As we close out the third quarter of the year, it's a natural time to pause and take stock of your progress toward your financial goals. By this point in the year, nine months of progress, challenges, and decisions have shaped where you stand today. With three months ahead, there's time to fine-tune your approach, close gaps, and position yourself to finish the year strong.
As we approach the year's final quarter, it’s the perfect time for a retirement plan check-up. Even if you set your 401(k) contributions months ago, life has a way of shifting the numbers — salary increases, bonuses, or payroll changes can all affect how much you are actually putting away.
As we embark on a new year, there's no better time to take control of your financial future by thoroughly reviewing your cash flow. If having a vision and establishing goals is the touchstone for a financial plan, this essential financial practice sets the foundation for achieving your goals and ensuring long-term financial stability.
Anyone who has gone through a divorce knows how emotionally challenging and financially complex it can be. While attorneys handle the legal aspects, a Certified Divorce Financial Analyst® focuses specifically on the financial implications of divorce. This specialized designation equips professionals with the expertise to guide clients through the intricate financial aspects of divorce proceedings, ensuring better outcomes for their financial future.
Anna Marie Mock, a fee-only certified financial planner at Highland Financial Advisors, discusses the dynamic interplay between art and science in financial planning. Drawing inspiration from Leonardo da Vinci's philosophy that "everything connects to everything else," she emphasizes that financial planning is an art involving subjective goal-setting and a science-driven by objective analysis tools. In this video, Anna explains how the scientific method can be applied to financial planning, using equity compensation as a concrete example.
Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?
T.S. Eliot, The Rock, 1932
What does Eliot’s critique of modernity, which holds that we are losing something valuable in our lives as we pursue technical progress, have anything to do with investing and personal financial planning?
Inflation has been a popular topic of late.
In his press conference to announce the Fed’s decision to cut interest rates following its July meeting, Fed Chair Powell cited “muted inflation pressures” as justification for action.
However, retaliatory tariffs between the U.S. and China have raised concerns this could spark inflationary pressures as consumers are forced to pay higher prices.
When Congress passed the Federal Reserve Act in 1913, it established the Federal Reserve System with the initial objective of supporting a fragile banking system. In the over 100 years since it was first established, the responsibilities of the Federal Reserve System (or the Fed for short) have expanded to include several broader responsibilities, such as fostering a sound banking system and a healthy economy. One thing that hasn’t changed is the Fed is an independent government agency that is accountable to the public and Congress to act as the Central Bank of the United States.
As we highlighted in our post “Anatomy of the U.S. Economy,” consumer spending accounts for nearly 70% of U.S. gross domestic product (GDP). Current consumer spending, as well as future spending, is highly influenced by consumer expectations for the economy.
The U.S. economy is on the verge of breaking the record for the longest stretch of economic expansion in U.S. history. Since the U.S. economy hit bottom in June 2009 following the Great Recession, it has been on a slow and steady recovery that has it on the brink of surpassing the expansion from March 1991 to March 2001 as the longest in U.S. history.
The American Dream consists of baseball, warm apple pies, and homeownership. As I near the end of my mid-twenties, many of my peers are trying to realize the American Dream of purchasing their perfect starter home. Over the years, my cohorts have casually been looking to find the deal of the century in a move-in-ready starter home at a low price. But even the starter homes that require major renovations and improvements have come with lofty price tags.
For the past 18 months, two hot button issues for investors have been the Fed and trade negotiations between the U.S. and China. These two issues were the catalysts for two market corrections in 2018, the latter of which nearly approached bear market territory. However, for the first five months of this year fears of a Fed misstep were alleviated and reported positive progress towards a trade deal between the U.S. and China spurred markets to new all-time highs.
What a difference a year makes. This time last year we were highlighting a picture-perfect year for global stocks. In 2017, both the S&P 500 and the MSCI All Country World Index ex USA were positive for all twelve calendar months. This was the first time either index accomplished this feat and it happened with near-record low volatility while enduring geopolitical tensions, political dysfunction, massive natural disasters, and tighter monetary policy. 2017 was defined by synchronized global expansion whereby most global economies were getting stronger, with the United States leading the charge.
Over the past 80 days, the US stock market has declined about 11%, and over the last 365 days, it is down about 1%. Foreign stock markets have declined about 9% over the last 80 days and are down about 10% for the last 365 days as well. The US bond market, typically a good hedge to the risk of stocks, hasn’t delivered much protection during the same time periods, being up about 1% in the last 80 days and down about 1% for the last 365 days.
Over the past few weeks the focus of our weekly posts has been on the volatility in the global equity market. We have sought to provide some insight into what’s driving global stocks lower and provide perspective on how frequently drawdowns like the one we are currently mired in occur. We hope these insights and perspectives have been valuable for you and helped to give you peace of mind.
The MSCI Emerging Markets Index looks significantly different today than it did at its inception thirty years ago. For one, the market capitalization of emerging markets companies has increased from $52 billion in 1988 to $5.3 trillion as of May 31, 2018. This underscores the ability of emerging markets countries to contribute to the global economy, especially as global markets have expanded.
In the past few weeks, there has been an increase in volatility in stock markets around the globe. The first bout of volatility spanning the last week of January and first week of February was caused by concern the Federal Reserve would raise interest rates at a faster pace than the markets were anticipating.
Certain aspects of the tax bill signed into law at the end of last year have received significant attention from investors, and rightfully so. The final version of the Tax Cuts and Jobs Act lowered corporate tax rates, realigned personal tax rates, and capped or eliminated certain deductions (i.e. state and local tax deductions).
