Financial Model Blog

Know who holds the crown - Mobile App or Website

Know who takes the crown - the app or website

A battle to the finish

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We all carry a smart phone by now - or at least most of us. There are a growing number of retired clients of ours who are new to the smart phone space. For years they fought it and went with a pre-paid, but now they're indulging in the luxuries of having access to a multitude of things at their fingertips.

 

So, what's the big difference between a website or a fancy new app? They typically offer the same stuff and it can be hard to see the advantages on the surface. Many times the mobile apps don't actually give you as much access or range of functionality. At first, the app sounds like a clunky, water downed version of a fully immersive website with all the bells and whistles you'd expect from that fancy Cadillac. There's more to the debate than meets the eye and those of us who have embraced apps as a way to stay connected and efficient, understand their purpose.

 

For starters, mobile apps offer much better personalization. This can be done based on interests, location, behavior and even more. The apps allow users to establish preferences when you set things up. A website is static and NOT typically customized for each individual client or consumer.

 

Then there's notifications and how they're being sent to its users. In the past email was a great way to communicate with users of a site, but some have overused or abused it and its lost some of its effectiveness. Notifications from a mobile app can be tweaked by users to allow for push, in-app or even emails. This gives the user control over how and what they want to get notices for.

 

Using a mobile web browsers to access a companies website can be a bit challenging even with the largest smart phones. It's a funny thing how trends change over time. In the past phones were on mission to build the smallest phones that could easily fit inside a pocket or jacket. They folded in half, were mainly used for calls then graduated to texting and web browsing. The apps of today provide its users one main thing - access with convenience.

 

 

Why blog about an app versus a website and who cares? Although most of our younger clientele have downloaded our app and use it often; many don't even know one exists. It's a fast and easy way to access your accounts with various ways to securely log into your account. Additional features are being added all the time, but the app exists today. We have it available and ready for download now!

 

Remote deposit, statements, tax forms, biometric log in, performance, announcements and letters are on their way. If you want to know more about our app and begin using it - reach out to your Monarch advisor or schedule a meeting with me to become a new client and explore all the benefits we have to offer.

 

In terms of a champ - it's not a winner take all but more of a preference. Each has its place in keeping tabs on your investments, performance, statements, communication or anything else financial. More robust options exist on a website, but you always have your phone on you with the ability to quickly take a look at things on the fly. We think both are essential to maintain efficiency and remain active in pursuing your financial goals.

Want to learn more? Follow our latest market commentary, firm updates, or anything financial via our blog or Podcast.

 

 

 

 

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Gender Distinction in Planning

Published November 15th, 2021 by Monarch Wealth Management

Travel Right Now

Published September 15th, 2021 by Constantine J Kitrinos, CPFA

Travel Right Now

Navigating the industry, sector, and stocks

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It's about time we all treated ourselves to a little getaway, but how do things look in this new world we live in? We'll take a look at different aspects of the travel industry, exam some changes, and explore areas of the market we may see an impact on revenue and perhaps share price over time.

 

There are a few different elements to pick apart in this sector so I'll divide these into a multi-blog where we cover each segment with detail. When it comes to the backend bookings of hotels, air, bus, car rentals, and vacation rentals, there are several stocks and ETFs that can be used to place wagers on how they'll fare. There's too much to cover on the stock market front in the travel section to be covered in this blog, but it'll be covered in more detail in our podcast and Roch Bottom technical analysis blog.

 

I think it's important to consider how you book and why you choose one way versus another. What I mean here is, some use an Expedia or TripAdvisor to book, others put together a Frankenstein itinerary and then there are the trusty Travel Agencies. These days it's all about convenience and instant gratification so most people want to be able to book their trip in minutes from their mobile phones. Because last year's pandemic put immense stress on airlines, cruise ships, and just about anything related to travel and tourism, it makes even more sense to use a travel agent to book all your travel. There's nothing wrong with booking things on your own until there is.

