Roth IRA’s are a fantastic, tax-efficient way to save for retirement, but the rules around who can contribute, and how much, are complicated.Read More
David Edwards, President of Heron Wealth and a graduate of the Hamilton College Class of '83, gave a presentation to current students on how to invest after college, and also gave career tips for those students interested in careers in wealth management.Read More
With a new year comes a new to-do list. If purchasing life, disability or long term care insurance is one of your resolutions for 2019, we can help! Here are our five tips to ensure that you (and your clients) are finding the best possible options and prices.Read More
A long time client writes, “No capital gifts this year. Seeing a Dow that is falling like a stone, day after day, does not inspire me. It is acting like 2008 and the economy could not be more polar opposite from 2008.”
Exactly! Yet, US and international stock market performance is the worst since 11 years ago during the 2008-9 financial crisis.
What we are doing right now?
Any client that depends on their portfolio for their monthly draw will receive their regular payout January 2nd and throughout 2019. Clients with draws have a year’s worth of cash in money market securities, and 4 years of cash in bonds. These clients can survive a 5 year drought in equity market returns without a negative impact on their lifestyle, just as we saw back in 2008-9
We are not selling ANYTHING this week. About 4 weeks ago, we harvested tax losses in any households with at least $50K in realized gains so far in 2018. Those funds are sitting in cash, and will be reinvested shortly as soon as the “wash sale” period expires.
We also decided to eliminate the 5% allocation to commodities (oil and gas, metals, foodstuffs) that we have maintained for many years. Commodity prices could not stay up when the world economy was booming due to ever more efficient production, and with the world in a slump, prices only look down for a while. Those funds are still in cash.
Of the many families who came on board since June, our general plan was to invest 1/3 of their stock allocation immediately, 1/3 if prices declined 10% and the remaining 1/3 if stock prices declined 20%. If prices did not decline, we would just scale in after 6 and 12 months. Following this plan we invested a lot of money on December 3rd, thinking stocks were already 5% undervalued and that the traditional “Santa” rally would soon be upon us. However, as December progressed, investors following events in Washington freaked out and dumped stocks wholesale.
For clients whose retirement is still a few years in the future, don’t worry. Our “all-weather” investment strategy assumes that bear markets can and will occur, and yet your retirement will be fine. Indeed, if you have cash on the sidelines, now is a great time to put that cash to work
At any given time in your life you may find yourself with a sudden windfall. Perhaps you've inherited money or a stock portfolio after a relative passed away. Or maybe you have built a successful business over the years that you were able to sell. So what to do with all that money? Read on to find out more.Read More
There is a lot more to successfully managing your investment accounts than you may think. Read on for two things you probably do for which it would be beneficial to get some help from the pro's.Read More
A new client writes, “So . . . why should I not sell all the stocks I still have a profit in?”
That is a reasonable question. From the September 20th all-time high, the major averages have taken quite a pounding.
The S&P 500 is down 10.5% from its record high, while the NASDAQ is down 14.7%. The FAANG stocks are in bear market territory, down an average of 22.5%.
How can this be, when the US economy is doing so well? For example, Consumer Confidence is at the highest level since right before the 9/11 terrorist attack, and at the second highest level since measurements began in 1967.
Business confidence is at the highest level since 1983.
The US Unemployment rate is at the lowest level since 1968, with a record 157 million Americans employed full-time. The participation rate, at 62.9%, remains below the record level of 67.2%, which prevailed around 2000, which means that at least 10 million additional Americans could be working, but are not. Despite relatively stagnant wage gains, US Real Median Household income is at a record $62K/year.
Company earnings for Q3 2018 were up 25.6% on an 8.4% increase of revenues (a record level.) 79% of companies beat estimates. Thanks to the tax cut, US corporations are swamped with cash and have already used $1 trillion to buy back stock.
So nothing but good news, right? Yet this is the second time this year we’ve seen a 10% or more sell off. What do stock traders know that average Americans don’t know?
A friend approached me with an investment opportunity and I would like to know if it sounds legitimate. It involves investing in a company that engages in proprietary trading of international currency, by being a lender to the company. The company guarantees 12 percent or 25 percent of the spread, whichever is greater. As a lender, you are given a 90-day perpetual note that automatically renews. If you choose, you can call in the note at any time, at which time it reverts to a 90-day note. At the end of 90 days you can get all of your money back. If you want to, you can take out any interest you've earned each month. You can view how much interest has been deposited into your account on a daily and monthly basis. You can also participate by rolling over existing IRA accounts to a self-directed IRA company. The trading company is regarded as an institutional account and is approved by the IRA company. If you choose, you can have the monthly interest you earn sent back to your account at the IRA company to make other investments. Does this sound like a legitimate investment opportunity?Read More
You've made the decision to whip your financial life into shape and work with a wealth advisor to achieve your goals. Now all you need to do is find a trustworthy advisor who has your best interest at heart. Read on for the four questions to ask before hiring a financial advisor.Read More
Timing the market is not a smart strategy for the average investor. Read on to find out why and also learn about three alternative approaches to investing which will hopefully prevent you from pulling your money out of the market in a panic - which is never a good idea.Read More
We often use this analogy to explain market movements. The stock market is like a massive truck engine block suspended in the air by thousands of piano wires, swaying gently in the breeze.
There’s an elf standing on the block with cutters snipping wires, sometime on this side, sometimes on that side.
As the support shifts, the engine block may twist or swing. Imbalances may build up and reach a catastrophic tipping point. The block jerks suddenly, wires break en masse, the engine rolls violently, tossing the elf off on his ass.
Eventually the oscillations settle down, a new equilibrium is achieved, the elf climbs back on and starts snipping wires again.
An observer standing at the side knows that the longer the elf snips, the more likely a violent adjustment. But the observer never know exactly which severed wire will exceed the tipping point.Read More
This year, we brought on board quite a number of new families, but we've only invested 1/3 to 1/2 of their cash. Why? Because this sharp sell-off, 6% in the major stock market averages over the past 6 days, is exactly what we anticipate when stocks have had a good, long run and valuations are stretched to the high side.Read More
If you have a college bound high school senior in the house, here are some useful tips you should know about filling out the FAFSA form. The application for the 2019-2020 school year is now available as of October 1st. You can also use this estimating tool to get a sense of options without filling out the complete form.Read More
I am 27 years old, single, have no kids, and my student loans are being repaid due to my military service. My only expenses are rent and a small number of bills. I have spent the last year saving and reading financial literature and I want to start investing now. What is the most simple and effective way to do so? Ideally I would like something I put a set amount into each month and it grows over time.Read More
Question: There's a lot of buzz about the next recession. Who knows when it will come, but it will. What smart strategies can I employ now in preparation for a downturn in an economy? What to do, what not to do?Read More