All Posts By

Cadence WM

Nov 08

Eight Ways to Get Estate Inheritances Right

By Blog
Life is complicated, but does passing money to your beneficiaries have to be also? In theory it shouldn’t, as all you want to specify is “when I die, give this much to these people”. That sounds so simple, yet when it comes time to create a process that would allow that to happen, a lot of picky little details get in the way. Getting any of them wrong increases the chances that your estate plans could go awry. Consider these eight ways to get your estate strategy correct: 1) The More Accounts and Institutions, the More Paperwork. Every account you…
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Oct 13

Ask Cadence: If I choose to take social security early and my benefits get reduced, will they stay reduced forever?

By Blog
They could, but it depends on what you did to reduce the benefits.  Most people know by now that if you take social security before you reach your full retirement age, which these days for most people is 66 to 67 years old, you will receive reduced benefits.  If you take benefits at age 62 and your full retirement age is 66, your benefits will be permanently reduced by 25%.  Every month after age 62 that you wait to take benefits sees those benefits get closer and closer to 100% of your full social security retirement benefits.  People who take…
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Sep 26

What The Future Holds For Stocks – It’s All About Price

By Blog
Let’s keep this simple. U.S. stocks by almost any measure that doesn’t obscure reported earnings are either at or very near record levels. Here’s a look at a couple valuation measures we’ve discussed in the past – the Shiller CAPE and the S&P 500/GDP. What’s immediately noticeable from both measures (shaded in blue) is that they are toward the top of their historical ranges, exceeded only by the tech bubble in 1999. What both of these charts don’t show however is what happens when we adjust for the above average corporate margins and below average economic growth that we’re observing…
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Sep 14

Ask Cadence: If the markets and economy are likely to struggle over the next few years, will my retirement plan be ruined?

By Blog
Not necessarily. For those who don’t understand where we are in the economic cycle and the current valuation levels of markets, there will likely be some very unpleasant surprises down the road. This is nothing new. For investors who were too aggressively positioned in 1999 and 2007, most of the progress they had made over years of investing was wiped out within months. This time probably won’t be any different for unsuspecting investors. However, by taking a more conservative approach and focusing on principal preservation, there will most likely be opportunities down the road to invest at much more reasonable…
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Aug 24

Are You Leaving Money on the 401(k) Table?

By Blog
Contributing to a 401(k) plan is good, right? Then contributing the maximum possible to a 401(k) is even better. However, there is one small mistake we see people making that can have a surprisingly big impact over time: hitting the maximum they can contribute before the final paycheck of the year. It may be best to illustrate the mechanics of this with an example. Consider someone making $125,000 per year, paid out as $5,208 gross twice per month. If that person decides to save 18% of his or her salary, he or she would contribute $938 every paycheck and would…
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Aug 08

The Monkey and the Volcano: A Cadence Fable

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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 own banana pie stand where he could spend his old age providing delight to others, just making and serving pie, passing the time in enjoyable conversation. He dreamed this every day as he foraged, and it made him happy. But he knew he would only get there if he grew big and strong…
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Jul 18

Ask Cadence: Should I wait to invest given all the uncertainty in the world today?

By Blog
Although the rationale for this is sound, waiting to invest can be tricky because it’s always difficult knowing when the time is right to start putting money to work. Usually the best time to get invested is when the world feels scariest. The economy is struggling, the stock market is down significantly, and it’s possible that the stability of your income and financial well-being is also in question making the decision to invest money that you feel you can’t afford to lose a tough one. For this reason, we feel it’s important to always stay invested in a strategy that…
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Jun 23

The Painful Trip Back – Lessons From 2000

By Blog
Being disciplined is hard. When we think about our own private lives, if we’re being honest, none of us have any trouble coming up with instances where we broke down and diverged from our plan. Whether around dieting, exercise, or chores, discipline can wane – hopefully for only short periods of time when it does. When it comes to investing however, losing our discipline around what we buy and at what price can have much more dire consequences than missing a daily workout. Just last month we discussed how long-term returns can get cut in half by getting caught up…
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Jun 06

Ask Cadence: Is it possible the rules of the markets have changed and that they can go up for longer than in the past?

By Blog
Anything’s possible, but it’s extremely unlikely that the rules of the game have changed. At the end of the day, asset prices only go as high as people are willing to pay for them. The definition of a bubble is when prices reach levels that don’t seem to make sense, yet people keep buying simply because they feel prices will continue to rise. Rationale for why values are going up gets thinner and thinner. At some point, investors realize that what they’re considering for purchase has an underlying value that’s much less than what the price reflects. Whether this is…
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May 15

How Expensive Is The Stock Market?

By Blog
We've incorporated our fair share of complicated charts and concepts into our letters over the months. This one, in our opinion, really keeps things simple. If we’re trying to figure out if the stock market is expensive, doesn't it really come down to affordability for most people? When we look at the average earnings of workers across America - $21.90 per hour - the stock market has never been less affordable. It currently requires 109 hours of work to buy the S&P 500 (assuming one could buy 1 unit of the index at its current level of approximately 2,390). This…
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