Study Proves Aging a One-Way Process

As you may have already suspected, aging is not a reversible process. This was confirmed in a new study titled “Intercellular Competition and Inevitability of Multicellular Aging,” in which researchers concluded it’s impossible to halt the aging process in multi-cellular organisms like humans.1

Scientists have found a cellular mechanism that enables a reverse aging affect in mouse DNA, which also protects it from future damage.2 But alas, our cell system is different, and what works for one doesn’t always work for another.

This is also true for financial strategies. Some individuals are constantly on the lookout for the next big thing, hoping to invest early for strong rewards when a company grows. Others are more risk-averse, happy to make regular, automatic contributions to the same investments over the long haul. While each strategy may have its pros and cons, the important thing is to match strategy to investor within the context of their goals, risk tolerance and investment timeline.

Everyone needs a plan that helps address personal objectives — whether it’s determining how to invest as part of your overall financial strategy or finding the next big scientific discovery. We can help you devise a financial strategy, using a variety of investment and insurance products, based on your particular circumstances.

There are some places where the worlds of science and finance intersect, especially when it comes to big-dollar contributions. Microsoft founder Bill Gates recently invested $50 million in the Dementia Discovery Fund, a private fund specifically devoted to exploring outside-the-box ways to treat dementia.3

Other scientific studies are working to aid the aging process by repairing hearing loss. People generally become hard of hearing gradually due to overexposure to noise, damage to neuronal processes and/or the degeneration of auditory neurons — which do not regenerate once lost. Current studies are looking at ways to convert inner-ear stem cells into auditory neurons that could reverse deafness. Unfortunately, scientists have found that, while effective, this process also poses a significant cancer risk.4

A little closer to home, some studies are looking at whether muscle strength, which peaks by age 25, can be improved later in life. Nearly half of the muscle in our body disappears by age 80. One study compared four strength-training routines for people over age 60. The most effective routine was to train three times a week, inserting a low-intensity workout between two high-intensity workouts.5

From finances to personal health, we often feel at a loss to what we can control as we age. But there are things we can do to improve our chances of aging well. Although genetics play a part, eating healthy, staying active, keeping our brains challenged and remaining socially engaged with friends and family can help each of us become more resilient as we grow older.6

 

Content prepared by Kara Stefan Communications.

 

 

1 Leslie D. Monte. LiveMint.com. Nov. 1, 2017. “You will grow old, live with it.” http://www.livemint.com/Science/WeHZhePY2BkKI36txSdeGJ/You-will-grow-old-live-with-it.html. Accessed Nov. 22, 2017.

2 Ibid.

3 Bill Gates. GatesNotes. Nov. 13, 2017. “Why I’m Digging Deep into Alzheimer’s.” https://www.gatesnotes.com/Health/Digging-Deep-Into-Alzheimers. Accessed Nov. 22, 2017.

4 Todd B. Bates. Rutgers Today. Nov. 6, 2017. “Inner Ear Stem Cells May Someday Restore Hearing.” https://news.rutgers.edu/research-news/inner-ear-stem-cells-may-someday-restore-hearing/20171102#.WhXNS7aZOfV. Accessed Nov. 22, 2017.

5 Alex Hutchinson. The Globe and Mail. Nov. 2, 2017. “How should you train to retain muscle as you age?” https://www.theglobeandmail.com/life/health-and-fitness/fitness/how-should-you-train-to-retain-muscle-as-you-age/article36816684/. Accessed Nov. 22, 2017.

6 Debbie Reslock. The Oakland Press. Nov 3, 2017. “Do you have these skills to age well? Some strengths help us roll with the punches easier as we grow older.” http://www.theoaklandpress.com/lifestyle/20171121/do-you-have-these-skills-to-age-well-some-strengths-help-us-roll-with-the-punches-easier-as-we-grow-older. Accessed Nov. 22, 2017.

 

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Are You Suffering From Financial Stress?

