Reminder: Headlines Are Framed to Frighten – Not Enlighten
If we’ve been doing our job as your fiduciary advisor, you might already be able to guess what our take is on the current market news: Unless your personal goals have changed, stay the course according to your personal plan.
Still, it never hurts to repeat this advice during periodic market downturns. We understand that thinking about scary markets isn’t the same as experiencing them.
So, what’s going on? Why have stock prices suddenly become volatile after such a long, lazy lull, with no obvious calamity to have set off the alarms? While we could point out fears of inflation, interest rate movements, and other potential reasons, we can’t (and no one can) know for sure what exactly moves markets on any given day, and this does not inform us of what will happen next. > SEE MORE
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Waypoint Wealth Management
Your Retirement Plan Doesn’t Care About January
Have you heard of the “January Indicator” or “January Barometer?” This theory suggests that the price movement of the S&P 500 during the month of January may signal whether that index will rise or fall during the remainder of the year. In other words, if the return of the S&P 500 in January is negative, this would supposedly foreshadow a fall for the stock market for the remainder of the year, and vice versa if returns in January are positive.
I’ve heard this for years. And I can remember early on in my career probably giving it too much attention. After all, the financial news loves soundbites, and this was one that could grab viewer’s attention as we wonder about the upcoming year. But what does the evidence show us? Have past Januarys’ S&P 500 returns been a reliable indicator for what the rest of the year has in store? More importantly, should we care or worry about it? > SEE MORE
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Waypoint Wealth Management
Should We Track an “Index”, or Follow the Evidence?
Legend has it, a pharmacist named John Pemberton was searching for a headache cure when he tried blending Coca leaves with Cola nuts. Who knew his recipe was destined to become such a success, even if Coca-Cola® never did become the medicine Pemberton had in mind?
In similar vein, when Charles Dow launched the Dow Jones Industrial Average (the Dow), his aim was to better assess stock prices and market trends, hoping to determine when the market’s tides had turned by measuring the equivalent of its incoming and outgoing “waves.” He chose industrials (mostly railroads) because, as he proposed in 1882, “The industrial market is destined to be the great speculative market of the United States.”
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Waypoint Wealth Management
What Are Three Things That Retirement Software Can’t Account For?
You’re getting ready to finally “retire”. We’ve run the numbers with you, looked at various calculations and determined when to begin Social Security. We looked at how your taxes will change, where that money will come from, and even how they will be paid. We’ve reviewed your allocation and strategy for portfolio income and how that fits into the plan. We told you that you are financially independent, that you won’t need to worry and you can enjoy this next chapter of life with full abandon.
But you’re still uneasy.
There is still something on your mind that’s worrying you. You’re comfortable with the financial aspects of this change, but you just aren’t sure how your life is going to look on the other side of this decision. > SEE MORE
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Waypoint Wealth Management
Playing The “Winner’s Game”
Each year, our Director of Research at the BAM Alliance, Larry Swedroe, unveils what he believes are some of the most important lessons of investing. This month’s Viewpoints will highlight three of our favorites from the list. The full list of nine lessons can be found here, and is well worth the time to read.
It was tough to choose only three, as they’re all insightful. But here are Waypoint’s favorite three (okay, four) lessons from last year:
- Active management is a loser’s game:
Ouch. This might sound harsh. But more and more people are becoming aware of the evidence against investing based on opinion. More investors each year are realizing the challenges for active managers to keep up with (and outperform) the markets, after fees and taxes. At Waypoint, we’ve learned that as well and came to a point in our careers where we had to put ego aside and truly measure returns against an evidence-based portfolio. This is when we realized the importance of playing the winner’s game.
- So much of returns comes in very short and unpredictable bursts:
There is simply no better lesson for staying invested during challenging times. > SEE MORE
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