 

 

 

Here are a few reasons why I think it's crucial to your vacation and your wallet to book your trips with a partner you can trust:

 

  1. Knowledge - Travel agents do this for a living, book multiple trips a day, and know things about the area you're visiting. Chances are they've been there or had a colleague or client go there in the past so they get it. They're going to give you the details you want to know and be able to answers questions about specifics.

  2. Pricing - In most cases a travel agent can get the same or better pricing for your trip. A misconception is they charge hourly fees or planning fees on top of your travel costs - not true. It has never cost me a penny more (although I would gladly pay more) to book any travel. Their compensation is driven by the travel partners like hotels etc. who pay them directly.

  3. Bonus Miles - You might even have a booking promo or bonus miles codes that could be applied by your agent. You'll never miss out on those precious airline miles or hotel points!

  4. Ease - Call your agent, provide them the details of what you're trying to book, and voila, the research begins. They'll populate y, our frequent flyer numbers, hotel rewards, or any other program you're affiliated with. Any o,f your concerns for price, travel dates or layovers is handled.

  5. Hiccups - If you travel a lot you know great things don't always go according to plan. Weather, transportation, and other factors play a role in how your vacation, starts or ends. It's great to have boots on the ground fighting your fight to get the things you paid for. I can tell you from experience, it could cost hours or even days of your vacation, trying to argue and fix problems with tour operators, airline rescheduling, or hotel blunders. Not fun! A travel agent will do, all of this for you so you enjoy your vacation.

 

Our trusted travel guru has been and continues to be Natalie Fichera from NJF Travel. If you have your travel agent, fantastic, but if not, give Natalie a look and let her know I sent you.

Travel Planning at its Finest

 

 

And that's only the beginning...Reach out and schedule a consultation to discuss your situation. We'll walk you through your options and help you make the right choice for your goals.

Request a Meeting Here

 

Want to learn more? Follow our latest market commentary, firm updates, or anything financial via our blog or Podcast.

 

 

 

 

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Bliss or Blunder

What dreams are made of

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This has got to be the year for weddings. Because the world basically shut down in 2021 a lot of brides were left at the altar with very few options. Some eloped or did something small and others opted to push off until this year. We personally have three weddings to attend this year and one already on the calendar for next year. I'm hearing from more and more friends who also seem to have more weddings to attend than the norm.

 

As a partner of an investment firm, it's hard not to consider the finances behind any event we attend. We're noticing a number of changes in the weddings we've been to and ones planned in the near future. For starters, weddings are smaller. This can vary quite a bit depending on the state, county, or even venue. Brides to be are making tough decisions on cutting kids or distant relatives off the invite list to accommodate venues and other COVID-related restrictions. Some have requested mask-wearing regardless of vaccination and others are more liberal. Remember that open bar all night long? Well, some have agreed to convert the open flood gates of the all-inclusive drinks into a cash bar for some or all of the events. The length of weddings seems to be shorter as well. Almost, short, sweet, and to the point. The pandemic has forced restaurants and bars to close earlier so that plays into the way they offer an open bar and how late they can serve.

 

How does the cost vs offering compare year to year? According to Business Insider, the average cost of a wedding this year versus last is up about twenty percent. The number for that hefty bill rings the register at $22,500. Those figures take into account the smaller headcount, fewer hours for the event, and reduced hours of an open bar. Despite cutting guests, altering food and beverage offerings, and taking some of the glitz & glam off the table, the cost for just about everything is up! For the weddings that went on last year, they were one of the lowest cost for celebration we've seen in years. Venues, caterers, and photographers were begging for business. They were pleased to have anything on the books. If we glance back to 2016, it was the highest spend for a wedding coming in just north of $35,000.

 

Source: www.theknot.com

All in all, any one of these years is a huge amount of money for an event that lasts 5-7 hours. When you do the math and break that down per hour for a 7 hr event, you're looking at $3,750 an hour! It's no surprise that these events grab big price tags and parents and newlyweds who are more than willing to shell out the cash. These are moments that you'll cherish for years to come and who better to spend it with than your closest friends and family.