Despite the strengthening economy and positive outlook, some people are still experiencing high levels of financial stress. Many are worried about meeting monthly expenses, with 30 percent reporting in a recent survey of over 1,000 people that concern over their financial situation keeps them up at night.1

A 2014 report by the American Psychological Association showed money has been the most common source of stress for Americans since 2007, followed by work, the economy, family responsibilities and health concerns.2

Financial stress is pervasive in that it can impact so many areas of your life, from sleep habits to interactions with friends and family to reduced productivity at work. Research has found a correlation between economic insecurity and increased complaints of physical pain, leading to additional health care spending and further financial woes.3

It’s one thing to be stressed out because you can’t find a job, but there are plenty of working Americans who are stressed out because of their occupation. According to CareerCast, some of the more stressful positions include public relations agent, event coordinator, broadcaster, newspaper reporter and taxi driver.4

Millennials, who represent about 25 percent of the U.S. population, report feeling the most financially related stress.5 Small wonder, considering so many are either unemployed after college or work part-time, low-paying jobs that sometimes don’t require higher education.

Fortunately, now that jobs are on the rise, employers are having to compete for quality workers. For recent college graduates, one of the most appealing benefits is a program that helps them pay down student loans.6

Regardless of generation, sometimes just working with a financial professional to develop a financial strategy can help ease your financial stress as you work toward financial independence.

 

Content prepared by Kara Stefan Communications.

1 Dave Shaw. MarketPlace. March 14, 2016. “The economy’s improving, but Americans’ economic anxiety persists.” http://www.marketplace.org/2016/03/11/economy/anxiety-index/economys-improving-americans-economic-anxiety-persists. Accessed Aug. 19, 2016.

2 Suzanne Woolley. Bloomberg. Feb. 4, 2015. “This Is the Most Stressed-Out Person in America.” http://www.bloomberg.com/news/articles/2015-02-04/this-is-the-most-stressed-out-person-in-america. Accessed Aug. 26, 2016.

3 Association for Psychological Science. Feb. 22, 2016. “Experiencing Financial Stress May Lead to Physical Pain.” http://www.psychologicalscience.org/index.php/news/releases/experiencing-financial-stress-may-lead-to-physical-pain.html. Accessed Aug. 22, 2016.

4 CareerCast.com. 2016. “The Most Stressful Jobs of 2016.” http://www.careercast.com/jobs-rated/most-stressful-jobs-2016. Accessed Aug. 19, 2016.

5 Kent E. Allison. The Huffington Post. April 27, 2016. “Financial Stress Surging Among Millennials.” http://www.huffingtonpost.com/kent-e-allison/financial-stress-surging-among-millennials_b_9787658.html. Accessed Aug. 19, 2016.

6 Jenny Che. The Huffington Post. Sept. 22, 2015. “This Firm Will Help Employees Pay Off Their Student Loans.” http://www.huffingtonpost.com/entry/pwc-student-loans_us_56019508e4b08820d91a58a6. Accessed Aug. 22, 2016.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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The Importance of Investment Mix

11As individuals progress from young adults to the age of retirement, their investment mix traditionally changes to meet their needs. This is typically a reflection of a person’s goals, tolerance for risk and investment timeline. Generally, as the time nears to tap into investments for retirement income, the mix of assets becomes more conservative.

However, some may see the situation a little differently these days, as the recession taught various generations different lessons. Older generations that lost money — or at least lost ground in their savings contributions — may now be more likely to hold a larger share of equities than in the past in an effort to accumulate enough savings before retirement.

However, many members of the younger generations, who struggled to find jobs while watching their parents lose them, may have come away with a different perspective: save and spend conservatively. Recent research into the financial behaviors of young millionaires found this to be true even though they had amassed a fortune at such a young age. The study found that some millionaires under 40 are even more conservative than baby boomers in that they favor holding more cash, are less likely to invest in stocks and more prone to putting money in alternative investments (e.g., gold, hedge funds).1

We are all influenced by a variety of factors, including how our parents saved and spent money, the economic and stock market upturns and declines we’ve lived through and our own career paths and financial success. That’s why we believe you can’t always choose investments based solely on your age or your goals. We can help you develop a financial strategy that takes into account all your personal experiences. What investments you select and how they work together can be just as important as your timeline and capacity for risk. Please remember that all investing involves risk, including the potential loss of principal.

Speaking of risk, while cash often seems like a safe bet, it’s important to remember the potential impacts of inflation may cause cash to lose value in the long run. A sustained period of low interest rates on fixed income financial products can create the same issue, which is why many pre-retirees and even retirees are holding more stocks in their portfolios today than in previous generations.2 For some, losing money may be an even bigger concern than running out of it.

