Month: November 2019

As of fall 2019, the bull market was officially the longest on record, but this doesn’t stop skeptics from asking when it will end. And this leads to the question: How long will any market stay strong?

Most financial analysts use 20 percent thresholds to label bull or bear markets. A bear market begins, for example, when an index falls 20 percent from its peak.

So, as of this writing, we are in a bull market. The S&P 500 index is up more than 300 percent since its closing low on March 9, 2009.

But is it a bubble that will burst?

Market bubbles, such as the housing-market bubble that burst in 2008 and the dot-com bubble that burst in 1999, are fairly regular occurrences. They occur when an economy or market has become unbalanced due to a flawed outlook. And bursting bubbles typically hurt all investors, even those who do not own the inflating asset, because they can affect more than just the inflating asset. Recall that the housing-market bubble that burst in 2008 affected the broad stock market.

Although there are no clear asset-class bubbles today (equities are up broadly), there is concern that at some point the market will have to recalibrate and take a downturn. But we cannot know when that will happen.

How do you prepare, then? One option is de-risking with diversification. It cannot protect you from a decline in all markets, but stock and bond markets often perform differently, so diversifying into stocks, bonds, cash, and possibly even real estate and commodities may help protect you in a down market.

Remember, de-risking does not mean removing all equity risk from your portfolio, because equities play an important role in any portfolio by facilitating growth. The idea, if you are concerned, is to allocate more assets to less volatile asset classes, such as fixed income. Bonds tend to be much less risky than stocks.

For assistance with this diversification process, please contact my office. I’m here to help.

As December approaches, many of us give thought to getting our houses in order, and that includes our financial houses. Here are some things to look at as you “clean house.”

Review your financial accounts. Look at your bank accounts, retirement accounts, credit cards, and other financial accounts. Gather statements, performance reports, and any other documents that will provide information about the accounts.

Ask if your accounts still meet your needs. With this information in hand, ask if your accounts are still valuable. If not, should you consolidate some, or close them? Should you open others?

Update your account information. Ensure that your accounts have accurate contact and beneficiary information. If you haven’t changed your beneficiaries in some time, you may want to review them (and make all possible accounts transfer on death, or TOD, so they avoid probate in the event of your death).

Review your budget. How is your spending? If it is not on budget, determine why. Are you spending too much money on luxury items?

Review your debts. Are you overwhelmed with debt? If so, develop a strategy for keeping your spending on track and eliminating debt (perhaps by consolidating loans).

Consider estate planning. Estate planning isn’t just for the wealthy; everyone should have a will. If you don’t, get one. If you have an existing will, review it to ensure it still protects your loved ones in the manner you intended.

Contact a financial planner. For assistance with any of these items, please contact me. I can help you put a solid financial plan in place to head into 2020 with confidence.