 

The night is over, the music dies down and the bright lights come on. Traditionally it was the bride's parents and family who squares up and pays the bill, but that's another thing that's been changing over time. We're hearing more and more that it's a three-way split. Both sets of parents and the bride and groom and paying portions of the event. With a big-ticket item like a wedding, that only seems appropriate. It also adds a layer of complexity when it comes to what portion of the event each party pays for. It might mean inviting cousin Eddie because Mom is chipping in a good portion of dough and remains adamant that he has to get an invite.

 

 

Are there things that could be more beneficial for the bride and groom than a $22,000 wedding event that lasts a few hours? Sure, there are other places to put that money to work that would better position the couple like paying down debt, investing, adding to their savings, or a down payment on a house. Speaking from experience, money is NOT everything! There are some things you just can't put a price tag on. One of them being wealth management, the other being a wedding! Lol.  Happy Wife, Happy Life does ring true.

 

On the topic of weddings, my wife and I celebrated our 9th anniversary earlier this summer. The cost of our wedding that long ago was about the same as the cost today. We chose to do a non-traditional destination wedding. For some that makes a ton of sense for others, it brings on a layer of complexity and frustration - especially because of masking, the pandemic, and the latest delta variant. Below are a couple of pictures from our wedding day and the festivities. I cannot believe how time flies, but that is a day we'll remember forever!

 

 

 

And that's only the beginning...Reach out and schedule a consultation to discuss your situation. We'll walk you through your options and help you make the right choice for your goals.

Request a Meeting Here

Want to learn more? Follow our latest market commentary, firm updates, or anything financial via our blog or Podcast.

 

 

 

 

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Bonus Money | Child Tax Credit | Confusion

Take now or forever hold your piece

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By now those of you who are reading this have received at least one advance payment of the child tax credit. That's great, or is it? There was some confusion on this among friends, family, and clients and we hope to get some clarity on this for you.

 

If you're eligible to claim the child tax credit you would have received a letter from the white house outlining both an enhancement to the amount and the way it's being paid this year. For the remainder of 2021, the IRS has auto-enrolled everyone eligible into an advanced payment of up to half of the eligible amount. There's really no right or wrong way to do this, but I think it's more important to dive into the details to truly understand what this money is and what it's not.

 

First off, this is NOT a monthly "Bonus" check as some were referring it to. It is not itself any more than you're actually entitled to so don't get too excited. One thing to note is that the credit has changed from the tax year 2020 to 2021 so the amount of the credit overall should be worth more depending on your household, tax filing, and situation. According to whitehouse.gov, the credit was increased by $1,000 for each child over the age of six and $1,600 for each child six and under. They also went on to expand the age limit from 16 to 17. These changes were a part of the American Rescue Plan and many families will appreciate the additional help.

 

We mentioned that everyone was auto-enrolled in the advanced payment, but what if you prefer getting them at the end of the year when filing your returns? Well, that will require a little bit of elbow grease. You'll want to visit the irs.gov website and click on the blue "Manage Payments" button. Here is where you can elect against receiving your advance payment of half of your eligible child tax credit.

 

Now, if you're married, there's one more step. You'll need to also do the same for your spouse. If you fail to take this step, you'll continue to receive a quarter of the credit unless you do the same for your spouse. Here's the tricky part, if your spouse doesn't already have an account with the IRS (the case with my family) you'll find yourself creating an account with id.me which is a bit detailed. It requires a scan of the front and back of their driver's license, a video and picture as well as email verification and a slew of typical profile questions like date of birth, social security #, etc. Below is a screenshot of the first step to getting you started in requested to opt-out of the monthly checks for the rest of the year.