In 2016, we’ve seen a good bit of market volatility. In this type of environment, we believe that a diversified portfolio tends to work well. During the first half of the year, diversified, global portfolios delivered both higher returns and less volatility than all-equity portfolios.3

Diversified portfolios can deliver more stable returns over time, as well as the ability to match your risk tolerance with an investment mix. Instead of actively managing a portfolio and pondering whether to buy or sell based on market performance, you may want to consult your financial professional about a well-diversified mix. Such diversification may help to mitigate risk and takes advantage of periods of out-performance without the stress, fees and taxes that may be associated with trying to time the market. In the end, attempts at market timing tend to generate smaller returns than what the overall market does over a long period of time.4

Your account mix may be important, too. A new study that compared saving strategies for retirement accounts over the next 30 years found that most individuals, both young and old, would be best served by a mix of assets in both traditional (401(k)/IRA) and Roth accounts.5

Content prepared by Kara Stefan Communications.

1 Jonnelle Marte. The Washington Post. July 5, 2016. “How millionaires under 40 manage their money.” https://www.washingtonpost.com/news/get-there/wp/2016/07/05/how-millionaires-under-40-manage-their-money/. Accessed Aug. 12, 2016.

2 Christine Benz. Morningstar. Jan. 21, 2016. “6 Retirement Asset-Allocation Pitfalls to Avoid.” http://news.morningstar.com/articlenet/article.aspx?id=737073. Accessed Aug. 12, 2016.

3 Jeffrey L. Knight. Columbia Threadneedle. July 18, 2016. “Diversification strikes back in 2016.” https://blog.columbiathreadneedleus.com/diversification-strikes-back-in-2016?cid=GPemail. Accessed Aug. 12, 2016.

4 Fidelity. Aug. 3, 2016. “The pros’ guide to diversification.” https://www.fidelity.com/viewpoints/guide-to-diversification. Accessed Aug. 12, 2016.

5 ThinkAdvisor. July 11, 2016. “Mix Roth, Traditional 401(k)s for Better Outcomes.” http://www.thinkadvisor.com/2016/07/11/mix-roth-traditional-401ks-for-better-outcomes?t=the-retiree%3Fref%3Dchannel-other-topics&slreturn=1471042680&page_all=1. Accessed Aug. 12, 2016.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Stock Market Performance During Election Years

There’s only so much a U.S. president can do to improve the performance of the stock market, but that doesn’t keep people from connecting the highs and lows with the person sitting in the Oval Office.

Regardless of party, the markets have traditionally improved during election years. Eighteen of the 22 election years since 1928 have yielded positive returns.1 The average return of the S&P 500 is 12.6 percent when the incumbent is up for re-election. However, in years like 2016, when the president is on the way out, the S&P 500 actually drops an average of 2.8 percent.2

Another variable to consider is who is in control of Congress during a presidential election year. One market analyst crunched the data to reveal that when Republicans controlled Congress, the S&P 500 averaged 19.7 percent. In years with a split or Democrat-controlled legislature, the S&P 500 averaged 7.6 percent and 3.2 percent, respectively.3

Election years pose unique challenges. One political party is always quick to point out the negative effects the other may have on the nation’s financial situation. The winner of the election may not determine how stocks perform, but some market observers have theorized the market can actually predict the outcome of a presidential election.

If the stock market posts gains in the three months before Election Day, the candidate from the political party already in the White House has a very high probability of winning. In contrast, the party trying to retake the Oval Office has a better shot if stocks tumble.4

Clearly, politics do play a role in influencing the stock market. However, it is important to not make financial decisions based on election predictions and historical returns of election years, as they are not an indicator of future results. It’s also important to work with a financial professional to develop a financial strategy designed to help you work toward your particular goals. Please give us a call if we can help you with that.

Content prepared by Kara Stefan Communications.

1 Columbia Threadneedle. Spring 2016. “Politics, Stocks and Your Portfolio.” https://www.investor.columbiathreadneedleus.com/content/columbia/pdf/SPRING-2016_NEWSLETTER.PDF. Accessed Aug. 5, 2016.

2 Merrill Lynch. March 10, 2016. “How Presidential Elections Affect the Markets.” https://www.ml.com/articles/how-presidential-elections-affect-the-markets.html. Accessed Aug. 5, 2016.

3 William Watts. Marketwatch. Dec. 29, 2015. “2016 predictions: What presidential election years mean for stocks.” http://www.marketwatch.com/story/2016-predictions-what-presidential-election-years-mean-for-stocks-2015-12-29. Accessed Aug. 5, 2016.

