When it comes to investing, there’s no such thing as a bad question. That’s why we created Questions You Were Afraid to Ask—to tackle the common yet sometimes intimidating financial questions many people hesitate to ask. In our last post, we explored why the Dow is valued so much higher than the S&P 500. Now, let’s turn to a question that’s crucial for every investor: What’s better, stocks or bonds? Questions You Were Afraid to Ask #3: What's Better, Stocks or Bonds? When you purchase a bond, you are essentially loaning a company, government, or organization money. When you buy stock, you are purchasing partial ownership in a company. For this reason, stocks are equity investments while bonds are debt investments . Before we answer Question #3, let’s examine how each type works. How Stocks Work When you buy a company’s stock, you’re purchasing partial ownership in that company. The more shares you own, the greater your stake. Stocks have the potential for high returns, but they also come with risks. For example, imagine you invest $5,000 in ACME Corporation at $50 per share, giving you 100 shares. If the company grows and its stock price rises to $75, your investment is now worth $7,500. However, if the company underperforms, your investment can lose value just as quickly. Pros of Stocks: Historically, they outperform other asset classes over the long term. Stocks offer liquidity, meaning they can be bought and sold relatively easily. Ownership in a growing company can lead to significant wealth accumulation. Cons of Stocks: Stock prices are volatile and can change dramatically. If a company performs poorly or goes bankrupt, you may lose your entire investment. Selling stocks at a profit can lead to capital gains taxes. How Bonds Work Bonds, on the other hand, are essentially loans you give to a company, government, or organization. In return, they agree to pay you back with interest over time. Bonds are generally viewed as safer investments because they provide a predictable stream of income. For example, if you purchase a bond, the issuing entity agrees to pay you regular interest payments. Once the bond matures, you get your initial investment back. However, bond values fluctuate based on interest rates and market conditions. Pros of Stocks: Typically, they are less volatile than stocks. They provide regular, predictable income through interest payments. Bondholders have a higher claim on assets than stockholders if a company faces bankruptcy. Cons of Stocks: Bonds usually offer lower returns compared to stocks. Interest rate changes can affect a bond’s value before it matures. If you sell before maturity, you may receive less than your original investment. Stocks vs. Bonds: Which is Better? The answer is: It depends on your financial goals, risk tolerance, and time horizon. Stocks offer higher potential returns but come with greater risks. Bonds provide stability and income but may not grow your wealth as quickly. Instead of choosing one over the other, many investors opt for a combination of both. Stocks and bonds are considered non-correlated assets , meaning they don’t always move in the same direction. If the stock market declines, bond values may remain stable or even increase. This balance can help manage risk while still allowing for growth.n another company. The Power of Diversification Most successful investors don’t put all their eggs in one basket. A mix of stocks and bonds can provide both growth and stability. This strategy, known as diversification, helps manage risk and smooth out market fluctuations over time. What's Next? Deciding which stocks and bonds to invest in is an entirely different challenge. That’s why next month, we’ll discuss another common investment question: How do funds work, and why do some investors prefer them? Until then, remember—there’s no such thing as a bad financial question! If you have one you’d like us to cover, visit our contact page and let us know. Happy investing! Your Questions Are Welcome While we have a list of topics planned, we want this series to be as helpful as possible. Do you have a financial question you’ve been hesitant to ask? Is there a term or concept you’d love to have explained? Let us know—because this series is for you! Simply visit our contact page and send us a message with your question or topic idea.

Why a Down Market is an Investor's Best Friend It’s natural to feel uneasy when the market takes a dip. The financial news turns grim, the headlines scream uncertainty, and it can be tempting to hit the brakes on investing altogether. But here’s the truth: A down market isn’t a disaster—it’s an opportunity. If you’re a long-term investor, market fluctuations are just part of the journey. Just like you wouldn’t check your home’s value daily and panic over small shifts, there’s no need to obsess over the short-term ups and downs of your investments. What matters most isn’t what happens today or tomorrow—but where you’ll be five, ten, or twenty years from now. The Hidden Opportunity in a Down Market When stock prices drop, most people see red. But seasoned investors see something else: a chance to buy in at a discount. Think of it like a sale on high-quality companies and funds that were once priced too high to justify. This is the time when money managers, institutions, and long-term investors take advantage of lower valuations to buy more shares at reduced prices. And here’s where you come in. If you have idle cash—such as an old 401(k) from a previous employer or a CD that’s just sitting there—this could be the perfect moment to put that money to work. By moving those funds into the market now, you can buy in at today’s lower prices, setting yourself up for potential future growth when the market rebounds. While market downturns can feel unsettling, history has shown us that they don’t last forever. But the investors who take action during these periods? They often position themselves for stronger long-term financial success. Your Investments are Built for the Long Haul Your financial future isn’t built around short-term headlines or political events. It’s built on time-tested investment strategies designed to grow your wealth over years and decades. Market fluctuations—no matter how dramatic—are just part of the process. And remember: if we ever believed you needed to make a change, we’d tell you. Our goal is to help you navigate the market with confidence, providing clarity when the noise gets overwhelming. Now is the Time to Act The best opportunities often come when fear is high and prices are low. Instead of sitting on the sidelines, consider taking advantage of today’s market conditions to position yourself for long-term success. We invite you to take the first step. A 30-60 minute complimentary consultation could change your future. Let’s talk about how you can make the most of this moment and set yourself up for success. 📩 Email us at info@assurancewm.com 📞 Call our office at 281.440.4200 Because in investing, “down” doesn’t mean disaster. It just means opportunity is knocking—are you ready to answer?  All written content on this site is for information purposes only. Opinions expressed herein are solely those of Assurance Wealth Management and our editorial staff. The information contained in this material has been derived from sources believed to be reliable, but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Advisory services are offered by Assurance Wealth Management a Registered Investment Advisor in the State of Texas. Assurance Wealth Management is not affiliated with or endorsed by the Social Security Administration or any other government agency. The presence of this website shall in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Texas or where otherwise legally permitted. All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions.

