FINANCIAL FOCUS – What Should You Look for in an Annual Financial Review?

Come by June 23rd to find out about SEO For Real. No Magic Needed

Join Connecting Atlanta on LinkedIn and Facebook.

Given the complexities of the investment world, you might consider working with a financial professional to help you move toward your goals, such as a comfortable retirement. You’ll want to establish good communication with whomever you choose, and you should meet in person at least once a year to discuss your situation. At these annual reviews, you’ll want to cover a variety of topics, including these:

  • Your portfolio’s progress – Obviously, you will want to discuss how well your investments are doing. Of course, you can follow their performance from month to month, or even day to day, by reviewing your investment statements and online information, but at your annual meeting, your financial professional can sum up the past year’s results, highlight areas that have done well or lagged, and show you how closely your portfolio is tracking the results you need to achieve your long-term goals.
  • Your investment mix – Your mix of investments – stocks, bonds, government securities and so on – helps determine your success as an investor. But in looking at the various investments in your portfolio, you’ll want to go beyond individual gains and losses to see if your overall mix is still appropriate for your needs. For example, is the ratio of stocks to bonds still suitable for your risk tolerance? Over time, and sometimes without you taking any action, this ratio can shift, as often happens when stocks appreciate so much that they now take up a larger percentage of your portfolio than you intended – with a correspondingly higher risk level. If these unexpected movements occur, your financial professional may recommend you rebalance your portfolio to align it more closely with your goals and risk tolerance.
  • Changes in your family situation – A lot can happen in a single year. You could have gotten married, divorced or remarried, added a child to your family or moved to a new, more expensive house – the list can go on and on. And some, if not all, of these moves could certainly involve your financial and investment pictures, so it’s important to discuss them with your financial professional.
  • Changes in your goals – Since your last annual review, you may have decided to change some of your long-term goals. Perhaps you no longer want to retire early, or you’ve ruled out that vacation home. In any case, these choices may well affect your investment strategies, so it’s wise to discuss them.
  • Changes in the investment environment – Generally speaking, it’s a good idea to establish a long-term investment strategy based on your individual goals, risk tolerance and time horizon, and stick with this basic strategy regardless of the movements of the financial markets or changes in the economy. Still, this doesn’t mean you should never adjust your portfolio in response to external forces. For instance, if interest rates were to rise steadily over a year’s time, you might want to consider some changes to your fixed-income investments, such as bonds, whose value will be affected by rising rates. In any case, it’s another thing to talk about during your annual review.

These aren’t the only elements you may want to bring up in your yearly review with your financial professional – but they can prove to be quite helpful as you chart your course toward the future.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

marques-young

Advertisements

FINANCIAL FOCUS – How Can Women Make Financial Progress?

Come by March 15th to find out about Capturing Capital – How to Acquire it, Apply it and Manage it

Join Connecting Atlanta on LinkedIn and Facebook.

On March 8, we observe International Women’s Day. This year’s theme is “Press for Progress,” and events around the world will celebrate women’s advancements in the political, social and cultural arenas. But right here in the United States, women still face barriers to their financial progress. If you’re a woman, you need to recognize these challenges – and respond to them.

So, what are the key obstacles to financial security for a woman? Probably the first thing that comes to mind is the gender wage gap: Women generally earn around 80 cents for every dollar men earn, according to the U.S. Census Bureau.

But women also face other threats to their financial security. For one thing, they are far more likely than men to take time away from the workforce to raise a family – and time away means smaller Social Security payments and significantly lower balances in 401(k) plans and other retirement accounts. And women’s roles as caretakers don’t end when their children are grown – in fact, women are twice as likely as their male siblings to end up caring for an elderly parent, according to a Princeton University study.

What, then, can you do to help ensure a comfortable retirement and achieve your other financial goals? Here are a few suggestions:

  • Take full advantage of your employer’s retirement plan. If your employer offers a 401(k) or similar retirement plan, take full advantage of it. Invest as much as you can afford each year, and every time you get a raise, increase your contributions. At the very least, put in enough to earn your employer’s matching contribution, if one is offered.
  • Invest for the long term. Some evidence shows that women may be more conservative investors than men. But if you want to reach your long-term goals, you will need to consider some growth-oriented investments in your portfolio, factoring in your risk tolerance and time horizon. You may want to consult with a financial professional about the best way to invest for the long term.
  • Maximize your Social Security. If your spouse is the higher earner, you may want to consider how you can use this disparity to your advantage when you collect Social Security. Specifically, you may be eligible for Social Security benefits based on your spouse’s earnings and Social Security record. You’ll want to consult your tax advisor before making any moves.
  • Protect yourself from long-term care costs. More than two-thirds of nursing home residents are women, according to the National Center for Health Statistics. And

the median rate nationwide for a private room in a nursing home is over $97,000 per year, according to the Genworth 2017 Cost of Care Survey. Medicare generally pays very little for long-term care, so if you ever need these services, you’ll have to find other ways to pay for them. A financial professional can suggest some ideas.