 

So who cares if you get paid monthly or at the end of the year? Great questions - there's no difference in the amount. The concern I see is the families that depend on or expect that huge refund check at the end of the year. When the first checks were mailed out in July, some people thought this was an added benefit or "bonus" check. Like a "Christmas in July" type of deal. The people who I can invasion being disappointed or left with the short end of the stick are those who didn't quite understand what the checks were for. At the end of the year when their refund is much smaller or they potentially owe money, they'll be in for a rude awakening and the money will already be gone.

 

All things considered, this shouldn't be much of an event given a few things that are happening:

 

  1. Advanced payments are for half the credit

  2. Child Tax Credit has increased

  3. The eligible age has increased

  4. You have the option to opt-op

 

All in all the monthly checks are probably a good thing for most families. It's not a life-changing event by any means and it would be something realized at tax time anyway. More money in the pockets of American families throughout the rest of the year might be a good way to buffer additional impacts on jobs, the economy, and a number of other economic dilemma's were currently dealing with. With that being said, my only gripe is the way it was rolled out. Perhaps a request to enroll versus an auto-enrollment would have been better; considering the hoops to jump through to request the checks to stop.

 

Advanced payments are one topic we discuss on our latest #PennyWiseFinancial #Podcast. Take a listen below.

 

 

And that's only the beginning...Reach out and schedule a consultation to discuss your situation. We'll walk you through your options and help you make the right choice for your goals.

Request a Meeting Here

Want to learn more? Follow our latest market commentary, firm updates, or anything financial via our blog or Podcast.

 

 

 

 

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How to think about August & September

Depending on how you see things, Trouble or Opportunity could be lurking

A look around the corner

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As the adage of sell in May goes, there is some data that shows the months of August and September could see markets slide a bit. Although history tends to repeat itself, there's isn't compelling evidence that you should liquidate half or all of your investments just before these months.

 

So what happens in these months? Kids are back to school, summer is over, traveling slows and it's back to business for the adults. This also marks the tail end of the third quarter and the beginning of Q4. Corporate earnings give a clearer picture of how companies and stocks should perform throughout the remainder of the year. So, let's take a look at a chart from LPL research to get a feel for what might be to come.

 

 

There's no denying the charts do have good evidence that the upcoming months could take a slight dip; especially in the post-election years. So here's how we are addressing this setup and the potential for a 5 - 10% dip.

  • Review of the current holdings

  • Take inventory of the market as a whole and momentum

  • Factor in any potential tax law changes

  • Consider earnings and sector-specific concerns

  • Avoid major cash raises

  • Adjust and make minor tweaks to ensure positioning

In a similar fashion to the way we stood up to the summer sell-off headline, we believe there is still room for the market gains to continue. There are some areas of the market that remain overvalued and we have been enjoying those gains, but it will be a time to consider taking more profits. Not to get specific on a segment of the market that looks, but don't be surprised to see additional exposure into more value stock exposure. They pay dividends, have less volatility, and are much, much cheaper than some of the red hot growth stocks.

 

Again, this should come as no surprise to you that we're taking a careful approach to rebalancing or tweaking of our inventory. Attempting to shift and chase areas of the market that have performed well in the past doesn't guarantee that it will continue. We continue to research, listen to earnings calls, review the research reports and make sense of it all. With the data, we integrate into our systems and make decisions that we think will prove beneficial for our clients.

 

 

We view this as an opportunity; not pain. It's a time to adjust, make changes and look forward to seeing how those changes play into your portfolio performance. The other part of the chart does show quite a bit of promise as we near the end of the year. Again, one could look at the near-term pessimism and worry about looming fears of the delta variant and an expensive market that may be running out of steam. At this point in time, we don't believe the pessimistic view is the way to position yourself or your portfolio.

 

And that's only the beginning...Reach out and schedule a consultation to discuss your situation. We'll walk you through your options and help you make the right choice for your goals.

Request a Meeting Here

 

Want to learn more? Follow our latest market commentary, firm updates, or anything financial via our blog or Podcast.

