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We routinely publish news, information and insights to keep our clients informed while also deepening their understanding of a variety of wealth management topics.

The Mathematics of Negative Returns – Why Avoiding Large Losses Matters

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“Buy low, sell high”.  Everyone’s heard of that one.  In fact, we’ve probably all heard it so much we no longer have to think about the math behind it, we just *know* that means you’ve made money.  There are some things you don’t even have to think about any more, you just feel them.  “Your average income tax rate is not the same as your marginal income tax rate”.  That one requires a little more thought, but yes, it makes sense; only the amount of taxable income that falls in the highest marginal bracket is taxed at that rate; the…

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Don Those Earmuffs!

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“Americans can always be trusted to do the right thing once all other possibilities have been exhausted.” – Quote often ascribed to Winston Churchill If there’s one thing most can feel good about these days, it’s the fact that the process of trying “all other possibilities” to keep corporations and the economy afloat is in full swing, which in turn probably means we’re that much closer to getting to a viable long-term solution that benefits most. As touched on in last month’s letter, the “right thing” will likely only come after all these other easier, less painful possibilities have been…

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Don’t Let the Possible Overshadow the Probable

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We have written many times how when it comes to planning and investing, human brains are the biggest hindrances to the owners of those brains. The possibility of large investment gains is so seductive, especially with financial news programs showcasing stocks that have absolutely taken off and investors who have made obscene amounts of money from large moves. Even our friends and acquaintances at times seem eager to share the bets they’ve made that paid off. It’s easy to think of the possibility of large gains if enough money were put in the right place. However, the financial news programs…

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Stoking Wealth Inequality – Enough is Enough

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For years we’ve been raising the issue of the systematic increase in wealth inequality in America. Whether monetary policy from the Fed or crony capitalism in Washington, the end result has been a widening gyre between the haves and the have-nots. Although there are very specific reasons for some of the protests taking place around the country today, wealth inequality is an overarching cause of much of the angst. What’s most unfortunate about this is that we didn’t just wake up to the highest level of wealth inequality since the Great Depression this morning. It’s been bad and getting worse…

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The Cost of Panic Revisited

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We had a piece in the September 2013 Cadence Clips called “The Cost of Panic”.  In it, we showed how investors who panicked and deviated from their investment plans when stock prices dropped from 2007 to 2009 caused irreparable harm to their wealth.  We have certainly seen a shock to global stock markets this year, with the potential for more losses to come.  As of this writing, many asset categories have bounced off their recent lows giving investors an opportunity to breathe a bit.  Many are asking themselves if now would be a good time to get more aggressive, while…

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Ask Cadence: When Will Stocks Look Attractive Again?

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When we look back 100 years at the relationship between the size of the stock market and the underlying economic fundamentals either by way of gross domestic product (GDP) or the amount of “stuff” that corporations produce (Gross Value Added), there are two things we can learn. First, stocks tend to rise with economic output. Makes perfect sense. Corporations do well, people do well, the economy does well, stock prices go up. The second observation however, which is far more important to investor performance over time, is that stock prices tend to rise faster than economic output when times are…

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Well, That Escalated Quickly

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In four weeks, stock markets have given back more than three years-worth of gains. For our number-oriented readers, that equates to losses accumulating 40 times faster than gains. As the expression goes; “risk happens fast”. If the month of March has taught investors one thing, it’s that things can go from completely peachy to chaotically crappy with the blink of an eye. As we’ve been reminding our clients over the months, the ability for this to happen increases dramatically in a system that is historically overextended in debt, valuation, speculation, greed, complacency and complexity. There is no question that Covid-19…

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The Coronavirus Wake-up Call

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If the latest data using the best meteorological methods available suggests there’s a storm coming and one takes actions to prepare, does that qualify as panic? One of the things we’ve noticed over the years in raising flags about the risks embedded in markets is that those who question the narrative are quickly criticized and labeled as worrywarts, fear mongers, or worse. This tendency has reached a fever-pitch lately with stocks bubbling up even further and the introduction of the Coronavirus. The use of the word “panic” as a pejorative has become commonplace similar to how most use the term…

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SECURE Act

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On December 20, 2019 the President signed into law the Setting Every Community Up for Retirement Enhancement Act (the SECURE Act). The new law is intended to expand opportunities for individuals to increase their retirement savings. Some of the changes give people more flexibility and others, less so. We’ll start with the changes that will impact the most people first and work our way down. A new start date for Required Minimum Distributions (RMDs) from IRA’s and retirement plans The SECURE Act raises the age after which you must begin taking RMDs from 70 ½ to 72. This is nice…

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Financial Planning in Turbulent Times

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The world most of us were born into included headlines in the morning papers (which were from the night before), headlines in the evening papers, an hour block of local and national news, and then late night local news to round it all out before the cycle began again.  There were some news radio stations during the day, but mostly on AM radio, and mostly ignored.  That’s almost all the headline time and space that needed to be filled.  Sure there were some deeper dives being taken on a regular basis, like Sunday morning political shows or “60 Minutes”, and…

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