As a woman, you face special financial challenges, and striving to overcome them will be a lifelong activity. But it’s worth the effort.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

marques-young

FINANCIAL FOCUS – How Can You Improve Your Financial Fitness This Year?

If one of your New Year’s resolutions is to get healthier, you may already be taking the necessary steps, such as improving your diet and increasing your exercise. Of course, physical fitness is important to your well-being – but, at the same time, don’t forget about your financial fitness. Specifically, what can you do to ensure your investment situation is in good shape?

Here are a few “healthy living” suggestions that may also apply to your investment portfolio:

  • Build endurance – Just as exercise can help build your endurance for the demands of a long life, a vigorous investment strategy can help you work toward your long-term goals, such as a comfortable retirement. In practical terms, this means you will need to own some investments with the potential to provide long-term growth. These are the investments that, ideally, you can hold on to for decades and eventually reap the benefits of capital appreciation. Of course, growth-oriented investments, such as most types of stocks, will rise and fall in value over the short term, and there’s no guarantee of profits, or even preserving principal. But if you choose wisely, and you’ve got the patience and discipline to hold on to your investments through the market’s ups and downs, you may well be rewarded.
  • Maintain an ideal “weight” – You can help yourself stay healthy by maintaining your ideal weight. This can be challenging – as you know from the recently finished holiday season, it’s easy to put on a few extra pounds. And, just as inadvertently, your portfolio can tack on some unneeded weight, too, in the form of redundant investments. Over time, you may have picked up too many similar investment vehicles, resulting in an overconcentration, or “flabbiness,” that can work against you, especially when a market downturn affects the asset class in which you’re overloaded. So, you might be better off liquidating some of your duplicate, or near-duplicate, investments, and using the proceeds to help broaden your investment mix.
  • Get proper rest – Many studies have shown that we need adequate rest to stay alert and healthy. In your life, you’ve probably already found that if you over-tax your body, you pay a price in your overall well-being. If you look at your investment portfolio as a living entity – which, in a way, it is, as it certainly provides life to your goals and aspirations – then you can see that it, too, can be weakened by stress. And one of the main stress factors is excessive trading. If you’re constantly buying and selling investments in an attempt to boost your returns, you may rack up hefty fees, commissions and taxes – and still not really get the results you wanted. Plus, if you’re frequently moving in and out of different investments, you’ll find it hard to follow a unified, long-term strategy. So, confine your trading to those moves that are really essential – and give your portfolio a rest.

To enjoy your life fully, you’ll want to take care of your physical and financial health – and, as it turns out, you can make similar types of moves to help yourself in both areas.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

marques-young

FINANCIAL FOCUS – International Investing: Still a Journey to Consider

Columbus Day is observed on October 9. And while it may be true that Leif Erikson and the Vikings beat Columbus to the New World, Columbus Day nonetheless remains important in the public eye, signifying themes such as exploration and discovery. As an investor, you don’t have to “cross the ocean blue,” as Columbus did, to find opportunities – but it may be a good idea to put some of your money to work outside the United States.

So, why should you consider investing internationally? The chief reason is diversification. If you only invest in U.S. companies, you might do well when the U.S. markets are soaring, as has happened in recent years. But when the inevitable downturn happens, and you’re totally concentrated in U.S. stocks, your portfolio will probably take a hit. At the same time, however, other regions of the world might be doing considerably better than the U.S. markets – and if you had put some of your investment holdings in these regions, you might at least blunt some of the effects of the down market here.

Of course, it’s also a good idea to diversify among different asset classes, so, in addition to investing in U.S. and international stocks, you’ll want to own bonds, government securities and other investment vehicles. (Keep in mind, though, that while diversification can help reduce the effects of volatility, it can’t guarantee a profit or protect against loss.)

