“The Price is Right?” & “Framework for a Path Forward” – Nvest Nsights Q1 Newsletter

Nvest (Bill, Steve and Jordan) wishes for you and your family/friends good health, safety and wellness from this COVID-19 virus and the economic challenges.  We are greatly concerned by the very real human health impact and ongoing crisis; praying for a timely cure for these current health and economic challenges.  Let us know of your worries and if we can be helpful.  While it would be unwise to meet in person due to social-distancing protocol, we can visit virtually via web meeting to review your needs, portfolio reactions, and discuss LIVING LIFE financial planning questions.  Call or email to coordinate a time to visit.

This quarter you will find several timely updates.  First, “The Price is Right?” reviews how swift was the transition from bull market into bear and shares historical perspective; places the size of recent government responses in context; and what we are watching to signal that durable recovery may be near or developing.  “Framework for a Path Forward” examines whether the market low observed on March 23 was “a” low, or “THE” low.  It is important awareness that retests are normal during periods of market stress, but the market will offer clues beneath the surface about where we are and when/what actions are appropriate to position portfolios for recovery.  “Thoughtful Comments for Careful Consideration” is a compilation of notable quotes from highly respected individuals that can be helpful during challenging environments.

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When Life Throws You Lemons, Make Lemonade – Strategies During a Bear Market

No sugar-coating it; the start of this New Year is not what any of us hoped for.  Day to day life is highly uncertain, and investments are bruised.  While the cause of the current environment is unique and uncharted for every living generation, this too shall pass.  Periods like this can cause one to feel paralyzed, with nothing to do but wait it out.  However, there are strategies individuals can pursue that will position them to benefit when the storm begins to clear, and simultaneously help you restore a long-term mindset.

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“Hindsight is 2020”, “2020 Vision” & “Sparks Start Fires – Nvest Nsights Q4 Newsletter

Happy New Year, and new decade!  Time flies – just twelve months ago investors entered 2019 questioning whether the bull-market might be dead following a relentless and jarring 4Q’18 decline coupled with anxiety that the Federal Reserve would continue pursuing step-like rate increases despite rising uncertainty related to trade and tariffs.  At that time, who would guess that the year would provide the most attractive full-year market performance in over 6 years?!

In this quarter’s update, “Hindsight is 2020” provides a quick recap of the recent year, but more significantly why it is so important to battle temptation to invest based upon short-term worries or negative headlines alone.  Continuing, “2020 Vision” [bear with us as we enjoy the easy puns available this calendar year] discusses the key themes we’re focused on this year and how those shape our expectations/forecast for the broad economy and investment markets in the upcoming year.  Among the themes are a Fed that appears on-hold; the Money Supply (M2); international economic fundamentals and investing opportunity; bond markets; and a US Presidential election year.  Lastly, “Sparks Start Fires” offers quick thoughts on escalating middle-east tensions and how these geopolitical uncertainties may cause market jitters in the short term.

The printer-friendly version of these newsletter articles can be obtained here: Nvest Nsights – Q4 ’19 Newsletter.

Also included in the newsletter (and posted separately here), our personal finance topic this quarter overviews the recently passed The SECURE Act and broad implications for both owners and beneficiaries of retirement accounts.

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The “SECURE” Act

Against a noisy political backdrop and busy holiday season, it would be easy to miss a key piece of legislation called the SECURE Act that was signed into law in late-December that touches in one form or another most all investors and current retirees.

We are receiving some questions regarding the act’s passage and would like to call attention to the two sections we believe are of greatest impact. Before we jump to discussing The Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), we want to remind you that we view it important to stay abreast of changes to laws or rules that could impact your financial future.  We monitor them almost as closely as we monitor the markets.