4 Adam Shell. USA Today. July 26, 2016. “Stocks could predict who wins White House.” http://www.usatoday.com/story/money/markets/2016/07/25/stocks-predict-who-wins-white-house/87440314/. Accessed Aug. 5, 2016.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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The State of Real Estate Investment Trusts (REITs)

“The average investor has no idea what’s going on, but this is a big shift.”1

That’s what Robert Gordon, the head of New York brokerage firm Twenty-First Securities, said about the reclassification of real estate investment trusts from the financial services sector into their own individual category.

It’s not often that an investment makes this shift, but that’s exactly what is happening this fall. Some stock exchanges are getting a new category — real estate — which real estate investment trusts, better known as REITs, will fall under.2

If you’re not familiar with a REIT, it is a type of security that invests in real estate through purchasing, managing and developing real estate properties. It works similar to a mutual fund, enabling even small individual investors to acquire shares of real estate ventures such as apartment complexes, hospitals, office buildings, warehouses, hotels and shopping malls. REITs are required to pay out at least 90 percent of their dividends, on which investors must pay income taxes for their share.3

Because REITs rely on the health of the real estate market, they did not fare so well during the recession and real estate market decline. But in recent years, they’ve improved with the help of foreign money pouring into domestic real estate, stronger rental markets and the growing economy.4

Low rates are one reason why REITs have outperformed recently. The less it costs to borrow money, the higher the demand for real estate, which can increase the value of REIT holdings.5 In fact, U.S. REITs listed on the stock exchange outperformed the S&P 500 during the first half of 2016.6

It’s important to consider any investment within the context of your own goals, risk tolerance, investment timeline and the composition of your overall portfolio. We will only provide investment advisory services after we have assessed your financial situation. If you’re interested in a comprehensive review of this nature, we’d be happy to schedule a time to discuss this with you further.

Content prepared by Kara Stefan Communications.

1 Michael Wursthorn. The Wall Street Journal. July 11, 2016. “Wealth Adviser Daily Briefing: When the S&P 500 Breaks Out REITs, Investors May Get a Tax Bill.” http://blogs.wsj.com/moneybeat/2016/07/11/wealth-adviser-daily-briefing-when-the-sp-500-breaks-out-reits-investors-may-get-a-tax-bill/. Accessed July 28, 2016.

2 Than Merrill. The Street. Feb. 14, 2016. “REITs Likely to Gain Ground in 2016.” https://www.thestreet.com/story/13435112/1/reits-likely-to-gain-ground-in-2016.html/. Accessed July 28, 2016.

3 Mark P. Cussen. Investopedia. June 2, 2016. “REITs: How Long Can They Stay This Hot?” http://www.investopedia.com/articles/investing/060216/reits-what-you-need-know-about-them-right-now.asp. Accessed July 28, 2016.

4 Diana Olick. CNBC. June 27, 2016. “How the UK’s exit benefits US REITs.” http://www.cnbc.com/2016/06/27/how-the-uks-exit-benefits-us-reits.html. Accessed July 28, 2016.

5 Konrad Putzier. The Real Deal. July 27, 2016. “Here’s why REIT stocks are on the rise.” http://therealdeal.com/2016/07/27/heres-why-reit-stocks-are-on-the-rise/. Accessed July 28, 2016.

6 REIT.com. July 11, 2016. “REITs Outperform S&P 500 in 2016 First Half.” https://www.reit.com/media/nareit-media/reits-outperform-sp-500-2016-first-half. Accessed July 28, 2016.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Pension Payments and Retirement Income Trends

It used to be that only surviving soldiers were guaranteed an income to enjoy in their later years, a concept introduced during the first century B.C. by rulers of the Roman Empire. The idea of companies helping workers put money away for retirement didn’t exactly catch on with the rest of the workforce until the 19th century.

In the mid-1800s, some larger cities offered disability and retirement benefits to police, firefighters and other public sector employees. It wasn’t until 1875 that American Express created the first private pension plan in the U.S. to provide income for retired workers and those with disabilities.

At that point, the concept spread rapidly, with about 200 pension plans adopted by larger corporations by 1926. Defined benefit plans grew to cover 26.3 million private sector workers by 1970, which represented 45 percent of all private sector employees.1 Then, those numbers began to drop with the introduction of the defined contribution plan.