 

 

 

 

Listen on your favorite platform:

        

 

Say When

Know when to get help

 

 

We get this question tons and tons of times. When should I get help from a planner, money manager, or financial advisor, and what's the difference between them? Should I wait until I have about a million or two to get help? We'll touch on these and hope to give you more clarity and understanding on what be right for you.

 

First and foremost, it's never too early or too late to get help. Of course, if it's the latter, we may have limited options. As far as too early, well, I'm not so sure that exists. At times we get prospects sent to us from existing clients, friends, colleagues, etc. who might be younger and think they're hopeless because they don't meet firm minimums, etc. The fact is, if there's not much we can do to manage the assets right now, there are still small behavioral shifts that can be tweaked to get them set up for success. Think about building a foundation, a roadmap, a blueprint for your future financial picture will look like.

 

Far too often we see just the opposite. A prospect schedules a meeting, has ample assets but has done no planning. Throwing money into your 401(k), keeping cash stashed in the ashtray or under the mattress is not exactly giving you the kind of insight you need to know if you're on track, off track, or don't even know where the track is. If you can't see a target, how do you know how close you are? You don't!

 

A good sign is a trend we've been seeing as of late. More and more often we're seeing younger clients scheduling a meeting to be sure they're doing all the right activities, putting their money in all the right places, and have the protection in place to keep their family safe. These meetings are more like a strategy session and involve more conceptual planning and looking at the entire picture. It's this newest generation of early planners that will fair the best when it comes to retirement. Just a little bit of work upfront can go a long way.

 

Some of the points we touch on in the early phases of planning are:

  1. Budgeting

  2. Where and how to save

  3. Estate Plan

  4. Health Insurance

  5. Life Insurance Protection

  6. Risk tolerance

  7. Objectives

  8. Goals

  9. Time Horizon

Like anything else in life, the sooner you identify what you want and plan for it, the better off you are. The trend seems to be sooner and more frequent than the generation prior. The "Baby Boomers" tended to work hard, stay loyal and rely on a company pension and social security to fund most, if not all of their retirement.

 

So what about the other end of the spectrum? When we have prospects schedule a meeting and they're entering or already in retirement. Well, those can go well, but chances are, they're scheduling a meeting for a reason - and it's not usually good. Let's face it, asking for help when it comes to finances is typically causational; meaning, you ask for help at the last minute - when you absolutely need it!

 

By all means, asking for help, even later in life can help. We've been able to help clients with late-stage planning. There may be tax savings, income security, or asset management that make a world of difference for these folks. It could also be along the lines of asset protection, survivor benefits, or estate planning. We all work hard throughout our lifetime and you certainly don't want to goof things up when you've actually accumulated the money and "stuff" you've always dreamed of.

 

 

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I get asked quite often from prospects or people not familiar with the firm; what do you have for sale? The answer is nothing. There are no product shelves filled with goods on the verge of going stale. No sales targets, gimmicks, or firm thresholds to meet. We are consultative and thrive only when clients remain clients; forever. In fact, we hope you're so thrilled with our services you never want to leave and hopefully brag about us to your friends and family. There are no commitments or penalties if you feel the need to sever your relationship with the firm. We are owners, care about our clients, and have no moves to make up the corporate ladder. The fact is, we're already at the top and fortunate to have loyal clients that continue to hire us throughout their lifetime.

 

So, schedule an initial consultation, fill out our new client application, and learn more about our process. I assure you there will be some takeaways regardless of where you are in life. We look forward to meeting you soon and wish you well until then.

 

Request a Meeting Here

 

Want more? Follow our latest market commentary, firm updates, or anything financial via our Financial Model Blog, Monarch Insider Newsletter, or PennyWise Financial Podcast.

