Article Video

It’s understandable if the economic uncertainty unfolding in the daily news has left you wondering – or worrying – about what’s coming next. Regardless of how the coming weeks and months unfold, are you okay with gritting your teeth, and keeping your carefully structured portfolio on track as planned? This probably doesn’t surprise you, but that’s exactly what we would suggest. (Unless, of course, new or different personal circumstances warrant revisiting your investments for reasons that have nothing to do with the current market environment.)  

That said, the financial and economic news is uncertain. If you’ve got your doubts, you may be wondering whether you should somehow shift your portfolio to higher ground, until the coast seems clear. In other words, might these stressful times justify a measure of market-timing? 

Here are four important reminders on the perils of trying to time the market – at any time. It may offer some emotional relief, but market-timing ultimately runs counter to your best strategies for building durable, long-term wealth. 

  1. Market-Timing Is Undependable. Granted, it’s almost certainly only a matter of time before we experience another recession. As such, it may periodically feel “obvious” that the next one is nearly here. But is it? It’s possible, but market history has shown us time and again that seemingly sure bets often end up being losing ones instead. When markets drop swiftly, many investors wonder whether to expect nothing but trouble in the future. More often than not, market downturns end up being a brief stumble rather than a lasting fall. Had you gotten out following the downturn, you might still be sitting on the sidelines, wondering when to get back in. 
  1. Market-Timing Odds Are Against You. Market-timing is not only a stressful strategy, it’s more likely to hurt than help your long-term returns. That’s in part because “average” returns aren’t the near-term norm; volatility is. Over time and overall, markets have eventually gone up in alignment with the real wealth they generate. But they’ve almost always done so in frequent fits and starts, with some of the best returns immediately following some of the worst. If you try to avoid the downturns, you’re essentially betting against the strong likelihood that the markets will eventually continue to climb upward as they always have before. You’re betting against everything we know about expected market returns. 
  1. Market-Timing Is Expensive. Whether or not a market-timing gambit plays out in your favor, trading costs real money. To add insult to injury, if you make sudden changes that aren’t part of your larger investment plan, the extra costs generate no extra expectation that the trades will be in your best interest. If you decide to get out of positions that have enjoyed extensive growth, the tax consequences in taxable accounts could also be financially harmful.
  1. Market-Timing Is Guided by Instinct Over Evidence. As we’ve covered before, your brain excels at responding instantly – instinctively – to real or perceived threats. When market risks arise, these same basic survival instincts flood your brain with chemicals that induce you to take immediate fight-or-flight action. If the markets were an actual forest fire, you would be wise to heed these instincts. But for investors, the real threats occur when your behavioral biases cause your emotions to run ahead of your rational resolve. 

We’d like to think one of the most important reasons you hired us as your investment consultant is to help you avoid just these sorts of market-timing perils. 

So, if you have your doubts, please let us know. It’s our job and fiduciary duty to offer you our best advice across all of the market’s moves. While market-timing may be illusory, we are here for you, ready to explore various real steps you can take to shore up your investment resolve, regardless of what lies ahead. 

Client Service People
Client Service People
Article Video

Conrad Siegel’s Tracy Burke, CFP®, ChFC® and Catherine Azeles, CFP®, RICP® share an overview of what’s happening in the investment world. This short video reviews what’s currently driving the markets, what we can expect moving forward, and what it all means for you.

Article Video

Conrad Siegel’s Brooke Petersen, CFP®, ChFC® shares a brief overview of the tax proposals the Biden Administration had on the table as of late May 2021. More recent developments point to corporate tax increases being unlikely at this time. What we do know is discussions and negotiations are ongoing. As potential tax changes unfold, we will continue to explore what they may mean for investors.

Article Featured News

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. Conrad Siegel’s Pennsylvania offices were abruptly closed on March 19, 2020, under the order to close all non-life sustaining businesses in the state. A few days later, on the 23rd of March, the S&P 500 Index bottomed out after a devastatingly fast decline of 34% from its high in February. The world was in a state of disarray and nobody knew what tomorrow would bring.

A year later, restrictions are still in place but there is a renewed sense of hope that we will soon be able to put the fears of virus the behind us. That we will once again be able to spend time with family and friends without that worry that we may be contributing to the spread. That we can all return to work and those that lost jobs will soon find a promising opportunity. That small businesses will experience renewed foot traffic and not have to contemplate closing their doors.

As we all anticipate these things, the word “NORMAL” has been the most overused word of the past 12 months. We cannot help but look forward to better times. Financial markets, which are a forward-looking indicator, have recovered and surpassed even the most optimistic projections from a year ago. So, what lessons have we learned from the past year while seeking out the new normal?

Emergency funds: We should always be prepared for emergencies. Building an emergency fund is one of the first steps toward achieving financial success and stability. We typically recommend saving 3-6 months’ worth of expenditures in a money market account for quick and easy access. Encourage your loved ones to start saving, no matter how long it may take to build this fund, so they will be prepared for those times they don’t see coming.

Life insurance: Speaking of the unexpected, the pandemic is a good reminder that risk management is a pillar of financial planning. While death is not an easy topic to think about and plan for, the necessity of life insurance to provide for our family if the worst happens cannot be ignored. There are a lot of products out there and we typically recommend certain types over others, so reach out if this is a topic you would like to review or if you would like us to make an introduction to a trusted agent.

Estate planning: Piggybacking on the last topic, let’s not forget about the importance of having wills and estate planning documents in place and up-to-date. Procrastination is common in this ever important area. If you do not have a will, Power of Attorney, and health care directives, do not delay in setting up an appointment with an estate planning attorney. Once again, we are happy to provide referrals in this area. Finally, don’t forget to check your beneficiary designations.