Today, only 15 percent of private sector workers and 75 percent of state and local government workers participate in a traditional pension plan. 2 According to the U.S. Bureau of Labor Statistics, there are a couple of options for how to receipt pension benefits. One is through a series of monthly payments over time. The second is a lump sum paid out all at once.

In the end, the amount of money may end up being about the same, if you consider that the lump sum invested for a conservative return (say 4 percent) would be the equivalent to a lifetime of payments over the same number of years it was invested, given assumptions about life expectancy and investment returns.3

A lump-sum payout gives retirees a bit more control over the distribution of those assets, but the tradeoff may be a greater risk of running out of money. If you’re interested in ways to take a portion of your retirement assets and benefit from the guarantee of a reliable income stream, we can share strategies on how to do so using insurance products, such as annuities.

Interestingly, the more people understand their financial options, the better off they tend to be. New research indicates that workers who know more (as measured by financial wellness assessments) tend to have higher contribution rates to employer-sponsored retirement plans.4

Fortunately, the idea of educating workers on financial matters is spreading quickly. Today, more than 80 percent of U.S. employers offer some type of wellness program and offering financial wellness programs is on the increase. There’s even better news: Financial wellness is also associated with better sleep, reduced stress and higher productivity.5

If you don’t participate in a company-sponsored retirement plan, you may in the near future. A recent survey found that 21 percent of corporate HR professionals report their companies now automatically enroll current employees in their sponsored retirement plans (although workers have the ability to “opt out” if they want). While auto-enrolling new employees is not a new trend, automatically enrolling current employees who have not been participating in the plan now is.6

Content prepared by Kara Stefan Communications.

1 Liz Davidson. Workforce.com. June 21, 2016. “The History of Retirement Benefits.” http://www.workforce.com/2016/06/21/the-history-of-retirement-benefits/. Accessed July 15, 2016.

2 William J. Wiatrowski. U.S. Bureau of Labor Statistics. June 2016. “You’re getting a pension: What are your payment options?” http://www.bls.gov/opub/btn/volume-5/pdf/youre-getting-a-pension-what-are-your-payment-options.pdf. Accessed July 15, 2016.

3 Ibid.

4 The National Association of Plan Advisors. May 31, 2016. “Report: Contributions Climb with Financial Wellness.” http://www.napa-net.org/news/managing-a-practice/industry-trends-and-research/report-contributions-climb-with-financial-wellness/. Accessed July 15, 2016.

5 Lou Carlozo. U.S. News & World Report. May 19, 2016. “How Companies Invest in Financial Wellness.” http://money.usnews.com/investing/articles/2016-05-19/how-companies-invest-in-financial-wellness.

6 John Iekel. National Tax-deferred Savings Association. July 7, 2016. “Nuanced Changes in Retirement Benefits, Study Finds.” http://ntsa-net.org/News/Browse-Topics/Inside-NTSA/Article/ArticleID/6470. Accessed July 15, 2016.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice.

All investments are subject to risk including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Any references to protection benefits or steady and reliable income refer only to fixed insurance products, not securities or investment products.  Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.  If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Financial Strategies: CDs, Stocks and More

In some way or another, there’s risk involved with any form of investment.

Staying away from high-yield investments may prevent you from losing a significant amount of money, but then you may run the risk of not having enough retirement assets to reach your goals. Today, about 30 percent of individual investors’ liquid financial assets are sitting in bank accounts and money market funds.1

For some, “playing it safe” may be an option to put a portion of your assets, but first, you need to identify your individual goals and objectives, tolerance for risk and time horizon.  Then you will want to design a financial strategy around those factors. Not all investments hold the same risks. It is important to work with a financial advisor to determine the appropriate risk tolerance for your situation.

Over the past eight years, the interest rate on money market accounts has declined significantly, from 4.5 percent in 2007 to about 0.1 percent today.2 There’s been talk about the Fed raising interest rates, but the recent Brexit vote may put that action on hold even longer. 3

The direction of interest rates impacts most options for cash holdings, including money market accounts, short-duration bonds and certificates of deposit (CDs). While CDs are considered a conservative financial vehicle, you still trade liquidity for yield. The longer the term, the higher the yield, but the rates today may not justify tying up cash for very long. Individuals may wish to consider a CD laddering strategy to take advantage of changing interest rates in the future. A typical CD ladder consists of several different “rungs,” each representing a CD with a different maturity.4

Generally, bonds operate in much the same way, trading higher yields for longer terms. For some investors, today’s intermediate-term bonds may offer the potential for earnings without some of the additional risks that may be associated with longer-term maturity bonds. Please note that bond obligations are subject to the financial strength of the bond issuer and its ability to pay. Before investing, you should consult with your financial advisor to understand the risks involved with purchasing bonds.

