Market Alert January 13, 2019: If It Quacks Like a Duck…
As a firm that specializes in Retirement Planning, our two goals for you are:
- For you to have Financial Peace of Mind and
- For Your Money to Last As Long As You Do.
Our investment philosophy of Buy, Hold, and SELL! is designed to give us Unlimited Upside with a Tolerable Downside.
Despite the Rally That We Have Seen in the S&P 500 Index over the Last Two Weeks, We Are Not Convinced.
Several indicators that tend to happen in Bear Markets of the S&P 500 Index and recessionary times in the United States are happening, and the rally we have seen over the last two weeks in the S&P 500 Index may be normal Bear Market behavior. None of these indicators are one hundred percent accurate, but if you put them all together, it does paint a concerning picture in our view.
We have seen oil prices fall dramatically over the last few months, and historically, this is a reflection of global economic slowdowns that have led to recessions and Bear Markets.
Longer-term interest rates are down significantly from their peak in October despite the Federal Reserve telling us that they are going to raise interest rates. We interpret this to be that the bond market is saying that interest rates in the future will be lower than they are today. This is called an inverted yield curve and every recession in the last 50 years has been preceded by an inverted yield curve.
We saw the 50-day moving average go below the 200-day moving average of the S&P 500 Index, which is called the Death Cross. The Death Cross has preceded every Bear Market.
We have seen historic trading days both on the upside and downside in the Dow and the S&P 500 Index. As we have reported to you, huge up and down trading days happen most often in Bear Markets.
We all know that history does not predict the future, but we also know that history can teach us a lot so that we can prepare for the future. Time will tell us whether we are in fact in a Bear Market. Our job for our clients is to get them out of harm’s way when we see danger ahead. We will never shirk from this responsibility.
All we can say is that we are so glad we had our Buy, Hold, & SELL! strategy in place. Without it, we would be having sleepless nights AND losing money.
Our strategy enabled us to participate in the upside as long as it lasted, and it got us out of equities with tolerable losses when the trend changed.
By the way, if you have friends, associates, or family members that are still invested in equities, please send them our way. They may be exposed to severe financial losses if this turns out to be a terrible Bear Market.
- Are We In A Bear Market?
- 18 Of The Risks Faced In Retirement #18: Public Policy Risk
- Spousal Social Security Questions
- 2008 Market Behavior After We Sold
- Estate Tip: Get Your Will Done!
It is a very weird dynamic when you are out of equities, and they are going up because you may feel badly, and when equities are going down, you may feel like cheering. Doing the right thing doesn’t always feel good, but it is still always the right thing to do.
If you are not a client of Money Matters, we want to visit with you! Let us worry about the financial stuff so that you don’t have to.
- Do you know if you have enough money to retire?
- Do you have a plan for what to do in a Bear Market?
- What are 5 strategies that you can use to reduce your income taxes?
- How do you plan for your retirement cash flow?
- What should you do to maximize your Social Security benefits?
- Are you diversified the way you should be?
We would love to review your retirement plan with you and see if we can help you. If we can help you, that’s terrific, if not, that’s fine too. Either way, there is no charge no obligation, and we will part friends!
I would like to invite you to come to one of our seminars. They are designed for those of you who are retired or retiring soon, and they are free.
At the free retirement seminar, we will answer these burning questions:
- How do I protect my retirement from a Bear Market?
- How do I avoid three basic “pitfalls” of retirement distribution planning?
- Am I on track to be able to retire?
- When should I take Social Security? 62? 66? 70?
- Am I diversified the way I should be?
- How much can I afford to spend during my retirement?
- How can I fight inflation?
- How do I determine how much risk is appropriate for me?
- Do I take my pension or a lump?
- How do I avoid having 85% of my social security taxed?
- Should I rollover my 401(k)?
- How do I reduce my income taxes in the future?
It is our singular goal to keep our clients from becoming poor. There is nothing more important to us than that. Preserving the wealth that they have built is job number one for us. I encourage you to join the Money Matters family!
I believe that avoiding large losses is the single most important thing that we should be concerned about as investors.
Perhaps you were given a package by your employer. Perhaps you sold an asset and want to know how to properly invest the proceeds. Perhaps you inherited money and want to keep it safe and grow it if you can. Perhaps you just want a second opinion. These are all reasons for you to take advantage of all the resources that we at Money Matters have to offer you.
We want to help you to achieve your retirement goals.
Thank you for subscribing to this newsletter. I hope it finds you and yours in good health and spirits.
Ken Moraif, CFP®, MBA