“Chloe and Miles grew up between the same bowling bumpers that encouraged risks, inflated confidence, and prevented consequences.” The quote is from “Rock the Boat” by Beck Dorey-Stein. Ever bowled where bumpers are placed in the gutters on each side of the lane? Rolling a gutter ball is not possible. This makes bowling fun for young kids and new bowlers. But, this concept is dangerous in real life – putting up “fake” guardrails to prevent bad outcomes; then when the trouble occurs, extending “forgiveness” without consequences. The same concept can occur in life when we are allowed to enjoy our “kicks.” But when the “bumpers” are removed, unwelcome “kickbacks” can occur. When my boys were growing up they were cautioned, “You can choose your kicks, but you cannot choose your kickbacks.”
Category Archives: Blog Post
Special Market Update & Video – “Here Comes the Sun”
When the Beatles’ manager Brian Epstein died in 1967, the band needed to handle more of their accounting and business affairs. George Harrison disliked these duties. He wrote “Here Comes the Sun” after attending a round of business meetings. The song was inspired by the long winters in England which Harrison thought went on forever.
Double-Barrel Shotgun – May Commentary
The rivalry between the Hatfields and the McCoys is one of the oldest and best-known family feuds in American history. For nearly 50 years, violence between the two families raged over who owned two razor-backed hogs that swam in the Tug River, a valley area between Kentucky and West Virginia. Even though the feud ended in 1891, they finally shook hands in 1976; a truce was signed by the families in June 2003. With a total of 60 deaths between both sides, it’s questionable that either won. The Hatfield-McCoy legend was embellished by a brief love affair between Johnse Hatfield and Rose Anna McCoy. Not sure if it was true or not – as a double-barrel shotgun is seldom able to bring sweet marital bliss!
Special Market Update: “Escalators, Not Elevators”
Why does investing in the stock market feel like taking an escalator up, and riding an elevator down? Rising markets seem to be slow upward climbs, like an escalator; the rise occurs over extended time (months and years). But, a correction or market pullback occurs quickly (days and weeks, or months), like riding an elevator down. It’s quick. It seems to take a year to earn 10% in a rising market, but a few days to lose 10%. The elevator experience is always uncomfortable and creates anxiety. Yes, anxiety for us too as we manage client accounts with great care and effort.
401k Lifetime Income Estimates… Will You Feel More SECURE?
If you are fortunate enough to have a company sponsored 401K plan, you will likely see some new (and potentially confusing) illustrations on your statements in the coming months. The changes are related to the 2019 Secure Act passed by congress. The mandate requires 401k administrators to provide an estimate of “guaranteed lifetime income” assuming your current 401K was completely “annuitized”.
What does it mean to “annuitize” your current 401k balance? Continue reading
Turn! Turn! Turn! – March Commentary
“Geopolitical conflicts and/or exogenous events do more to reinforce trends already in place, rather than act as a catalyst for change (in the markets) – Strategas Research Partners.” Gold is rallying; oil is in a bull run higher; value style is besting growth while Tech is a pronounced underperformer. And Bitcoin –who’s strongest advocates claim it to be an alternative currency – is yet to offer any hedge or stability to risk assets. These trends don’t change (because of geopolitical issues), just the urgency of them. The horror and uncertainty of the Russian/Ukraine invasion is extreme; it is terrible, inappropriate, and immoral. It is most challenging to offer thoughts on how it will play out, as no one knows. We can pray that it is a temporary geopolitical event which will hurt Russians economically, and will slow Germany and Europe economies (to a lesser degree), and will marginally slow other global economies depending on their connections to Russia/Ukraine. At present, the US bond market is functioning normally (unlike March 2020 when COVID hit and the Great Lockdown was initiated). There is increased volatility in all markets, but there is not dysfunction. There is the normal, predictable flight to safety. Please read our Special Market Update, “Market BUMPS to Climb On” from February 23 on our website, at www.nvestwealth.com.Continue reading
Special Market Update: “Market BUMPS to Climb On”
Special Market Alerts are generally undesirable to write. That’s because we never intend to raise alarm or create uncertainty. How should investors think about the first 10% correction of this new bull market? Certainly a correction was due following 23 months since the March 23, 2020 bear market bottom. From that time, the S&P500 jumped +121.1% to its last closing high on January 3, 2022 without even a 5% pullback. Since early January, investors ramped-up their worry about everything – sticky inflation at +7.6% (highest pace in 40 years); persistent supply and demand mismatches for products, services, and workers, creating shortages. When demand is greater than supply, prices will rise. In fact, someone said “Inflation is an economic problem, and also a psychological proxy for things being out of control.”
Green Eggs and Ham – March Commentary
Do green eggs really exist? Dr. Seuss’ classic children’s book, “Green Eggs and Ham” was first published in 1960. This beginner book was created to be fun and easy to read, perfect for practicing readers ages 3 to 7, and lucky parents too. Readers enjoy the terrific tongue-twisters and unmistakable characters, Seussville, and signature rhymes. Even former President Obama noted during the 60th anniversary year of the author’s books, “Pretty much all the stuff you need to know (to live your life) is in Dr. Seuss.” Do green eggs really exist? A friend who raises chickens indicated eggs are laid in a wide range of different colors and sizes – white, brown, cream-colored, even pastel blue, pink, and yes even green. We know eggs come in small, medium and large sizes, even extra-large. Did you ever eat a colored egg? If you did, you may find it appropriate to quote a favorite storyline…“I do not like green eggs and ham. I do not like them, Sam-I-am.” [March 2 is Theodor Seuss Geisel’s (1904-1991) birthday, and schools call it Read Across America Day.]
February was an overall positive month for investors of the stock market, but financial markets are getting worked up. Interest rates are rising (meaning bond prices decline) faster and more than most expected. TheContinue reading
The Higher Wages of Growth – Review of Recent Economic Stats
In case you missed it as most of the media did, the Wall Street Journal (September 17, 2020) published an article by this title. In essence – “Rising economic growth lifted all classes.” The US Census Bureau reported some interesting personal income statistics:
Special Market Update: Pain & Gain
With stock prices, even bond prices, falling faster than they rise the next day, fear is dominating many investors’ thinking about investing and many current life activities. Schools, restaurants, churches are closed, temporarily. Gatherings of even a few people are discouraged. Numerous US states are implementing business lockdowns and stay-at-home strategies to contain the spread of COVID-19. At current, there are no tools (vaccine, drug) to address this novel virus, other than shutting economic activity down to buy time for the doctors and drug scientists. Unclear is when we are going to open the economy back up (April? May?), or if we can make it through the year without shutting down again in the Fall. Closing the economy is adding to everyone’s fear of the unknown – a multi-dimensional fear not limited to just Coronavirus, and including the prospects of severe economic/financial damage. Put simply, most all news seems bad.