One thing that’s true for most people is that it’s better to start planning early. Those who wait until the last minute to start thinking seriously about retirement will have a harder time accumulating the necessary assets to allow them to retire with the lifestyle they desire.

A report from BlackRock issued at the end of 2015 revealed that the average retirement portfolio of Americans age 55 to 65 held only $136,200. Historically, people in their 50s and 60s were more concerned with capital preservation than with capital accumulation,5 but today, that’s not always the case.

After all, owning stocks isn’t the big risk, it’s selling them when they’ve declined. 6 There are strategies to help mitigate this risk as well. For example, diversifying holdings through different types of financial and insurance products, and a combination of traditional tax-deferred retirement accounts and Roth IRAs may be used to help mitigate investment risk.

Content prepared by Kara Stefan Communications.

1 David A. Levine. The New York Times. July 1, 2016. “The Goldilocks Strategy for Prudent Investors.” http://www.nytimes.com/2016/07/02/your-money/the-goldilocks-strategy-for-long-term-investment.html?_r=1. Accessed July 12, 2016.

2 Bryan Borzykowski. CNBC. Feb. 24, 2016. “The big risk looming in your money market fund.” http://www.cnbc.com/2016/02/24/beware-you-may-lose-cash-in-your-money-market-fund.html. Accessed July 12, 2016.

3 Ann Saphir. Reuters. June 24, 2016. “Brexit vote means Fed stays put.” http://www.reuters.com/article/us-britain-eu-fed-analysis-idUSKCN0ZA0R6. Accessed Aug. 9, 2016.

4 Fidelity. June 1, 2016. “Is it time to look at CDs?” https://www.fidelity.com/viewpoints/investing-ideas/time-for-investing-in-cds. Accessed July 12, 2016.

5 Jeff Reeves. Forbes. July 6, 2016. “Why Boomers Should Show Stocks More Love.” http://www.forbes.com/sites/nextavenue/2016/07/06/why-boomers-should-show-stocks-more-love/#53bc0d683620. Accessed July 12, 2016. (Paste link into browser to access article.)

6 Jeff Reeves. Forbes. July 6, 2016. “Why Boomers Should Show Stocks More Love.” http://www.forbes.com/sites/nextavenue/2016/07/06/why-boomers-should-show-stocks-more-love/#53bc0d683620. Accessed July 12, 2016. (Paste link into browser to access article.)

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.  If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Too Much Positivity can Equal a Negative

The mind is a powerful tool. It can protect, justify, trick and even make good things happen by its sheer will. A good example is the placebo effect, a biology-based phenomenon with proven positive results.1

But there are limits to what a positive mindset can truly accomplish. For example, a 2016 survey by asset manager Schroders found that American investors may be expecting unrealistically high returns. The average stock market yield globally is 3.8 percent, but investors over the age of 35 think they can achieve 8.4 percent. Millennials are even further off the average mark, anticipating returns of 10.2 percent.2

Simply believing your investments will pay off won’t make it happen. As financial advisors, we’re here to help you analyze your personal financial situation and create strategies utilizing a variety of investment and insurance products that can help you work toward your financial goals.

The positive outlook consumers have developed after the recession could be a good sign for our nation’s spending and continued economic rise. However, this optimism can actually be a negative factor if it leads to an irrational confidence in investment choices.3

According to the Wells Fargo/Gallup Investor and Retirement Optimism Index, even after the volatile swings of this year’s first quarter, investor optimism regarding the stock market was pretty high. Most investors (81 percent) said they “rode out” the volatility and did not make changes to investments, while only 4 percent reported selling stocks in response to market changes.4

That’s a good sign, because doing nothing can be one of the most difficult actions when an investment starts losing money. Human nature is hard-wired to fight or flee; people may want to liquidate for cash, trade for something better or just blame somebody. Part of that is fueled by the enormous amount of information available to investors, which makes it seem like there’s always somewhere else we can go for higher returns. But studies show that investors who overtrade tend to earn mediocre returns once all of those transaction costs are factored in.5

Every year, the Employee Benefit Research Institute conducts a Retirement Confidence Survey to gauge how confident Americans feel about their retirement income prospects. In 2016, the survey found that only 28 percent lack confidence in their financial preparations for retirement, with 28 percent feeling very confident and 43 percent somewhat confident. Among retirees, the survey found that 39 percent are very confident (up from 18 percent in 2013) that they have enough money for a comfortable retirement.6

Content prepared by Kara Stefan Communications.

