Many advisory firms talk about their array of tools and resources. Every firm that is worth talking to
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“Most kitchens have the same spices in the spice rack. That does not mean everyone is a good cook.”
– anonymous
Look for the Federal Reserve Board’s policy statement next Wednesday to help determine whether the inflation crisis ends in a recession. The Federal Reserve is at the tail end of a historic battle against the worst inflation in several decades. The central bank hiked rates seven times since March 2022 and is expected to raise rates again Wednesday, when its policy statement is released at the conclusion of the Federal Open Market Committe..
Investment success hinges largely on getting the answer right to this question: Would you accept 10% less return on stocks annually to experience 40% less volatility than stocks? If so, congratulations! You’re on your way to developing realistic investment expectations. This article is not intended as advice but only to help permanent investors develop expectations about generating retirement income or building enduring family wealth.&nbs..
The Standard & Poor’s 500 surged 1.9% Friday, as super-capitalized tech giants Alphabet and Netflix surged. Tech’s sharp one-day advance is making headlines now but investing in a portfolio for retirement income or for the benefit of the next generation is not about a single day’s return. In an environment in which the media constantly headlines single-day returns, we’re here to help you stay focused on what’s more important: ..
Amid an information explosion, here’s evidence of why investors can trust the financial content presented here weekly. The clipping shown above is from today’s front page of The New York Times. It’s a story about China’s demographic problems. This is a story covered in December 2019 in this space. Here’s what we wrote December 11, 2019 in a weekly financial planning update article entitled, “How Worldwide Demographics Affect Your Port..
If you are unhappy that the bear market is now in its eighth month and that stocks are about 17% lower than their previous high, remember the great paradox of long-term investing: putting up with periodic losses has been a good investment for decades for retirement portfolios and those building wealth for the next generation...
Higher for Longer Strategy When we look back on 2022, we cannot overestimate the damage the fixed-income markets inflicted on investors. Investment grade corporate bonds fell 16%. Long-term treasuries had a total return of -29%. High yield bonds fell 11%. Even very short-term treasuries declined 3%. It was the worst year for fixed-income investors in roughly 40 years. Equity markets also declined sharply. The S&P 500 fell 18% and th..
From March of 2022 through December of 2022, the Fed raised the Fed Funds rate 4.25% (425 basis points). Much of that was a move from a very accommodative economic stance to a less accommodative posture, but as the Fed raised rates to the point where policy was restrictive for economic growth, the market started to sober up. Over the fourth quarter of 2022, some signs of inflation appeared to moderate, and naturally, the market thought that m..
With the bear market turning eight months old on Friday, and stocks 16.6% lower than their previous all-time high on January 3, 2022, it’s wise to remember that putting up with stock volatility has been well worth the risk over the past two decades. The equity risk premium illustrated here shows the reward received annually for tolerating the risk of owning stocks versus owning a risk-free investment. Stocks, as measured by the Standard & P..
With the investment outlook uncertain, as it is almost always, this chart is a reminder that crises have come and gone throughout modern history and $1 invested in the U.S stock market, as measured by the Standard & Poor’s 500 stock index, compounded at an annualized rate of 7% for 65 years ended December 31, 2022. While the stock market’s unpredictable in the near term, don’t let it be a distraction from another important wealth ..
Every month, going back for decades, the Institute of Supply Management has polled purchasing managers from the manufacturing sector and reported their results in an index about business conditions...
Mat discusses why you can't wait for the Fed or the markets to start investing. If you wait for others in the market to give you the "all clear" to invest, you will ultimately miss important market moves. ..
Major changes in financial planning for retirement went into effect January 1st that will dramatically affect Americans of all ages and income levels in 2023 and in the years ahead...
U.S. central bankers are likely to be criticized by historians for not taking inflation serious sooner, but the Federal Open Market Committee’s (FOMC) aggressive policy begun in March 2022 is working, data released Friday morning show. The progress of the United States, despite political discord in Washington, D.C., is notable. The post-pandemic inflation crisis has been managed well enough by the Federal Reserve System to require planning for ..
New rules of retirement financial planning just went into effect. They usher in changes in tax rules affecting Americans of all age and income levels starting in 2023 and thereafter. With nearly 40% of today’s workers financially unprepared for retirement, according to the Center for Retirement Research at Boston College, the changes represent steps by the government to prevent the retirement funding crisis from growing worse. The new ret..
Be glad 2023 is upon us. The stock market closed 2022 with its worst loss since the global financial crisis of 2008. Here’s our final; weekly investment update for 2022. 2022 will be recorded in financial history as the year inflation soared unlike anything experienced since the early 1980s. Consumer buying power shrunk and declined sharply as income levels failed to keep up with price hikes. The Federal Reserve hiked interest r..
Major legislative changes affecting retirement planning are expected to be signed into law by President Biden before the end of the year. The dozens of changes make tax and retirement planning even more complicated but represent substantive steps by the U.S. Government to prevent the retirement funding crisis Americans face from growing worse. The new law, SECURE Act 2.0, expands on the Setting Every Community Up For Reti..
The good news is November data continue to come in strong, but the bad news is that a key forward looking indicator is signaling the economy is about to suddenly lose momentum. Strong economic data for November continued to come in but the forward-looking index of Leading Economic Indicators for the U.S. fell sharply in November, marking its ninth straight monthly decline. First the bad news. The LEI decreased by 1% in November 2022, following a ..
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