 

 

 

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Leave it alone or grab the money and run

What to do with that old retirement plan

You may have just changed jobs and not sure what to do with the old retirement plan your employer offered you. There are a ton of people who forget to take control of these funds and leave them as they are. Is that the best decision for you? There are a ton of things you should be thinking about when making that choice. Keep in mind, doing nothing is actually a decision. It's the conscious choice to keep your money invested in the same way you set them up when you started putting money away. That could be six weeks, six months, or even six years ago. I bet a ton has changed in any of those scenarios. I have yet to find a plan that is perfectly crafted, has the right fund lineup or flexibility to make the most of your money. Even if the plan score is decent, who knows what the investment menu will look like in the next several years. The last thing you want is multiple sites to log into, forget about the account, ignore it and not play an active role in your investment choices. Is it easier to just leave it alone and do nothing? Heck yeah, but easier doesn't always mean better.

 

One thing a lot of people don't know is all the options they actually have when you change jobs, retire or reach an age when your plan allows for what is called an in-service rollover. Let's take a deeper dive into those options and what you should be considering when you evaluate so you can make the best choice for you. Below are the options laid out:

  • Do nothing

  • Roll funds into your new employer's 401(k)

  • Roll funds into an IRA

  • Cash-out

 

Keep in mind, making the wrong choice could potentially force you to work years longer than necessary to afford the retirement you've dreamed of.

The downfalls to avoid

You'll want to know what to watch out for if you ever want to get to your retirement goals.

If you truly want to retire as soon as you possibly can, there are a few obvious things to avoid. Investments that don't perform up to expectations, owning the wrong things, and nose-bleed fees. Skipping past those mistakes can help you grow your retirement bank quicker, with more efficiency, and result in a bigger balance when you're ready to start income.

  1. Investments that just don't make the cut - 401(k) and IRA investments fall into two fundamental types – active funds and index funds. Active funds are just that - active. They attempt to outperform a benchmark (e.g., S&P, Dow, etc.) by making active trades in the account to avoid a downturn or to capitalize on an upswing. Index funds will simply try to match an index. Now - there's no clear winner with those basic types of investments, but one that doesn't meet similar funds trying to do the same thing is considered an underperforming investment. Numerous studies have been done to compare the type of management and their performance. The results show most, but NOT all active funds fit the bill.

  2. Wrong things to own – Allocating your money into a diversified portfolio is a strategy that attempts to help with the balancing act. It's the balance between risk and rewards and it can be difficult to do consistently over a long period of time. It may be tempting to jump into the hottest stock sector or style, but having the right amount of balance is important. If you don't maintain discipline and control, you could miss out on gains or fall victim to unrecoverable losses if you're too aggressive.

  3. Fees, fees, fees – Retirement plans like your 401(k), 403(b), 457 and IRA providers charge you fees to administer your account. It's typical for the charges to be deducted on a quarterly or annual basis. Most of the IRA fees are very transparent, easy to find, and something that can be reviewed with your advisor directly. Employer-sponsored plans may be a little less straightforward retirement.

 

What to look for in Features you actually want These are the things you should focus on to lessen any pitfalls in your retirement plan:

  1. Gains – Although most actively managed funds can fit the bill, some studies show that a passive portfolio may outperform active funds after the fees are deducted. Keep in mind, all funds are NOT created equally and this isn't an idea that passive always better than active or visa-versa. Some of the lowest cost providers are the big names like Vanguard and Schwab which tend you have many good choices. They don't always score at the top of ranks so don't fall in love with any single fund family or manager.

  2. The help you deserve - To make sure you follow a plan, stay focused, remain disciplined, and don't fall victim to making decisions based on fear or greed; get help from an expert. You will want professional investment advice to help you navigate the investment landscape and make decisions with your hard-earned money. The right advisor will help you maintain an appropriate allocation, look for opportunities in various sectors or asset classes and give you peace of mind in uncertain times. Various Vanguard studies have shown an advisor can add an average of 3%+ a year in value by helping to avoid poor investment decisions.

  3. Low, low, fees – It's the admin fees that will lower your investment returns dollar-for-dollar. If there is a plan or platform your advisor can use to keep those admin fees low, the better off you'll be. Despite finding ways to get the most value on those fees, they are inescapable because the providers have costs to provide custody, reporting, technology, etc for your account.