1 NPR. Jan. 26, 2016. “How Meditation, Placebos and Virtual Reality Help Power ‘Mind Over Body’.” http://www.npr.org/sections/health-shots/2016/01/26/464372009/how-meditation-placebos-and-virtual-reality-help-power-mind-over-body. Accessed July 8, 2016.

2 Suzanne Woolley. Bloomberg. June 16, 2016. “Wanted: Big Returns, Low Risk. (And Millennials? They Want 10.2%).” http://www.bloomberg.com/news/articles/2016-06-16/wanted-big-returns-low-risk-and-millennials-they-want-10-2. Accessed July 8, 2016.

3 Shreenivas Kunte. CFA Institute. April 21, 2016. “The Behavioral Continuum: What’s the Best Behavioral Bias?” https://blogs.cfainstitute.org/investor/2016/04/21/the-behavioral-continuum-whats-the-best-behavioral-bias/. Accessed July 8, 2016.

4 Wells Fargo. March 10, 2016. “Wells Fargo/Gallup: Stock Market Jitters Drive Investor Confidence Down; Majority Ride out the Volatility.” https://www.wellsfargo.com/about/press/2016/gallup-stock-market-jitters_0310/. Accessed July 8, 2016.

5 Fidelity International. December 2014. “Behavioural finance: Overconfidence.” http://www.fidelity.com.au/insights-centre/education/behavioural-finance-overconfidence/. Accessed July 8, 2016.

6 EBRI. March 2016. “The 2016 Retirement Confidence Survey: Worker Confidence Stable, Retiree Confidence Continues to Increase.” https://www.ebri.org/pdf/surveys/rcs/2016/EBRI_IB_422.Mar16.RCS.pdf. Accessed July 8, 2016.

This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.  If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Regret over Brexit?

In the aftermath of the United Kingdom’s decision to leave the European Union, financial commentators have predicted all kinds of fallout, including Scotland’s secession, generational disputes and uprisings, a cross-border exodus of worker talent and companies, economic recession, deficits in government budget and pension fund payouts and a real estate crisis.

Although there are benefits to living in an integrated global economy, a downside is when one nation experiences a drop in the markets, the consequences could spread far beyond its borders.1

Some of the U.K.’s problems could impact investors, including those all the way across the globe in America. We are watching how this situation unfolds, and in the meantime, if you have any financial concerns, we are here to help you address them.

Fortunately, the financial news isn’t all negative. University of Pennsylvania finance professor Jeremy Siegel believes Brexit will create plenty of buying opportunities for American investors, projecting U.S. stocks could rise 10 to 12 percent by the end of 2016.2 Other analysts were surprised there was less of an immediate sell-off due to Brexit than expected, particularly in the credit markets.3

Still others postulate whether the exit will actually happen, given the multitude of complex issues, the widely anticipated negative impacts and the fact that many British citizens now say they doubt the U.K. will leave the EU despite the referendum vote.4

It’s difficult to imagine a scenario in which a citizen vote of that magnitude would not be implemented. With a parallel to many of the current political and economic debates going on in the United States, immigration policies and trade agreements hang in the balance. As time passes, these issues will slowly be addressed by new leadership, but the effects could be extensive and long lasting. Should the negative economic impacts wear on the British populace, they may find themselves regretting their perceived independence.5

Only time will tell, but as some social media commenters have observed: You Brexit, you buy it.

Content prepared by Kara Stefan Communications.

1 Peter Vanham. Knowledge@Wharton. June 30, 2016. “The Case for ‘Regrexit’: Why Britain Won’t Really Leave the EU.” http://knowledge.wharton.upenn.edu/article/case-regrexit-britain-wont-really-leave-eu/. Accessed July 1, 2016.

2 Knowledge@Wharton. June 29, 2016. “Jeremy Siegel: The Impact of the Brexit Vote on Markets.” http://knowledge.wharton.upenn.edu/article/jeremy-siegel-the-impact-of-the-brexit-vote-on-markets/. Accessed July 1, 2016.

