I hope you had a great Fourth of July holiday!

Here at the Scheidt house, we enjoyed some great family time. And it was also nice to have an extra day with the market closed.

Of course, that means packing more work into a shortened workweek. But I'll take that tradeoff if it means extra time with friends and family.

I truly enjoyed hearing from many of our readers over the Independence Day weekend.

To those who wrote in and let me know what you were up to — or sent me pictures of your parties and gatherings — a heartfelt thank you!

It's always a privilege to hear from you, and it helps me feel more connected to our Rich Retirement Letter community.

So please keep the comments, questions, and feedback coming! (Remember, no personalized advice.)

Our address is RichRetirementFeedback@StPaulResearch.com. And I enjoy reading every email we receive.

Now, let's rip open the Rich Retirement Letter mailbag and see what's been on your mind this past week!

Celebrating Our Nation's Birthday

It truly warmed my heart to hear from so many of our readers celebrating this Fourth of July.

It's such a special experience to get together with loved ones — especially after the coronavirus challenges from the past year.

Here are just a couple of the great messages I received from our members:

“Independence Day 2021 — I'm thankful for the chance for all in our AZ Family to celebrate together at our Daughter’s home. Also new friends celebrating with us.

BBQ Ribs, Baked Beans, and Salads fill the menu. We will play Games with 4 Generations participating. Can’t wait!! — Bill V.”

Thanks for sharing, Bill! Sounds like you guys had quite the event. I hope the day was everything you expected it to be and that you and your family enjoyed the special time together.

“Great 4th story tradition & really like your financial perspectives. Plus love positives about America which too many have lost sight of or never cared to learn.

Our family through generations has always made sure we watched fireworks somewhere whether we lived in US or abroad. Parents have passed and kids are grown and spread around — but all find fireworks somewhere at the end of the day.

We’re in Mexico right now but lots of American gringos ready to find fireworks somewhere down here on the 4th. God bless America, our history, and what has made our country the envy of the world if we don’t screw it up. Best. Keep up the good work. — David B.”

Thanks for the kind words, David!

I think we have similar perspectives when it comes to our country. I'm very grateful for the many freedoms we enjoy.

And while our past is checkered with both positives and negatives, I truly believe this is a wonderful country and I'm grateful to call the U.S. my home.

Hopefully, we can continue to make improvements to increase the opportunities that we all have.

I definitely want to teach my kids to work hard to avoid feeling entitled and to always be generous to those in need.

If we all kept that spirit, I think this country could continue to improve and be a great place for all of our families.

Should Regulators Tell Me How to Trade?

I got a very thought-provoking email from Bill C. asking my opinion on FINRA's Pattern Day Trading Rule.

This is an important rule to be aware of — especially in today's market when so many individuals are actively trading in and out of specific stocks.

FINRA (short for the Financial Industry Regulatory Authority) is one of the governing bodies that creates rules for what type of accounts have access to specific markets, how brokers vet and provide access to their clients and much more.

The Pattern Day Trading Rule starts by classifying a trader as a "pattern day trader" if they buy and sell the same security on the same day — and do this four or more times within five business days.

If you’re classified as a pattern day trader, you must keep at least $25,000 in your brokerage account.

Otherwise, you may be restricted to only closing out trades for a while.

The FINRA web page on pattern day traders provides a lot of good information on how this rule works.

Bill's email expressed concerns that this rule restricts individuals from being able to freely invest their capital. And I tend to agree with him!

I do think that today — with all of the education and information freely available to new investors — people should be free to trade their accounts.

And this even includes active trading throughout the day if that's what they want to do.

Still, I would caution that active trading (especially day trading) can be a very difficult way to make money.

Believe me, I tried early in my career with a lot of thought and planning and studying.

Even though I had many of the best systems and indicators available to me and I used a lot of personal discipline, it’s still a difficult endeavor.

So yes Bill, I would agree with you that in our free market, investors should have the ability to trade how they wish.

But I think our approach of investing with a longer time horizon will ultimately bring much more reliable profits.

Personal Friendships and Business Partnerships

A few readers sent me notes about their experiences going into business with friends. This, after my story about my own tough experience starting a business with my friend.

Here's one of the notes I received from D.H. on the subject...

“I learned the hard way to never, ever, ever get into a business partnership. The simple reason is that you cannot control the outcome. Mine ended in my personal bankruptcy over 40 years ago.”

I'm sorry to hear about your experience, D.H. I can certainly empathize with the tough situation the bankruptcy must have put you in.

Hopefully, you were ultimately able to recover financially and move forward with the lessons you learned from the process.

That's all any of us can do right?

Take in as many lessons as we can from life and try to walk through each season with as much wisdom and grace as we can.

Tracking Sentiment in the Markets

As investors, there are thousands of different statistics and indicators we can study for the market.

My team and I follow many of these so we can bring you the most relevant information (without you having to dig through all of the data.)

Here's a question from fellow Rich Retirement Letter reader Joe:

“Hey Zach Do you use or believe in any sentiment tracking tools like DailyFX or ?? Hope the hiking is going well this summer!”

Great to hear from you, Joe! (And I'm enjoying time on the trails when I can get it.)

I don't use DailyFX for sentiment signals, but I do keep track of many different sentiment indicators every week.

Typically, sentiment levels for individual investors can be a contrarian indicator.

In other words, when individuals feel overly confident about the market, it's often more likely that the market will pause or trade lower. (That's because when individuals are bullish, it often means all potential buyers have already put their capital to work.)

There are sentiment indicators that also track institutional investors, newsletter writers and other categories of investors.

And of course, all of this information needs to be put into context with where the market is trading, what valuations investors are giving stocks, interest rates, the economic cycle and plenty of other data points.

I absolutely love taking in all of this information and coming up with an investment strategy for specific periods. To me, it's like solving a giant puzzle.

It makes me happy that you're checking out different indicators like sentiment levels.

We'll have to cover more information about these indicators in future Rich Retirement Letter alerts.

That's all for today. But please keep the feedback coming!

I'd love it if you took a few minutes this weekend to shoot me a question — or just check in and say hello!

Here's to living a Rich Retirement!

Zach Scheidt
Editor, Rich Retirement Letter
RichRetirementFeedback@StPaulResearch.com