When it comes to finances, there’s no such thing as a bad question. That’s why we started our series, Questions You Were Afraid to Ask, to tackle common financial curiosities that many investors hesitate to ask. Last time, we explored the difference between the Dow, S&P 500, and NASDAQ indices. Today, let’s dive into another related question: Questions You Were Afraid to Ask #2: Why is the Price of the Dow So Much Higher than the S&P 500? To understand this, let’s do a quick experiment. Open your browser and search for “S&P 500.” Take note of the number you see. Now, do the same for “Dow Jones.” Notice something? The Dow’s number is significantly higher—by tens of thousands of points! But why? After all, the S&P 500 includes 500 of the largest American companies, while the Dow only tracks 30. Shouldn’t the S&P be higher? The answer lies in how these two indices are calculated. Buckle up—we’re about to do some math! How the Dow Jones is Calculated The Dow Jones Industrial Average (DJIA) tracks the performance of 30 prominent U.S. companies, such as Apple, Coca-Cola, and Walmart. The index is calculated by adding up the stock prices of these 30 companies and then dividing the total by the “Dow Divisor.” Originally, this divisor was simply the number of companies in the index, but today, it’s adjusted regularly to account for stock splits, changes in listed companies, and other market events. As of now, the Dow Divisor is 0.15172752595384 . 1 This means that instead of simply averaging stock prices, the Dow’s final value is essentially a multiplied sum. For every $1 change in a stock’s price, the Dow moves by about 6.59 points (1 ÷ 0.15172752595384). This is one reason the Dow’s overall number is so high. How the S&P 500 is Calculated Unlike the Dow, which is price-weighted , the S&P 500 is a capitalization-weighted index. Instead of simply adding stock prices, the S&P considers each company’s market capitalization (stock price × total shares available). This method gives larger companies more influence over the index’s movements. Because of this difference, the S&P 500 uses a much higher divisor—currently over 8,000 2 —to keep its value at a more manageable level. This prevents the price movements of a few companies from disproportionately affecting the index. Weighted vs. Unweighted Indices Most stock market indices are weighted because not all companies are equal. Some have higher market capitalizations, meaning they have more shares available and contribute more to the overall index. Here’s a simple way to understand this: Unweighted Index Example: Imagine an index with three companies. If one goes up 15% , another goes up 10% , and the last one goes up 5% , the index would rise 10% on average. Weighted Index Example: If the first company is much larger than the other two, its stock price movement will have a greater effect on the index’s performance. Since the S&P 500 weighs companies based on market cap, larger companies like Microsoft or Amazon move the index more than smaller ones. Meanwhile, the Dow’s simple price-based approach means a company with a high stock price (like Goldman Sachs) has a greater influence, even if it’s smaller in market cap than another company. Key Takeaways The Dow is price-weighted , meaning its value is influenced by stock price changes, not company size. The S&P 500 is capitalization-weighted , meaning larger companies have more influence over its value. The Dow’s divisor is much smaller than the S&P’s, making the Dow’s total price significantly higher. Why This Matters Understanding how indices are calculated helps investors make sense of financial news. The next time you hear, “The Dow finished at 35,000 today,” or “The S&P 500 is up to 4,675,” you’ll know why the numbers are so different and what they really mean. Next time in Questions You Were Afraid to Ask, we’ll take on another common financial question: What’s the difference between stocks, bonds, funds, and other types of investments? Stay tuned! Your Questions Are Welcome While we have a list of topics planned, we want this series to be as helpful as possible. Do you have a financial question you’ve been hesitant to ask? Is there a term or concept you’d love to have explained? Let us know—because this series is for you! Simply visit our contact page and send us a message with your question or topic idea. 1 Barrons.com, “Market Lab”, https://www.barrons.com/market-data/market-lab 2 “S&P 500 Divisor”, YCharts, https://ycharts.com/indicators/sp_500_divisor

“What should we do about tariffs?” It’s a question I’ve been hearing a lot lately, often with a hint of concern. Tariffs have been making headlines, and uncertainty is rippling through the markets. In this post, I want to address this concern, not just by looking at the facts but by discussing how we, as investors, should think about volatility and uncertainty. Understanding the Tariff Impact If you’ve been following financial news, you know the markets have been on edge. Recently, new tariffs were implemented: a 25% tariff on Canadian and Mexican imports 1 and an additional 10% tariff on Chinese goods 1 , adding to the 10% duty from last month. The reaction was swift. On March 4, the Dow plunged over 600 points 2 , and the NASDAQ has been teetering on the edge of correction territory. When events like this happen, fear starts creeping in. Investors begin asking questions: Are we headed for