Historically speaking, election years tend to be positive in terms of stock market performance. And this election year is holding true to historical patterns, so far. But this may be entirely coincidental and not reflective of any real or direct impact that elections have on stock prices. If you think about it, correlation of elections to company profits and/or growth does not equal causation.
When the topic of concentration risk comes up in portfolio management, normally folks think about the possibility of holding a large individual stock position in their account. We recently ran into a situation with a planning client who inherited concentrated stock positions from a family member. The client wished to memorialize their loved one by holding onto these stocks. Another way concentration may occur is when a client works in a particular industry and feel they have a pulse on the companies in that industry.
We are seeing more and more clients with children or grandchildren who have special needs. Adapting to life with special needs or a disability is never easy, but there are steps that can be taken for those individuals to achieve greater financial security and independence.
When planning for retirement, we often focus on the accumulation phase: saving diligently and investing wisely. We spend 40 or more years of our lives focused on building the proverbial “nest egg,” but after retirement, things change and so should our financial focus.
How much do you like the rewards you get from your credit cards? Are they worth any additional costs to your purchases? These are questions to consider as the Credit Card Competition Act is reintroduced to Congress, after failing to pass in 2022. The Credit Card Competition Act would require banks of a certain size to give merchants more choices when it comes to which payment network can be used for processing credit card transactions. If passed into law, this bill could result in reduced benefits for credit card rewards programs.
The definition of retirement in the Merriam-Webster dictionary is as follows, “withdrawal from one’s position or occupation or from active working life.” I find this definition rather vague. If I was to define retirement, I would describe it as having the option to not work full-time if one chooses. As a CFP®professional, I look at retirement from a financial perspective, yet have expanded my view to include evaluating lifestyle. I see too many people retire who don’t know what to do with themselves, or find their health declining, or worry that their money won’t last.
In what can only be described as my personal mid-life crisis, we are in the middle of a whole home renovation that has us displaced for up to six months and wondering what we were thinking. Nevertheless, the house has been through the demo phase and is starting in on the rebuild phase as I write this. Our home is not getting any bigger, but she is getting a much-needed update and freshening. For another perspective on the home renovation topic, see Jonathan Stolz’s blog post.
I always find it instructive when we ask clients a few questions to assess risk tolerance, something that is not an easy task given the emotions attached to investment dollars. One question is how much of a loss you would be willing to accept in a one-year period. A lot of people pick 0-5%, but some are more realistic and pick 15-20%. Historically, you would need to have an equity investment allocation of 50% or lower to avoid larger one-year losses.
Recently, we worked with a client with an aging mother living in the United States but who has health benefits in a different country. One of the client’s concerns was having to cover a potential health bill for his mother because the family would prefer she seek care in the United States rather than go back to her country to use her government issued health care.
We’re in the midst of an election year that, according to polling, very few Americans are excited about. Those seeking relief from political debate will need to wait to the end of 2025 and perhaps beyond thanks to the expected political battle over the expiration of the 2017 Tax Cut and Jobs Act (TCJA)1, which sunsets on December 31, 2025.
In this installment of financial planning basics articles, we discuss an aspect of setting up and managing your 401k account that a lot of people ignore or don’t put a lot of thought into – beneficiary designations.
It can be nerve-racking investing at all-time highs in the stock market. Should it be? The data says no.