2019

Jun 11

Retirement Uncertainties: Why Financial Planning is Necessary > Issue 3 > The Potential Pension Bomb

By Cadence WM Blog

Most American workers received pensions in past decades. When pensions started becoming more scarce, it forced Americans who had no real knowledge of saving and investing to manage their own money they would need to secure their retirements. By most accounts, this shift of responsibility has not worked out well for a large percentage of American workers. There are many current retirees with corporate and government pensions paying for part of their retirement, and there are also still a few companies offering future pensions along with most state and federal departments. That’s the good news. However, not all is rosy…

May 20

Retirement Uncertainties: Why Financial Planning is Necessary > Issue 2 > Healthcare Spending Is Increasing Faster Than the General Inflation Rate

By Cadence WM Blog

The changes to what we pay for the goods and services we buy do not increase by the same rate every year; some years they go up slowly, some years they jump up, and some years the cost of certain goods or services even goes down. However, the longer-term trend is that the cost of the goods and services we purchase to live our lives is increasing. For most items that historic increase is around 3% annually. However, healthcare costs have been rising much faster over the past 40 years, with many estimates falling in the 6% to 8%+ per…

May 06

Retirement Uncertainties: Why Financial Planning is Necessary > Issue 1 > Retirees’ expectations are based on a past that will probably not be the future

By Cadence WM Blog

The only certainty about the future is that it is uncertain. When it comes to retirement planning, identifying the uncertainties and their potential financial impacts are our best shots at protecting ourselves from those things that could prevent us from reaching our retirement goals. Researching the “top issues facing retirees” yields list after list of future uncertainties, everything from living too long, to the solvency of the Social Security system, to speculation around future asset prices. While we reviewed many of the issues facing retirees today, we saw some we thought important enough to highlight, but we also noticed some…

Apr 22

Either You Believe in Magic or You Believe in Math

By Cadence WM Blog

What we have been experiencing in financial markets the last few years has been truly mind-boggling. We would venture to say that nobody could have come even remotely close to forecasting the combination of events that have played out since the global financial crisis in 2008. Above average U.S. stock market growth with below average economic growth? No way. Foreign stocks being worth less ten years later? Not likely. More than $10 trillion in sovereign (governmental) bonds yielding less than 0%? To be clear, this means you pay the government to lend them money. That would be ludicrous. It will…

Apr 10

There Will Be A Downside To This Investment Cycle

By Cadence WM Blog

Since the US stock market bottomed after the Financial Crisis in March of 2009, large cap US stocks have returned around 15% per year. The vast majority of other investment categories have not enjoyed nearly the returns of the US stock market, however as that is the investing area that receives the most media attention, its behavior over the past ten years has shaped a lot of our expectations for what will happen going forward. Our brains have a tendency to assume the conditions to which we have grown accustomed will keep going, a tendency which has been labeled “recency…

Mar 25

What’s Changed Since December?

By Cadence WM Blog

Simply put, stocks have continued to rise in February while growth data has continued to weaken – fairly decisively. If all one cares about is investing in what’s currently going up, then this rally in stocks seems like a no-brainer. The only problem is that the preponderance of evidence suggests that this rally is the textbook bear market variety, which means it will likely change course just as quickly as it began. If one’s looking to generate fast losses, there’s really no better way. Our position on portfolio composition for the time being hasn’t changed. We will change it when…

Feb 19

The Monkey and the Volcano: A Cadence Fable Revisited

By Cadence WM Blog

While we don’t know whether or not the rumblings heard during the 4th quarter of 2018 were just more noise or the precursor of a much larger pyroclastic flow, we thought it may be a good time to revisit the Cadence Fable: The Monkey and the Volcano, originally published in August of 2017… Halfway up the slope of a volcano lived a monkey. Like his fellow monkeys, he spent the majority of his days picking and eating fruit off the trees growing on the side of the volcano. Unbeknownst to his friends, however, he dreamed of one day opening his…

Feb 11

What to Think of Interest Rates and Bonds – Revisited

By Cadence WM Blog

We wanted to revisit a blog post from exactly one year ago today that touched on why a rapid rise in interest rates matters for stocks. At the time – Feb 9, 2018 – interest rates had risen over 100% from their lows in 2016. Our point was that when interest rates, one of the key lubricants particularly in a highly indebted economy rise, it presents a strong headwind to continued growth and could serve to catalyze the changing of the business cycle. This dynamic could be even more pronounced in an environment where financial markets are extremely overvalued which…

Jan 08

Losses Get No Respect

By Cadence WM Blog

When it comes to investing, everybody thinks about progress in terms of returns. This makes sense since without them financial goals are much harder to achieve, but very little time is spent thinking about losses and the role they play in achieving (or not achieving) those longer-term returns. Even when looking at most financial plans – whether simplistically crude or detailed – usually there’s some assumption for returns achieved based on a pre-determined risk tolerance. Aggressive investors usually assume higher returns while those with a more conservative predisposition will assume lower, safer returns. We’ll address the fatal flaw of assuming…

Retirement Uncertainties: Why Financial Planning is Necessary > Issue 3 > The Potential Pension Bomb

Retirement Uncertainties: Why Financial Planning is Necessary > Issue 2 > Healthcare Spending Is Increasing Faster Than the General Inflation Rate

Retirement Uncertainties: Why Financial Planning is Necessary > Issue 1 > Retirees’ expectations are based on a past that will probably not be the future

Either You Believe in Magic or You Believe in Math

There Will Be A Downside To This Investment Cycle

What’s Changed Since December?

The Monkey and the Volcano: A Cadence Fable Revisited

What to Think of Interest Rates and Bonds – Revisited

Losses Get No Respect

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