Bear markets have always come to an end. But, knowing that does not make it any less frightening when watching markets drop. Recency bias causes humans to have an affinity with recent events over historic ones. When financial markets are tumbling, this bias causes us to believe the recent past will continue into the future as we hear calls that “this time is different.” Reacting to this fear and impulse in the early spring of last year could have caused you to miss out on the rapid ride up the markets experienced despite many predicting further turmoil.

Long-term investing takes discipline. We have all heard the stories of market-timing and stock-picking that promise a fantasy of riches. Speculation is not long-term investing, and often these stories do not end happily ever after. This is why Conrad Siegel believes in investing in a broadly diversified portfolio that you feel comfortable sticking with regardless of market conditions, what you read in the headlines, or hear in the news. Your strategic asset allocation, or mix of stocks and bonds, should be based on your risk tolerance levels and your financial goals to provide you with a level of comfort even when a global pandemic has been declared.

Please do not hesitate to reach out if you would like to review any of the financial planning aspects discussed above.

We want to make sure you are confident in your future, knowing that you planned for the unknowns ahead. Here’s to looking forward to normal!

Article Video

Conrad Siegel’s Tracy Burke, CFP®, ChFC® and Catherine Azeles, CFP®, RICP® share an overview of what’s happening in the investment world. This short video reviews what’s currently driving the markets, what we can expect moving forward, and what it all means for you.

Article News

Nobody likes to think about death, but yet we all have to face it sooner or later. The grief that dominates us when a loved one passes away can be immensely overwhelming. Then to make matters worse, the survivors need to figure out how to best move forward and settle the estate and financial affairs. Below is a checklist of estate items that need to be taken care of after a loved one passes away. Many of these tasks need to be handled by the executor of the estate, which would be named in the deceased’s estate planning documents.

Hire an estate settlement attorney: This may be the estate planning attorney of the deceased or another law firm experienced in settling estates. This attorney should drive the process in many ways and help to install the executor.

Secure property: Make sure their home and vehicles are safe, secure and locked. Also arrange for anything that may need regular care around the home. Notify the police so they can help keep an eye on it.

Locate the original will and other estate planning documents: Depending on the nature of previous estate planning, you may need to take some documents to the city or county office to have it accepted for probate. Your estate attorney hopefully can help with this process. If a person has died intestate (without having made a valid last will), then the intestacy laws of the state where the person lived will determine who will inherit their property; probate is still typically required.

Locate important personal documents: These may include driver’s license, social security card, passport, birth certificate, divorce decree, marriage license, property deeds, contracts and military separation papers among others.

Access safe deposit boxes at the bank: While these are less common, some people still have these boxes. Contact the bank to gain access.

Contact financial advisors, primary bank, brokers, insurance agents and accountants: Rely on these professionals to help you through the process and make it as easy as possible to wind down the estate.

Order sufficient copies of the death certificate: You may need 10 or more certified copies, depending on their financial activities. The funeral director usually will take care of ordering these.

Notify the person’s employer (if applicable): Work with the employer about any pay owed, life insurance and other benefits (pensions, etc.).

Set-up an Estate Bank (Checking) Account at the bank: This will receive and distribute funds that flow through the estate and allow the executor to pay bills.

Have the post office forward the mail: This will help to identify bills that need to be paid and accounts that may need to be closed. Pay the bills on time.

Contact the Social Security office: Do this regardless if the person was already receiving benefits by calling 1-800-772-1213. There may be survivor benefits or possibly a small lump-sum benefit. If the person was receiving benefits, they will need to discontinue the monthly payments.

Look into veterans’ benefits (if applicable): Call the VA at 1-800-827-1000 or check out their website.

Notify all financial institutions and utility companies: This includes but is not limited to banks, investment companies, mortgage companies, credit card companies, and insurance companies in addition to all of the utility companies providing service. The estate settlement attorney will guide you on how to wrap up financial accounts. You may need to provide financial institutions with either an official death certificate or copy of one. Be sure to close outstanding credit cards. For financial accounts, you will need the date-of-death value and for taxable investment accounts, you will need to request a step up in basis to the date-of-death value.

Insurance policies: Find out if the deceased had any life insurance policies – work with the insurance agent or company to have these paid out. Cancel other insurance coverage – this may include health insurance, homeowners/renters insurance (after the property is sold) and car insurance among others. If on Medicare, the Social Security office should inform Medicare in regards to parts A and B. Contact the insurance company that provided any supplemental Medicare coverage to cancel.

Try to identify online accounts and activity: Closing these to prevent fraud or unauthorized activity is important. Don’t forget about social media accounts.

Cancel driver’s license: This can help to prevent identity theft.

Make sure final tax returns are prepared: A final income tax return as well as an estate return will need to be filed, usually by an accountant. Generally, the estate tax return is due 9 months after the date of death – a 6-month extension can be requested.

TIPS for surviving spouse

Don’t make emotional decisions: When under emotional stress, many people rush into rash decisions they later regret. Take your time and make sure all decisions are the best ones.

Ask for help: Rely on other family members or friends to help you through the process. Lean heavily on a trusted financial advisor, who can often help with tracking down financial institutions and coordination with the estate attorney.

Revisit your own estate planning: When a spouse passes away, your own estate planning will need to be updated to make sure your wishes for your own estate are eventually followed.

Let's see if we're a good fit

Contact our team to see if your situation matches our expertise

With your financial goals in mind, fit matters most. A 15-minute phone call will give us the chance to make sure your situation matches our expertise. Please provide some information and we will respond to you promptly.