Market Alert November 9th, 2018:  The Elections, What Do They Mean?

As a firm that specializes in retirement planning, our two goals for you are:

  1. For you to have Financial Peace of Mind and
  2. 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.

  • Investors in Stocks Liked the Outcome of the Midterm Elections.
  • Oil Prices May Be Portending a Slowing Global Economy.

Over 50? Schedule a free retirement consultation with one of our financial advisors. We will help you to make the important financial decisions needed to create your personalized retirement plan.

  • Do you know if you have enough money to retire?
  • Do you have a plan for what to do when the next market crash comes?
  • 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 in the way that 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 or obligation, and we will part friends!

Investors in Stocks Liked the Outcome of the Midterm Elections.

Investors in the stocks on the S&P 500 index and the Dow Jones seem quite pleased with the outcome of the elections as they went up over 500 points the day after. As we have reported to you in the past, the stock market is not political, but it is anti-uncertainty. The more uncertain the times are, the more likely the market is to go down, and the more certain the times are, the more likely the market is to go up.

With the Senate in the hands of the Republicans and the House in the hands of the Democrats, to a great degree, it is likely that there will be gridlock. This means that not much is going to change over the next two years other than that there might be an escalation in the antagonism between the political parties.

The policies that the Trump administration has put in place are likely to stay in place for the next two years. Knowing this, companies can now plan their businesses with relative clarity and investors can invest in those companies with more confidence.

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 the next market crash?
  • 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?

Click here to reserve your spot at the next free retirement planning seminar.

Oil Prices May Be Portending a Slowing Global Economy.

Historically, when the global economy slows, less oil is used, and the lower demand tends to drive oil prices down. According to Bloomberg, dropping oil prices have been a reliable indicator of a slowing trend in economic activity.

US benchmark oil fell into a bear market last Thursday when prices fell by more than 20% since the recent peak. The price of West Texas Intermediate crude has declined for ten consecutive sessions, which is the longest stretch of declines since 1984, according to Dow Jones Market Data. The volatility in the stock market we saw on Friday owed a great deal to falling oil prices.

As Gilda Radner used to say “it just goes to show you, it’s always something!”

We are thankful that we have a sell strategy. Without it, we would find it very difficult to justify investing in the stock market at this time. We believe there is still upside, but we also believe that when the downside starts, it could be drastic.

Our strategy enables us to participate in the upside as long as it lasts; it is also designed to get us out with tolerable losses when the trend changes.

And it will.

Click here to listen to this week’s podcast and hear the following topics:

  1. Why Did The Dow Go Up 500 Points After Midterms?
  2. 18 Risks Faced In Retirement #10: Liquidity Risk
  3. Social Security Questions: How Working Affects Benefits
  4. A Buy Hold Disaster Story
  5. Estate Tip: The QTIP – A Trust For Your Spouse

As we look back at this year, there have been two 10% corrections in the S&P 500 index, and in both of those cases, we tested our sell signal. We are gratified that we did not sell and that our sell strategy parameters have served us well so far.

If you are not a client of Money Matters, we want you to be!  Let us worry about all this so that you don’t have to.

Over 50? Schedule a free retirement consultation with one of our financial advisors. We will help you to make the important financial decisions needed to create your personalized retirement plan.

  • Do you know if you have enough money to retire?
  • Do you have a plan for what to do when the next market crash comes?
  • 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 or obligation, and we will part friends!

Click here to listen to this week’s podcast and hear the following topics:

  1. Why Did The Dow Go Up 500 Points After Midterms?
  2. 18 Risks Faced In Retirement #10: Liquidity Risk
  3. Social Security Questions: How Working Affects Benefits
  4. A Buy Hold Disaster Story
  5. Estate Tip: The QTIP – A Trust For Your Spouse

Look at the chart below:

Do not get complacent.  Overconfidence is dangerous when it comes to investing.

While this year will most likely not be as good as last year, it is shaping up to be a good year. We will never become complacent, however. We must never let our guard down and never take the market for granted. It is when overconfidence sets in that the market is the most vulnerable.

With the market near all-time highs, this is no time to be complacent and assume that the market only goes up! The best time to plan ahead for the next market crisis is now!

As you can see in the chart below, the market can turn around very quickly and very unexpectedly. The 2008 bear market wiped out 12 years of gains in just 17 months. Many of you participated in that bear and the one in Y2K.

Clients who followed our lead were out of the Stock market during the great market crash of 2008.

We believe that the risk that we have today is different than anything we have had in history.

The hundreds of trillions of dollars of global debt put a significant strain on government’s ability to do anything about the next recession. In fact, we see all of this debt exacerbating the effects of any economic slowdown. The worst recessions that we have had around the world have mostly been the results of governments taking on too much debt.

Click here to listen to this week’s podcast and hear the following topics:

  1. Why Did The Dow Go Up 500 Points After Midterms?
  2. 18 Risks Faced In Retirement #10: Liquidity Risk
  3. Social Security Questions: How Working Affects Benefits
  4. A Buy Hold Disaster Story
  5. Estate Tip: The QTIP – A Trust For Your Spouse

It is our singular goal to keep our clients from becoming poor. 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.

Cheers!

Ken Moraif, CFP®, MBA