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“September Crazy” & “Big FAT Yields” – Nvest Nsights Q3 Newsletter

Despite persistent and worrisome headlines dominating the news flow all year, US Stocks enter the 4th quarter with their biggest YTD gains in more than two decades.  In this quarter’s update, the article “September Crazy” discusses why the current bull market – which began 127 months ago and is now the longest in US history – could still advance further due to fundamentals and an anything-but-euphoric sentiment.  “Big Fat Yields” (or the lack-thereof) shares several implications of low interest rates, the message from the yield curve, and the Fed’s likelihood to pursue additional cuts.  The above themed titles taken together might also be a reason why the market leadership shifted abruptly in September; will we see the rotation wherein “Losers Win; Winners Lose” continue into the 4Q?

The newsletter also contains two brief Personal Finance themed notes: “Doing Diligence” and “Transitioning from a ‘Saver’ to a ‘Spender’ in Retirement” are related, but speak to the importance of discipline (be it with saving, investing, etc) as well as the emotional hurdles we observe for many individuals either at the doorsteps or in the early innings of retirement.  These articles can be found posted separately.

Click Here to Download the printer-friendly PDF version of our newsletter or continue reading below.

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Transitioning From A “Saver” to a “Spender” In Retirement

I  carefully saved for most of my life… now you are telling me that I need to spend my retirement nest egg?

One of the most difficult transitions many individuals will face in financial life is moving from being a “person at work” (the accumulation phase where you are saving and building wealth) into  someone now living off their “money at work” (the “decumulation” phase).  A recent study by BlackRock Retirement Institute found that “instead of actively and systematically decumulating assets, retirees display a tendency across all wealth levels to retain assets and not spend down their initial principal.” The study also found that, “More than one third of current retirees actually grew their assets – leaving considerable potential consumption on the table.”

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“Can’t Live There” – Nvest Nsights Q2 Newsletter Articles & FAQs

As we enter the 2nd half of 2019 it is difficult to recall a time when the market was hitting new highs but investor attitudes felt so indifferent.  Rather, sentiment is guarded.  This is likely due to a Federal Reserve that raised interest rates 4 times in 2018 and now appears to be “too tight” when also considering persistent uncertainty from international trade and tariff talk.  Taken together, investors perceive the global economic outlook is at risk.

As this quarter’s Nvest Nsights newsletter highlights, the good news is those worries seem to be keeping the close attention of those with the power to resolve.   “Can’t Live There” and “Missing – Reward” are efficient reads on the key items driving financial markets and context about the current (and now longest) economic expansion in US history.  Strong starts to a year bode well for the balance, but we also submit that the path of both the market and policy (trade & monetary) adjustments may not be smooth.  We also share several “Frequently Asked Questions” being received recently from clients; we hope you find those relevant and helpful.

Click Here to Download the printer-friendly PDF version of our newsletter or continue reading below.

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Life Insurance is NOT for Saving

Careful! Avoid buying life insurance as a savings strategy!  Stop buying it as a tax-deferral vehicle for retirement savings!

Insurance of any kind is a risk-management tool.  From our perspective, an individual should buy life insurance for one reason: because there will be a financial impact on one’s family or business if they unexpectedly die.  For most individuals, that financial impact is typically highest early in life when working years ahead are many, financial assets accumulated are low, and financially dependent children and/or significant debts (such as home mortgage) exist.  Over time, one’s insurance need generally declines and ultimately reduces to zero at some point prior to retirement.

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“Age is Just a Number” – Nvest Nsights Q1 Newsletter Articles

The 1st quarter was one of the strongest starts to a new year in the last two decades.  It followed an equally unsettling period over the final 3 months of 2018 which significantly damaged investor sentiment, making the swift rebound another textbook example revealing just how challenging would be market timing.   This quarter’s newsletter contains four brief articles.  “Reflections on a Bull Market” and “Age is Just a Number” provide perspective on the progress of the current bull market  and economic cycle, respectively, which are both long by historical standards but need not die due to age alone.  “No Beauty Contest” shares why the treasury yield curve is an indicator investors are monitoring closely, especially now, while “Style Differences Exist” provides color about how we are positioning client accounts with consideration for managing portfolio risk.

The full printer-friendly version of our newsletter, including data tables for selected mutual fund and ETF performance as well as portfolio benchmarking, can be downloaded here: NVEST NSIGHTS 1Q.

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