 

And that's only the beginning...Reach out and schedule a consultation to discuss your situation. We'll walk you through your options and help you make the right choice for your goals.

Request a Meeting Here

 

Want to learn more? Follow our latest market commentary, firm updates, or anything financial via our blog or Podcast.

 

 

 

 

Listen on your favorite platform:

        

 

Double-Digit Returns

Photo by Sammy Williams on Unsplash

Double-digit returns are great unless they're being paid out to someone other than your own account.  What do we mean here?  Had a look at your health insurance premiums lately?  Although we're mid-way through the year you can expect to receive the annual notice of the proposed premium rate change.  I've voiced concerns about the rising costs of healthcare for some time now and it doesn't appear to be slowing much at all.  When you're premiums for insurance are more than your mortgage, you know there's a problem.  

Supposedly inflation is non-existent right now even though the costs of goods and services are on the move.  Gas prices are one of the things we often keep an eye on and I've seen them go up around 30% in the past 4 months.  Yikes!  What about other areas in the economy where prices are going up - many in the double digits!  Energy, healthcare, college tuition, food, lumber, raw materials, and services are things we want to keep an eye on. 

How about these eye-popping health insurance premium increases:

  • 2016 - 7.1% 
  • 2017 - 16.6% 
  • 2018 - 13.9% 
  • 2019 - 8.6% 
  • 2020 - 6.8% 
  • 2021 - 1.8% 

*Source healthinsurance.org | More detail and article found --> Here

What can you do about your own health insurance and what are your options?  You'll definitely want to reach out to your HR department if your employer offers different types of coverage or an insurance broker to help guide you and give you all the insight that's specific to your situation.  If you don't have an insurance broker or don't know where to find one, consider Optima Benefits & Payroll.  

There are so many different types of insurance or alternatives that you might not know.  Things like HDHPs (High-deductible Health Plans) paired with a Health Savings Account or even cost-sharing plans.  I personally couple my HDHP plan with an HSA and it works extremely well for our needs.  Using this strategy, we're a healthy family with limited visits to the doctors other than routine visits and wellness checkups.  None of my family is on expensive medication or has pre-existing conditions that require regular screening or preventative measures so this is a very efficient way to get the coverage we need with flexibility.   

Health Savings Accounts (HSA's) offer a ton of benefits for the right families and individuals.  They offer a robust system to allow for tax-deductible contributions, tax-deferred growth, and tax-free distribution when used for covered items or services.  I've been able to help tons of people invest and grow their HSA's after they've made the decision that an HDHP is the right choice.  You can learn more about various insurance alternatives --> HERE

Request a Meeting Here

 

Want to learn more? Follow our latest market commentary, firm updates, or anything financial via our blog or Podcast.

 

 

 

 

Listen on your favorite platform:

        

 

Danger Ahead

Photo by Ashim D’Silva on Unsplash

Danger ahead or does the party continue?  Despite political unrest, chaos in the streets, high unemployment, looming inflation, and concerns about a return to normalcy, the market has been kind to us.  That does assume that we have been invested the entire time and not made a knee-jerk reaction to the unprecedented events that unraveled in the past year.  Does that mean that all of us have done just that? No - of course not!  Recently, we have been meeting with potential clients who have allowed their nerves to get the better of them.  After losing around 30% in March/April, they sold investments and remained anxiously waiting in a cash position.  Looking back now does nothing good for those in the camp that the sky was falling.  With that said, how does that create a learning narrative and impact decisions moving forward?  A logical question you may be thinking about even if you were invested the entire time. 

