market, which means there is significant opportunity beyond our borders.

Diversifying globally can help manage risk and position a portfolio to benefit from growth wherever it occurs. History has shown that different markets lead at different times. For example, U.S. stocks lagged from 2000 to 2010 while international markets performed better. In other periods, U.S. stocks have led. Since no one can predict which region will outperform next, broad diversification helps reduce reliance on a single market.

Investing comes with complexity, and misconceptions are common. Our role is to help clients cut through the noise and make evidence-based decisions that support a long-term plan.

If you know someone who might be interested in learning more about this approach, we’re glad to share educational resources or have an introductory conversation. They can reach us at askanadvisor@hillinvestmentgroup.com.

“Rick, what are some interesting activities that others are doing that bring joy to their lives?” This is a question that many of my older clients often ask me. I suggest family vacations, volunteering at a charity, and being with your grandkids.

I would now like to recommend something that was never on my bucket list until COVID forced me to spend more time indoors – writing a book about my life!

This process started when my son gave me a Christmas gift in December 2021 called StoryWorth, a website that simplifies writing and publishing a book. Every week for 52 weeks, I received an email with a question. I then would answer that question. I could also eliminate their suggested questions and ask ones I felt were more relevant to me.

Below are some questions asked by StoryWorth:

–  Tell me about your parents and grandparents.

–  How is life different today compared to when you were a child?

–  How did you meet your wife?

–  What advice would you give to your children and grandchildren?

I added some of my own questions, such as:

–  Why was a trip to Russia on your bucket list?

–  What factors do you feel attributed to your long, continued marriage?

–  What is one of the scariest situations you’ve faced in your life?

You can add pictures throughout the stories. This motivated me to go through stacks of old photo albums, many of which were in black and white, of my parents, grandparents, and my younger self.

 My wife and two children were my editors. They added additional information and accuracy to my stories and added more pictures. The book is now 307 pages and includes many priceless photos.

Challenges of my experience:

• Takes time, especially for me, because I tend to write in bullet points, not paragraphs. However, there is no deadline to complete the book…it took me 18 months. The support group at StoryWorth was very helpful in answering my questions.

Benefits of writing a book:

• My grandkids and future generations will know more about my life stories, including several stories that were new to my wife and children,
• The book contains the “greatest hits” pictures rather than losing them somewhere in the basement or on someone’s iPhone,
• Immense personal satisfaction from having written a book.

My takeaway:

I wish my parents and grandparents had written a book about their lives and advice for me and future generations. Now, with current technology, writing a book is much easier. Being older is an opportune time to tell one’s life stories while we still remember them. This is also a perfect gift for parents and grandparents. If you want information on writing a book using StoryWorth, I would be glad to talk with you!