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.
What are your thoughts, feelings, and beliefs about money? What about your partner, and do they differ from your own? Sometimes, the conflict we experience around money in our personal lives can be attributed to incongruent money scripts with those with whom we share finances. Let’s dive into the term money script and how understanding it can help us achieve our financial goals.
According to a recent article by the Associated Press, 2020 is shaping up to be one of the best IPO markets in over two decades. While traditional initial public offerings continue to be the primary avenue companies use to raise money and have their shares listed on a major exchange such as the New York Stock Exchange or Nasdaq, the process is not without drawbacks. Other alternatives to bring companies to market have been tested over the years, such as Dutch auctions (Google, 2004), Direct Public Offerings and Special Purpose Acquisition Companies, or SPACs.
One question I often hear is: With the market being so unpredictable, how can we properly plan for the long-term? A global pandemic, upcoming elections, trade tariffs, record unemployment, GDP in freefall, there is no shortage of reasons why the market could be declining this year. Yet, the stock market is not falling, it continues to push higher, led by the information technology and consumer discretionary sectors. Over the last year, out of the 11 sectors of the economy, only consumer staples and energy lagged the S&P 500.
With over $5 trillion in 401(k) plans across the United States as of 2019, this qualified retirement plan's continued popularity is without question. Although the amount of 401(k) money invested in company stock has declined in recent years, according to the Investment Company Institute, investors still have about 6% of plan assets concentrated in their employer's stock.
In the last two weeks, big news items were the announcements from Apple and Tesla that they will be splitting their stock on August 31st. Apple will split its stock 4 to 1, meaning you will receive four shares for every share you own as of August 24th. The split will be Apple's fifth stock split in forty years. Tesla will split their stock 5 to 1 by issuing an additional four shares in a dividend for every share you own as of August 21st.
In my last article, I touched on how the behavioral challenge of loss aversion can be detrimental to investors. By causing people to resist making intelligent strategic moves in their portfolio out of fear of recognizing a loss, the result may be investment underperformance over the long run. Today we are going to briefly look at another common behavioral challenge investors face, namely overconfidence.
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.
It’s not every day a “Jeopardy!” contestant becomes a household name and makes one of the longest running television game shows must watch TV. But that’s exactly what happened during James Holzhauer’s 32-game winning streak. Throughout Holzhauer’s dominant run, it seemed to be only a matter of time before he became the highest-winning contestant in “Jeopardy!” history, a record held by Ken Jennings. Jennings amassed a total of $2,520,700 over his 74-game winning streak in 2004. However, Holzhauer was defeated in his 33rd game, coming just $58,484 shy of Jennings’ record.
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.
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.
On Friday, Uber went public in the what is the biggest initial public offering (IPO) so far this year. Earlier this month, Beyond Meat went public with less hype and saw its price skyrocket 163% in its first trading day, making it the best-performing first-day IPO in nearly two-decades. Beyond Meat is a producer of plant-based meat substitutes founded in 2009. The company’s Beyond Burger is sold at Whole Foods and restaurants chains around the country.
At HIGHLAND, one of the cornerstones of our investment approach is that securities offering higher expected returns share particular attributes, which we refer to as the dimensions of higher expected returns (or dimensions for short). These dimensions are based on economic theory, backed by Nobel Prize winning academic research, and supported by decades of real-world historical data. Dimensional Fund Advisors is an investment management firm with a long history of applying academic research to practical investing and is one of our preferred investment managers. Dimensional Fund Advisors defines a dimension as a return difference between two assets or portfolios “that is sensible, empirically robust in the data, and cost-effective to capture in well-diversified portfolios.”
When Tiger Woods won the 2019 Masters earlier this month, it capped off one of the greatest comebacks in golf history, if not one of the best comebacks in the history of all sports. Woods’s last Masters tournament victory came in 2005 and his last major tournament win was back in 2008. In this 11-year span between major wins, Woods faced a very public divorce, was arrested for driving under the influence, and battled a number of injuries. With his latest Masters win, Woods has 15 major tournament wins and is now three behind Jack Nicklaus for most of all time.
Nobody likes paying taxes. Even though taxes are necessary to keep our schools open, communities safe, roads clean, and governments running, it’s not a fulfilling experience to see a percentage of your hard-earned income or investment gains vanish into thin air. With that being said, there’s no way of escaping taxes (without risking legal repercussions, of course), but that doesn’t mean there aren’t things we can do throughout the year to reduce the amount of taxes you ultimately end up paying.
Author Nancy Hatch Woodward once wrote, “Snow brings a special quality with it – the power to stop life as you know it dead in its tracks.” Anyone who lives in the Northeast knows this all too well.
On Thursday, November 15, 2018, the New Jersey/New York area was hit with one of the more notable November snowstorms in history. Parts of Northern New Jersey and New York City received upward of six inches of snow, with some areas getting hit with as much as ten inches.
Over the past few weeks most of our posts have focused on putting the recent stock market volatility in perspective and subduing concerns about the strength of the U.S. economy.
One of the important points we have stressed is the importance of remaining disciplined to your investment strategy because capital markets have rewarded long-term investors. One of the graphics we often show to illustrate this point is the chart included below. This chart shows the growth of $1 from January 1, 1926 through December 31, 2018 had you invested in US small cap stocks, US large cap stocks, long term corporate bonds, long term government bonds, and cash.
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.
In the 1950s psychologist Solomon Asch conducted a series of experiments to investigate the extent to which social pressure from a majority group could affect a person to conform. Asch’s experiments were simple vision tests. A group of eight male college students were placed in a room, shown a card with a line segment on it, and then shown another card with three line segments labelled A, B, and C. One of the line segments on the second card was the same length as the line segment on the first card, while the other two line segments were clearly of a different length. Participants were asked to write down their answers and then give their answers aloud. Seems like a pretty straight forward experiment, but there was a twist.
