Taking Stock of Lump-Sum Investing vs. Dollar-Cost Averaging

Some investors favor a dollar-cost averaging (DCA) approach to deploying their investment capital. Unlike lump-sum investing, in which the full amount of available capital is invested up front, DCA spreads out investment contributions using installments over time. The appeal of DCA is the perception that it helps investors “diversify” the cost of entry into the market, buying shares at prices that fall somewhere between the highs and lows of a fluctuating market. So what are the implications of DCA for investors aiming to generate long-term wealth? (more…)

Finding the Silver Lining

According to Charles Schwab’s 2020 Modern Wealth Survey, 57 percent of Americans say they or a close family member have been financially impacted by COVID-19. In addition, nearly 15 percent reported being more financially stressed as compared to the end of 2019 before the widespread outbreak, and express concern that their increasing stress might have a lasting effect. (more…)

Is the Price Right?

It is often said that stock prices take the stairs up and the elevator down. In the first half of 2020, we saw how fast that elevator ride down could be. In just two months, U.S. stocks lost effectively years of gains. In fact, this was the fastest decline of 30% or more that we’ve ever experienced.

U.S. stocks weren’t alone on the elevator ride down. Joining them were stocks of all developed and emerging countries, as well as many commodities, like oil. True, oil’s decline was exacerbated by a debate between Russia and Saudi Arabia over the amount being produced, but no one expected it to briefly trade at a negative $37 per barrel. (more…)

Wealth Planning for Life’s Uncertainties

As events this year have reminded us, uncertainty is always a factor when it comes to the economy and markets. It’s also a common companion in other areas of our lives, often with real financial ramifications in those instances as well. But you have a plan for that. It’s built with an eye toward managing those inevitable uncertainties and controlling what you can. Importantly, it should include a wealth transfer component designed to achieve the legacy you envision while providing for your loved ones in the way you intend. So, check off each of the following must-have documents you’ve prepared to solidify your wealth transfer plans. See where you stand. Then consider sharing this list with someone you care about. (more…)

How Real Is Post-Pandemic Inflation Risk?

By Alex Kluesner

Governments around the world have made unprecedented efforts to support the global economy in response to COVID-19 by increasing spending and getting cash into the hands of both consumers and companies. Steps taken thus far may well have been necessary to help fight the pandemic’s economic fallout – but at what cost? Pundits are starting to point their collective finger at a dramatic increase in inflation, which is the idea that currency depreciates – buys less – as time goes on. (more…)

Change vs Transition

Change is situational. Transition, on the other hand, is psychological.  It is not those events but rather the inner reorientation or self-redefinition that you have to go through in order to incorporate any of those changes into your life.

William Bridges, PhD
Transitions: Making Sense of Life’s Change (more…)

Doing Well and Doing Good?

Growing interest in the impact of fossil fuels on the global climate may spark questions about whether individuals can integrate their values around sustainability with their investment goals and, if so, how. As citizens, individuals can express their political preferences around sustainability through the ballot box. As investors, they also can express their preferences through participation in global capital markets. One key question these investors face is how to do this without compromising their desired investment outcomes. For instance, how can they reduce their portfolio’s environmental footprint while maintaining sound investment principles and achieving their investment objectives?

Read more here…

Election Year Politics and Stock Market Forecasts

A recent New York Times article discussed the stock market impact of Joe Biden winning the 2020 presidential election. The article quoted Lori Calvasina, head of US equity strategy at RBC Capital Markets, who said “The market is starting to worry that Trump will not be re-elected. Trump is consistently viewed as a positive for the stock market.” Before you make changes to your portfolio as a result of these predictions, consider the following three points:

  1. Markets have already priced in the possibility of a Biden presidency.
  2. Two-step forecasting is difficult.
  3. Your political beliefs can lead to investing mistakes.

(more…)

Evidence-Based Planning

“I don’t know…something just doesn’t feel right,” you mumble through your mask to your primary care doctor while sitting on the examination table under a flickering fluorescent light in a room decorated with anatomical charts and hand-sanitizer dispensers. After listening to your heart and your lungs, the doctor diagnoses your feelings of worry as a mild condition that is easily treatable but could become serious if a proper treatment regimen isn’t followed. The doctor gives two treatment plans: one coming from the New England Journal of Medicine and the other from a health magazine that can be purchased at your local convenience store. Which plan do you choose? (more…)

Goals are Key to Designing Your “Rich Life”

Financial Life Planning is a holistic process that will help you to clarify your values and guide you in defining and designing your unique version of the “rich life.”

Goal setting is an essential component of this process, and a powerful tool for experiencing what is most important to you.  When you imagine what you want your life to be like and what you want to achieve, these images will become the basis of your life and financial goals. (more…)