3 Katie Linsell. Bloomberg. July 1, 2016. “A Week Later, Credit Investors Are Shrugging Off Brexit Anxiety.” http://www.bloomberg.com/news/articles/2016-07-01/a-week-later-credit-investors-are-shrugging-off-brexit-anxiety. Accessed July 1, 2016.

4 BBC.com, July 1, 2016. “Brexit: ‘Most would not change’ vote on EU, poll suggests.” http://www.bbc.com/news/uk-politics-uk-leaves-the-eu-36689608. Accessed July 1, 2016.

5 Jacob Funk Kirkegaard. Peterson Institute for International Economics. June 27, 2016. “After Brexit: Chaos and Buyer’s Remorse?” https://piie.com/blogs/realtime-economic-issues-watch/after-brexit-chaos-and-buyers-remorse. Accessed July 1, 2016.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.  If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Where Do We Stand as a Country?

263If there’s one phrase that’s entered the mainstream lexicon as the 2016 election approaches, it’s “Let’s make America great again!”1

Every president, regardless of party, vows to make the country better in some way, but as a whole, has America lost ground?2 Are we really not great anymore?

In the big picture, our country is still relatively new. Many world powers had been around for centuries before the U.S. was colonized. But to put the rapid growth we enjoyed in perspective, it may be easier to look at things on a smaller scale.

For example, you could say our nation’s history is similar to the booming start-up Birchbox. This company made great strides in its early years, with its clear business model catered to consumers’ discoveries of new beauty products. However, the challenge now is to sustain that growth once it hits its mid-life crisis in the business lifecycle.3

The same can be said for young athletes, particularly in individual sports like golf or tennis. A new talent arises, hungry and fearless. He or she may be able to compete at a high level and defeat far more experienced veterans. However, after spending more time on the professional tour, competitors will become more familiar with the strengths and weaknesses in his or her game.4

This creates an interesting parallel with individual investment strategies. Sometimes you may buy into an investment and the holding soars right out of the gate. But eventually its performance could be tempered by market and economic forces. This is natural; no investment is immune. One key criterion is how well your investment choices can weather the good and the bad times.5 That’s where we can offer assistance. We can help you stay focused on your long-term goals and work with you to design a specific plan using a variety of insurance and investment products that help you work toward your desired financial future.

When you compare the U.S. in a historical sense, we’re really just starting to hit middle age. Of course we’re going to hit rough patches and lose ground according to some metrics; it’s only natural. Our older cities are now reaching the age where reinforcement and replacement of infrastructure is needed, and some of our policies may no longer be aligned with modern society.6 No matter who you vote for in November, there will be changes implemented that hopefully will keep the U.S. on an upward trajectory.

Content prepared by Kara Stefan Communications

1 Conor Friedersdorf. The Atlantic. June 15, 2016. “The Presidents Who Made America Great.” http://www.theatlantic.com/politics/archive/2016/06/where-donald-trump-fits-among-the-leaders-who-made-america-great/486890/. Accessed June 23, 2016.

2 Karsten Strauss. Forbes. May 30, 2016. “The World’s Most Competitive Countries 2016: U.S. No Longer No. 1.” http://www.forbes.com/sites/karstenstrauss/2016/05/30/the-worlds-most-competitive-countries-2016-u-s-no-longer-no-1/#3564677e3fea. Accessed June 23, 2016.

3 Ranjay Gulati and Alicia DeSantola. Harvard Business Review. March 2016. “Start-Ups That Last.” https://hbr.org/2016/03/start-ups-that-last. Accessed June 23, 2016.

4 ATPworldtour.org. June 18, 2016. “Zverev Dethrones Federer in Halle, Sets Mayer Final.” http://www.atpworldtour.com/en/news/halle-2016-saturday-federer-zverev. Accessed June 23, 2016.

5 Dmitriy Fomichenko. Los Angeles Times. June 19, 2016. “7 important financial steps to take in your 30s.” http://www.latimes.com/business/la-fi-retirement-savings-20160618-snap-story.html. Accessed June 23, 2016.

6 International Monetary Fund. June 22, 2016. “Article IV Consultation with the United States of America: Concluding Statement of the IMF Mission.” http://www.imf.org/external/np/ms/2016/062216.htm. Accessed June 23, 2016.

This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the complete loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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