International investments, like all investments, will fluctuate in value. But they also have other characteristics and risks to consider, such as these:

  • Currency fluctuations – The U.S. dollar rises and falls in relation to the currencies of other countries. Sometimes, these movements can work in your favor, but sometimes not. A strengthening dollar typically lowers returns from international investments because companies based overseas do business in a foreign currency, and the higher value of the U.S. dollar reduces the prices, measured in dollars, of individual shares of these companies’ stocks. The opposite has happened in 2017, when the weaker dollar has helped increase returns from international investments.
  • Political risks – When you invest internationally, you’re not just investing in foreign companies – you’re also essentially investing in the legal and economic systems of countries in which those companies do business. Political instability or changes in laws and regulations can create additional risks – but may also provide potentially positive returns for investors.
  • Social and economic risks – It is not always easy for investors to understand all the economic and social factors that influence markets in the U.S. – and it’s even more challenging with foreign markets.

U.S. markets are now worth less than half of the total world markets, and growth in the rest of the world is likely to keep expanding the number of global opportunities. You can take advantage of that global growth by putting part of your portfolio into international investments, including developed and emerging markets.

In any case, given the more complex nature of international investing, you’ll want to consult with a financial professional before taking action. If it turns out that international investments are appropriate for your needs, you should certainly consider going global.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
Email: marques.young@edwardjones.com
Member SIPC

marques-young

5 Tips to Recapture Your Wealth

Come by September 23rd and find out How To Start From Scratch and Quickly Package, Position & Profit From Your Passion, Knowledge & Expertise

Join Connecting Atlanta on LinkedIn and Facebook.

Did you know that many American’s transfer away between $2,000,000 and $5,000,000 of their wealth over a lifetime.  Yes, millions according to U.S. News and World Report.

Could you be one of them?

The truth is we will all transfer away wealth but we all have the opportunity to recapture a good chunk of that if we know the rules of the game.

After 20 years of working in almost every capacity in the financial industry, I have learned one important thing:  the rules of the game are not taught to us.

Why?  I will let you draw your own conclusions, but hope these points will help you make better financial decisions and allow you to recapture some of your hard-earned money.

First, what are the major wealth transfers in someone’s financial life:  taxes, fees paid to financial firms and the cost educating college students.

Here are few tips that could help you recapture that money:

  1. If you are invested in mutual funds, STOP until you know the costs. According to this benchmark Forbes article: The Real Costs of Owning a Mutual Fund, an average fund can have up to 2.5% – 3.25% of internal costs. Compounded over time can equal a lot of money. That is why, according to a Dalbar study, the average equity mutual fund investor underperformed the S&P 500 by a margin of 3.66% in 2015.  If you factor in buying and selling at the wrong times it should be no surprise the average retail investor underperforms the market by over 6%.
  2. Your typical stockbroker is not your friend but your fiduciary always works in your best interest. Most people do not know there are two different standards with which advisors do business.  This funny video will explain the difference in less than 30 seconds.  Afterwards, ask your advisor.
  3. Colleges act like businesses and there is a practice in the industry known as enrollment management that should change the way you think about planning your student’s education. With the average cost ranging from $24,385 for public school to $73,286 for elite colleges annually, a student taking longer than four years to graduate (and the average student loan debt per student of $37,0000) must focus more on SAVING ON THE COST of college than saving for college.  The college planning process has changed, and families need a new approach to recapture and lower their costs.  If you have two kids you very well could pay $150,000 to $250,000 for their education hoping they graduate in four years.  See if this new approach to college planning makes sense to you:  Know before you go, a new approach to college planning.
  4. Is your CPA a tax preparer or a tax planner? Think about it, most good CPAs are focused on saving you money today so they look good and will get your repeat business next year. How to tell if your CPA is a good one from this Forbes article: Red flags, how to know your CPA is working for you or not.
  5. Paying an advisor 1% or more to manage your money is a loser’s game. Most families don’t know all of the services an advisor should be providing and what is the true value.  According to this Vanguard study, a great advisor will help you potentially net about 3% in additional returns.  Now that is a deal, but so often most firms do not provide the additional services a family deserves.

Hopefully, you have found something in this post that will change your financial life so you can spend and enjoy more of your money!

If you want to learn more, please feel free to schedule a complimentary 30-minute call to discuss your situation.  Schedule Your Call.

Article written by STUART CANZERI
You can reach Stuart at (404) 477-1770 or canzeri@peachtreefg.com

STUART CANZERI