a market correction? Will the economy slide into a recession? Should I change my investments? Should I pull out of the market entirely? These are the questions dominating conversations, both online and in the workplace. But are they the right ones to ask? The Real Risk of Tariffs Tariffs are more than just a political bargaining tool. While they can generate revenue and influence trade negotiations, they also increase business expenses, which can reduce corporate profits. More often than not, companies pass these costs to consumers through higher prices, contributing to inflation—something we’re already battling. But beyond the immediate financial impact, the real issue is uncertainty. Investors don’t know how long these tariffs will last, whether they will increase, or what their full economic impact will be. That unknown is what fuels market volatility. As the writer H.P. Lovecraft once said, “The oldest and strongest kind of fear is always the fear of the unknown.” Why Fear Can Lead to Costly Mistakes When fear sets in, our natural instinct is to act. If you know it might rain, you bring an umbrella. If you expect rush-hour traffic, you leave early. These are short-term solutions for short-term problems. But investing isn’t about the short term—it’s about long-term strategy. One of the biggest mistakes investors make is reacting to fear in ways that can have long-term consequences. Pulling out of the market in anticipation of a downturn might seem like a smart move, but it’s incredibly difficult to time the market correctly. As legendary investor Peter Lynch once said: “Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in corrections themselves.” 3 Time and again, investors sell off assets in panic, planning to reinvest when things “calm down.” But more often than not, they miss the rebound, sitting on cash while the market climbs back up. A Better Approach: Think Like a Gardener A more effective way to think about investing is to view it like tending a garden. When you plant a garden, you don’t uproot your tomato plants and replace them with squash at the first sign of bad weather. You don’t move everything into pots because there’s a chance of hail. Instead, you choose the best possible soil, plant with care, water only when necessary, and harvest when the time is right. Investing should be the same. You don’t make drastic changes based on short-term volatility. You stay patient, stick to a well-thought-out plan, and trust in the process. The market will have ups and downs, but long-term discipline is what leads to success. The Questions You Should Be Asking Instead of reacting to market turbulence with fear, consider these questions instead: If I pull out of the market now, how will I know when to get back in? Would I rather endure a short-term correction or risk missing out on a long-term recovery? Do I really want to sell investments I believe in, only to buy them back at a higher price later? Final Thoughts Tariffs and trade wars are real concerns, and market volatility can be unnerving. But at Assurance Wealth Management , we don’t let fear drive decisions. We focus on patience, discipline, and consistency—the qualities that lead to long-term financial success. While we can’t control tariffs or market reactions, we can control our own response. We can remain patient, stay focused on long-term goals, and make informed decisions based on strategy rather than short-term market movements. Market fluctuations are a normal part of investing, and historically, disciplined investors who stick to a well-diversified plan tend to see better outcomes over time. Rather than reacting to headlines, now is the time to ensure your financial strategy aligns with your individual goals and risk tolerance. Staying invested and maintaining a diversified portfolio can help manage risk, though it’s always important to review your plan regularly and make adjustments as needed. If you have questions about how tariffs or market conditions could impact your financial future, give us a call at (281) 440-4200 to schedule a time to review your portfolio and discuss strategies tailored to your needs. Sources 1 “Trump puts tariffs on thousands of goods from Canada and Mexico,” CNBC, https://www.nbcnews.com/politics/economics/trump-puts-tariffs-thousands-goods-canada-mexico-risking-higher-prices-rcna194542 2 “Dow tumbles again, loses more than 1,300 points in two days,” CNBC, https://www.cnbc.com/2025/03/03/stock-market-today-live-updates.html 3 “From the Archives: Fear of Crashing,” Worth.com, https://worth.com/from-the-archives-fear-of-crashing/ All written content on this site is for information purposes only. Opinions expressed herein are solely those of Assurance Wealth Management and our editorial staff. The information contained in this material has been derived from sources believed to be reliable, but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Advisory services are offered by Assurance Wealth Management a Registered Investment Advisor in the State of Texas. Assurance Wealth Management is not affiliated with or endorsed by the Social Security Administration or any other government agency. The presence of this website shall in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the State of Texas or where otherwise legally permitted. All written content is for information purposes only. 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