“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.”
Author Archives: Nvest Wealth Strategies
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.
“Goes Without Saying” and a “Stitch In Time” – Nvest Nsights Q1 Newsletter
After nearly two years of strong market gains, investors experienced their first meaningful pullback during the first quarter of 2022. While it is typical for markets to experience pullbacks and a higher level of volatility after the initial 12-18 months of a new bull market, it is never welcomed or comfortable. That is probably because the uncertainties that usually accompany them are always unique. Present uncertainties include a still fractured global supply chain, a Federal Reserve that finds itself needing to raise interest rates and tighten monetary policy in pursuit of arresting inflation that is running at the hottest pace in 40 years; and of course Russia/Ukraine which muddies both challenges further.
This quarter our Nvest Nsights newsletter shares what we’re watching and perspective to the topics/questions we’re most frequently hearing from clients. Perhaps it “Goes Without Saying” that the backdrop highlighted above implies 2022 will likely remain a challenging year; but there are also some important messages to be heeded from history. There is also the saying that “A stitch in time saves nine”; while ‘main street’ consumers may not welcome rising interest rates and the impact on the cost of borrowing (or the markets in the short term) it is nonetheless appropriate for the longer-term health of the economy. The markets are adjusting to a changing investment landscape. We close the update with our personal finance theme article with a change coming to employer 401k statements this year. Will the new “Lifetime Income Estimates“ being provided help you feel more secure?
A printer-friendly version of the full quarterly newsletter, including benchmarking and fund performance data, can be obtained here: Q1 Nvest Nsights
As always, please do not hesitate to let us know if you have any questions or would like to coordinate a time to visit.
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.”
There’s Plenty More – February Commentary
We occasionally hear this idiom: “There is more where that came from.” It can be used in a negative, combative sense or in a positive, generous way. The statement may be offered to a belligerent child – “if you do not shape up, there’s more to come.” Alternatively, where there is strong achievement more success often follows. In both cases the meaning is the same: there is a reservoir just waiting to be tapped if needed. Another famous statement: “the barrel is only half full; or the glass is half empty.” As we pass through 2022, will there be more market advance (from which it came), or are investors expecting the success to evaporate? Is the longer market up-trend still viable, or are the short term worries about “everything” (inflation, interest rates, Russia/China/North Korea, oil, COVID variants and living life again) emptying investor sentiment? How much more is to come – plenty more (of what)?!
“Lowdown on 2021” and the “Journey into ’22” – Nvest Nsights Q4 Newsletter
Happy New Year! 2021 provided a second, actually a third, consecutive year of double-digit investment returns for stocks (most forget 2019 because of how quickly the mood soured in early 2020).
This edition of our quarterly newsletter, Nvest Nsignts provides “the lowdown” on what themes drove the financial markets during 2021. Perhaps of greater interest is our sharing of what we believe will be the biggest focus for investors as we “Journey into 2022“. Our personal finance focus this quarter, “Healthy Habits” shares several easy-to-implement “resolutions” that can pack a powerful punch to enhance your long-term financial posture as you set plans for the New Year.
A printer-friendly version of the full quarterly newsletter, including benchmarking and fund performance data, can be obtained here: Q4 Nvest Nsights
As always, please do not hesitate to let us know if you have any questions or would like to coordinate a time to visit.Continue reading