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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.

Is There a Bear at the Door?

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On March 22nd we sent a special edition of our monthly Cadence Clips entitled “Was January 26 the Bull Market Peak?” After that S&P 500 peak of 2,873, the index’s value closed at ~2,581 twice: on February 8th and April 2nd. From top to bottom, that’s around a -10% decline. That special edition went on to discuss the existing conditions, like the unhealthy amount of debt-fueled growth over the past nine years, the small number of large company stocks propping up the indices, and the smaller number of stocks making new highs versus those making new lows, which all point…

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Ask Cadence: If I am not invested in the stock market, am I missing out on these returns forever?

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Any investor who has not been 100% invested in the stock market since March 9, 2009 has missed out on some amount of stock market returns. However, everyone knows very few people should ever be 100% invested in the stock market. Therefore, we are going to miss out on some amount of returns during any period where the stock market outperforms other investment areas. Whether it’s the U.S. stock market or something else, there will always be an investment that outperforms what we own – this is an important concept for investors to grasp. If the risk of an investment…

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Ask Cadence: Where are the safe places to invest if I’m nervous about the stock market?

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As a reminder, there are no completely safe places to invest, as nearly all investments have the potential to lose value at times, but there are almost always some investments that are relatively safer than others. The first step in the process is to identify those places that are most expensive and therefore present the most risk of loss over longer holding periods. Currently those are the world’s stock markets, particularly the US stock market. The next step is to identify those places that offer more value from a risk/reward standpoint and that have a better chance of holding their…

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Ask Cadence: If the only way to earn a meaningful return on my investment is to take risk, how do I balance the different types of risk within my portfolio?

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The most important thing to understand when building an investment portfolio is that all investments worth considering can and most likely will lose money at some point. Unfortunately this is just how it works. The key is to make sure that the different components of a portfolio possess risks that are unique and somewhat uncorrelated. This way, we decrease the chance of any one type of risk doing significant damage to our investment nest egg. By keeping this approach in mind, we’re less likely to fall into the trap of chasing returns and building a portfolio with more loss potential than…

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The Epic Disconnect

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What we’re experiencing in the financial markets right now is unique while at the same time very similar to previous bull markets. Those contending that this time is different are correct. We’ve never had synchronized global monetary easing on the scale we’ve witnessed over the last few years. This is new, and without question one of the primary drivers of this epic bull market run. The liquidity created by central banks around the world has created the desired effect – inflation. The only problem is that it hasn’t translated into price inflation to the extent desired (by central bankers) which…

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What to Think of Interest Rates and Bonds

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Bubbles are dynamic and as a result, different each time. But one common theme amongst them has been the tendency for interest rates to play a role in their eventual demise. Looking back 30 years, there seems to be a causal relationship between rising rates and poor stock market performance. More times than not when the 24-month change in 10-year treasury rates spiked upward, stocks ran into trouble. Practically every sizable correction in stocks was preceded by an acute increase in interest rates. But rising rates don’t just signal possible trouble for stocks, they also mean there’s a current problem…

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Goals Are Bigger Than Short-Term Investment Returns

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This current bull market started in March 2009, making it the second longest bull market in investment history. You can just glance at a chart of the S&P 500 and see that bull markets, especially big ones, do eventually come to an end. What has been unusual about this particular bull market is not only the duration going on nearly 9 years now, but also the relatively low level of volatility we’ve experienced along the way. This part of the market cycle has a sinister way of lulling people into feeling like there’s less risk in the stock market than…

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Ask Cadence: Should I consider contributing to my employer-provided Roth 401(k)?

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Most employers, especially the medium and large-sized ones, provide some sort of retirement plan.  A large percentage of those are traditional 401(k)s, where you contribute pre-tax dollars into the plan, you do not pay any taxes on gains inside the plan, and then every single dollar you take out of the plan in the future is fully taxable.  Another well-known retirement account is the Roth IRA, which is almost the complete opposite of the 401(k).  Like 401(k)s, the growth inside Roth IRAs is not taxed, but unlike 401(k)s, post-tax dollars go in, you can’t save into them right out of…

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Eight Ways to Get Estate Inheritances Right

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

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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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