The New Year is always a great time to reflect while also looking ahead. Our team welcomed Conrad Siegel’s Chief Investment Officer, David Lytle. Together, we took a look back at the market and the events of the last 12 months. We also looked ahead, breaking down key data points that we can use as a guide for investing in 2025.
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Conrad Siegel’s Tracy Burke, CFP® takes a look at what the market did over the last month, what we can expect moving forward, and what it means for you.
You’ve probably heard the phrase “you have to retire TO something, not FROM something,” but what does that mean? Whether you are preparing for or currently in retirement, most people focus only on the financial aspects and miss the emotional side. In this interactive virtual event, we discussed how you can live your best life in retirement.
Conrad Siegel’s Tracy Burke, CFP® takes a look at what the market did over the last month, what we can expect moving forward, and what it means for you.
Conrad Siegel’s Tracy Burke, CFP® takes a look at what the market did over the last month, what we can expect moving forward, and what it means for you.
Conrad Siegel’s Tracy Burke, CFP® takes a look at what the market did over the last month, what we can expect moving forward, and what it means for you.
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Earlier in the month, you were likely bombarded with news of the latest market downturn. By Monday, August 5th, the S&P 500 had fallen more than 8% from its all-time high in mid-July—putting it a little bit shy of correction territory. By Tuesday, August 6th, the market had already staged an uptick. And by the time you’re reading this, much of the market decline has been erased.
Since we haven’t seen as much market volatility recently, this one may have left you feeling a bit shaken. Why here? Why now?
To be blunt, we don’t know for sure. Some investors might be worried the U.S. economy has weakened based on news of rising unemployment. Maybe it’s because the Federal Reserve didn’t cut interest rates in July, as many investors had hoped. Maybe it’s fears of a U.S. recession or an uncertain election year.
If we look for them, we can always find reasons the markets might have taken a turn for better or worse. Unfortunately, there’s no way to know in advance. But the good news is we don’t need to know. Instead, we know this: Markets have always climbed upward eventually.
This is a far more important message to bear in mind—and a comforting one for long-term investors like us.
So, what’s the best course of action? Sit tight and let your long-term investment plan continue to work for you. Instead of worrying about interest rates, the job market and strength of the U.S. dollar, consider focusing on enjoying the last few weeks of summer. Catch up on beach reads, barbecue in the backyard or simply relax by your favorite body of water. Read the daily financial news if you’d like—and let us know if we can answer any questions. But remember, the long-term planning we’ve done in the past means you’re not required to keep up with it all, if you’d rather spend your time elsewhere.
Conrad Siegel’s Tracy Burke, CFP® takes a look at what the market did over the last month, what we can expect moving forward, and what it means for you.
We’ve crafted hundreds of financial plans over the years.
Here are some of the most overlooked opportunities we see during our financial planning meetings.
Not fully understanding different accounts/their roles
- Employee benefits – Your employer retirement plan is likely one of the best benefits you have access to during your working years. We often see people not fully understanding their plan or not fully utilizing the plan(s). This can also be said about Roth 401(k) options, Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs).
- Tax implications – Your employer 401(k) is a tax-deferred account and is one of a few savings buckets you can utilize for big life goals like buying a second home or retiring. Would it make sense to funnel money into the taxable and/or tax-free buckets? From there, additional tax-planning may revolve around things like tax loss harvesting in the taxable bucket or making Qualified Charitable Contributions (QCDs) from the tax-deferred (IRA) bucket, when appropriate.
Not having a cohesive investment strategy
This is a big one. It’s why investment management is such a big part of our work.
- Asset allocation – Most often, we find people utilizing an approach that is too aggressive given their stage of life. Occasionally we’ll run into a family that is too conservative. Remember “Goldilocks and the Three Bears?” We’re looking to craft portfolios that aren’t too “hot” or too “cold”, but just right!
- Poor advice – You’d be amazed how often we run into poor investments because “their neighbor told them it was a good pick” or they’re chasing past performance!
- Ignoring fees – There are many investments (and advisors) that come with hidden fees. These fees can eat away at returns, and they can be very hard to find!
Some of the fees we look out for include: 12b-1 fees, front-end load, back-end load, annuity fees, etc. We push clients to ask outside advisors: “How do you get paid?” and “What are all of my fees?”
- Ask the question – When all else fails, it’s always a good idea to ask, “Does this account and its investments fit my long-term goals?”
