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Large Caps Continue Positive Trend

By Posted on In Trend Updates, Uncategorized

Despite a 6 week long correction, large cap stocks continue to gain new ground. The global slow down, threat of Ebola, protests in Hong Kong, potential Ukraine-Russia conflict, weakening of Europe’s economy and many, many other dark clouds, the US market is finding a way to push forward.

Quartz has a nice piece illustrating the improving US economy

The chart below summarizes some of the key headlines from Reuters over the last few weeks. It helps to put the market in perspective and helps us recall the crisis-du-jour.

sp500

Small Caps Continue to Dance Around the Long Term Trend

By Posted on In Economy, Trend Updates, Uncategorized

With all the discussion of the Fed, the referendum vote in Scotland, the S&P 500 hitting new highs and the IPO for Alibaba, some investors may have lost track of the small caps. They haven’t been so fortunate. Here’s a good article that helps to put this trend into perspective and why it hasn’t seen returns like the S&P 500:

SocGen Warns Small Caps Are Headed For a Big Correction

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How to save over $1 million

By Posted on In Saving, Uncategorized

A young client told me that she wanted to have a million dollars by the time she retired. In her mid-twenties, she has time on her side. By socking away $5,000 every year until she retires, she’ll hit her goal (assuming a 7% annual return). See the blue line.

It would be a much different story if she came to me ten years from now (see the green line).

Bottom line: Start saving early.
Saving

A Wake Up Call: How Not to Deal With an Inheritance.

By Posted on In Retirement, Rule of Thumb, Saving, Uncategorized

The following story offers a great example of what can go wrong when a young, financially inexperienced individual becomes wealthy overnight. This author’s advice at the end is exactly what we recommend to clients in this situation:

  1. Get advice from someone on how to use this new found wealth.
  2. Create a plan. Put it in writing. Understand what these funds will be used for it.
  3. Stick to the plan. Without controlling your budget, you can slowly lose track of the wealth.
  4. Don’t be tempted to rely too much on this wealth. It’s very, very easy and tempting to dip into the inheritance when things get tough. But it’s nearly impossible to rebuild a nest egg has been decimated.

How I Blew a $250,000 Inheritance

You Can’t Predict the Next Black Swan Event

By Posted on In Finding Confidence, Investment Strategies, Rule of Thumb, Uncategorized

What’s wrong with this chart?

Give up? The folks that created the chart are trying to predict the next Black Swan – the next significant event that could derail the economy. The problem is, that by definition, black swan events are unpredictable and exceptionally rare. Much of what’s listed here has been dissected and extensively analyzed. They are serious concerns but may already be baked into the current price of the markets. Just look at how the S&P 500 has responded due to the tensions in Russia and Ukraine

Sometimes the biggest risks are the ones that do not appear on anyone’s Black Swan chart!