Danger ahead?  Well, maybe - but what does that actually mean, and how does it impact your overall investment philosophy?  The reality is, nobody truly knows when the market will "correct" or go into bear market territory.  We are NOT "Perma-Bulls" by any means, but that doesn't mean that we would ever recommend going 100% to cash.  In our 25+ years of combined experience, we have yet to see that strategy pan out.  The market is fickle.  It has no feelings, doesn't know how to tell time, and doesn't care about year-to-date performance.  It can be your best friend and your worst enemy; many times over a short period of time.  At some point valuations will matter.  That's right, earnings, cash flow, balance sheet, and future sales potential will come into focus.  

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Attempts to be a hero and avoid market crashes can be a costly novice mistake.  Possibly the worst investment at this current point in time is cash.  So, does this mean that you should do nothing, remain invested the entire time, and become an innocent bystander as your account gets slaughtered?  In short, no!  Not at all.  Keep in mind the stock market has two ends of any trade.  There is always someone making money whether the market is going up or down.  Finding areas of the market that appear to be undervalued or provide potential upside is our job.  It's literally what we are paid to do each and every day.  

Is there anything you can do to protect your income or principal?  Of course, there is, but that comes with a number of follow-up questions and trade-offs with respect to capping your overall return or tying up your capital for a given period of time.  We have ways to hedge against loss, speculate in certain sectors, or even provide defined downside protection.  Yes, it's true - there are things you can do to help protect against loss.  That in itself is a lengthy discussion and can be done in many ways that are specific to each individual.  The point is that you can and should be taking action if it's imperative to meet your needs, goals, and comfort.  In many cases, active management and diversification will tackle those challenges and mitigate your willingness to make a foolish decision.   

Berkshire Hathaway Chairman and CEO Warren Buffett  GETTY IMAGES

What are the "experts" saying about the market right now?  We cannot ignore the insights from the Oracle of Omaha, Warren Buffet, and his often candid commentary on the market.  In the latest article citing Mr. Buffet, (FOUND HERE) his market indicator reveals that prices are expensive and a correction may be around the corner.  Like most of us, logic, rationality, and common sense don't always line up with market returns.  The market knows no time.  As the Oracle has mentioned in other articles, "...They are dancing in a room in which the clocks have no hands" (FOUND HERE).  

The quote is from 2000 and has relevance over 21 years later.  The question shouldn't be "if" the market is going to crash, but "when"?  It will happen and you will see your account value drop.  Market cycles are a natural thing that reigns in pricing that has run up a little too far ahead of itself.  If you've been investing in the past two decades you would have experienced full market cycles that bring down account values and create opportunities.  Stocks become a moving target that requires discipline, strategy, and nerves of steel.  We watch the markets tick by tick, hour by hour and it's something we don't recommend for the average investor.  The number of emotions that can run through your head during the course of a day can be astounding.  

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Investing is a journey.  This is NOT a sprint and shouldn't be treated as such.  It's something we hope to be a part of and provide you guidance, knowledge, support, and disciplined strategies as we navigate through inefficiencies of the market.  We remain diligent and active in our approach to money management and believe this will aid you in the pursuit of your goals.  Although we are not market timers, don't employ leverage, or take on high-risk "bets", we do what we can to protect on the downside and seize opportunities when they present themselves.  If you are new to our firm or investing, the one thing we can guarantee is that the market will go up and down.  It's not a one-way street and that has to be embraced.  Long-time clients of ours know and understand this.  We communicate our strategies and rationale in the most difficult of times; the times when most money managers do not want to meet or discuss things.  

If you have money to put to work, a looming market correction should not impair your goals.  It might mean the type of investments selected are different when things of yesteryear are no longer relevant and change is around the corner.  We have a number of headwinds that will work to combat market appreciation and there will always be hints of a catalyst to move the market higher.  Remain focused on your goals and we will help work towards achieving those outcomes. Consider our firm as a true partner in your overall journey we call life. 

 

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Disclaimer: The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Some of this material was developed and produced by Basch Solutions to provide information on a topic that may be of interest. Basch Solutions is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.

Securities offered through LPL Financial, Member FINRA & SIPC. Investment advice offered through Private Advisor Group, a Registered Investment Advisor.

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