Not fully understanding when (and how) to retire
- By far, the most common question we get – “Do I have enough to retire?” It’s understandable and there are a lot of factors to consider. Even those with large amounts of savings are asking this question – they may not have a good handle on how much their household is actually spending.
- Transitioning from saving to spending – We save, save, save, for so many years. People often struggle with the idea of flipping that switch from saving to spending (and how to do so tax efficiently).
Getting the family on the same page
- How do I balance retirement savings with helping my children? – Many people struggle with how to balance their own retirement savings/spending with sharing their wealth with children for things like college, cars, weddings, homes, etc.
- Only one family member knows about the finances – Oftentimes one person in the family handles the money, and that’s okay. But it’s important for multiple family members to be educated and aware of the financial situation, accounts, and planning information. This ensures your legacy wishes are adhered to and that there are no (burdensome) surprises for the survivors after your passing.
Of course, every person and family are different. These are simply some of the more commonly overlooked opportunities we see.
If you work with us, we may have talked about one (or multiple) of these items.
If you haven’t worked with us and you think you may be falling into one of these missed opportunities, reach out to us!
“What should we have for dinner tonight?”
Do you ever find yourself asking that question? It’s a dilemma that we face regularly, whether we’re cooking for ourselves, our families, or even planning a dinner party for friends.
In this article, we’re talking about cooking and investing. Why? We’ve found that most people are quite passionate about both food and money. Both require a blend of art and science, a touch of creativity, and a lot of planning.
Getting Started: Setting Your Goals
Before cooking can begin, you need to decide what you’re making. Are you in the mood for something quick and easy, or do you want to challenge yourself with a gourmet recipe? Do you have dietary restrictions or specific nutritional goals?
In the financial world, this is equivalent to deciding your goals. What do you hope to accomplish by investing? Are you saving for retirement, building an emergency fund, or aiming for a major purchase like a home? Just like in cooking, where the end goal determines the choice of dish, your investment goals will shape your financial strategy.
Selecting Ingredients: Asset Allocation
Once you’ve decided what you’re making, the next step in the kitchen is to gather the right ingredients in the right amounts. Are you baking a cake, roasting a chicken, or preparing a salad? Each requires a unique set of ingredients and proportions.
In investing, this step is called “asset allocation.” It’s one of the most important decisions an investor can make. Just as you wouldn’t want too much salt in your dish, you need to balance your investments appropriately. What combination of stocks, bonds, and cash makes sense for your situation?
Crafting the Recipe: Portfolio Construction
A recipe is a set of instructions for preparing a meal. It outlines the right ingredients in the right proportions, combined and cooked in a specific way. Similarly, portfolio construction involves selecting investments based on their expected return and risk characteristics and how they interact together.
Imagine you’re making a complex dish. Each ingredient needs to complement the others, creating a harmonious final product. Investments work the same way. A well-constructed portfolio is a blend of different assets that together aim to achieve your financial goals while managing risk.
Our US Stock Recipe: A Balanced Approach
When creating a US stock portfolio, one of Conrad Siegel’s main ingredients would be the S&P 500. This index represents a broad spectrum of large, established companies across various industries.
To add diversity and potential for higher returns, we might add a dash of smaller stocks (Mid Caps and Small Caps) and sprinkle in some Value stocks. Academic and financial market research has shown that there is a long-term premium associated with value and smaller stocks. These additions can enhance the flavor of your portfolio, much like how spices can elevate a dish.
The Influence of Culture: Global Diversification
One of the best parts about cooking is the influence that culture has on what ends up on our plates. Our culinary experiences are enriched by global ingredients, spices, and techniques. Similarly, your portfolio should have global exposure to benefit from opportunities outside your home market.
Our global portfolio follows a similar recipe. We add exposure to smaller stocks and value stocks and sprinkle in emerging markets. This diversification helps manage risk and can offer growth opportunities as different markets may perform well at different times.
The Importance of Fresh Ingredients
Just as fresher ingredients typically result in a better entrée, high-quality investments can enhance your portfolio’s performance. Staying informed about market trends, economic conditions, and company performance can help you make better investment choices.
Conclusion: The Art and Science of Cooking and Investing
Cooking and investing share many parallels. Both require careful planning, thoughtful selection of ingredients, and a balanced approach to achieve the desired outcome. Whether you’re crafting a delicious meal or building a robust portfolio, the right recipe can make all the difference.
So, next time you find yourself asking, “What should we have for dinner tonight?” remember that the principles you apply in the kitchen can also guide you in the financial world.