Unlocking Your Dream Home: Expert Tips on Securing a Mortgage in Retirement
Back to College-Building Your Dream Team: Lawyers, Accountants, and Partnerships for Financial Success
Back to College- Financial Literacy ep.1
Efficient Charitable Donations- Wealth Insights #3
What is the best way to donate to a non-profit? We use strategies to increase tax efficiency and get more funds to those who need them. This enables our clients to be more purposeful in their donations so they can make an impact to the causes that are important to them.
How To Prepare for Change- Wealth Insights #2
How do I financially prepare for the death of a parent?
How do I retire from my job?
What are the risks I face as I build wealth?
Life is full of change. We help client navigator difficult times, so they can focus on the things that matter most to them.
Our Most Important Work
Stocks’ Road Ahead
The calendar had barely flipped to 2022 and investors were reminded that even attractive long-term stock returns come with a cost: volatility. The S&P 500 Index fell nearly 10% from January 3 through January 27 amid fears that the Federal Reserve (Fed) will have to get a lot more aggressive to fight inflation, before staging a 4% rally over the last two days of the month to end January down 5%. After such a steady march higher in 2021, the dip may have caught some investors off guard.
For those whose anxiety levels may have risen a bit last week, here are some numbers that may provide reassurance:
- Even in positive years for the S&P 500, on average the index experiences a maximum peak-to-trough decline of 11%. This year’s max drawdown is now 9.8%.
- After a correction of 10-15%, the index has experienced an average one-year gain off the lows of 22% and has risen in 12 of the 13 one-year periods.
- The average stock market gain one year after the first Fed rate hike of an economic cycle has been 11%, with gains the past eight cycles dating back to 1983.
- When investor sentiment is most negative, as it was during the past two weeks based on the American Association of Individual Investors (AAII) investor sentiment survey, stocks have risen an average of 11% in the next year.
This data argues that stock investors should stay the course. But remember that gains in 2022 will likely be tougher to come by than in 2021. They may be more modest and happen later in the year, as is typical during midterm election years.
The good news is that an inflation peak may be near as the COVID-19 Omicron variant loses its punch. Slower, but still solid, economic growth this year will help cool inflation as Fed rate hikes take hold. We’re already seeing backlogs and bottlenecks start to clear. We expect more people to jump back into the labor force later this year, easing wage pressures. We may also get some help from lower oil prices, though that may have to wait for Russia-Ukraine tensions to die down.
These uncertainties make the road ahead for stocks tougher. But with U.S. consumers and businesses in excellent shape, the U.S. economy may grow 4% this year, well above the pace of the last decade. Corporate America is showing once again during fourth quarter earnings season that it is thriving with S&P 500 earnings poised to increase by more than 25% year-over-year.
_____________________________________________________________________________
Important Information
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of February 2, 2022.
Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.
All index data from FactSet.
This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
What is a “second opinion” of my portfolio?
We are often asked to provide “second opinions” on investment portfolios. Sometimes an investor has managed their own finances for years and is looking for a professional “tune up”. Other times they have been using an advisor and simply want the comfort of some extra due diligence.
Second opinions help to ensure proper investment selection, financial alignment, and reasonable fees.
In this video, Dean and Brock discuss the information they look for when conducting a “second opinion” analysis.
Roth vs Traditional IRA
“Should I choose a Roth IRA or a Traditional IRA.” This is one of the most common questions we hear from individuals who are saving for retirement. There are some important differences regarding when you pay tax and who is eligible.
The most important thing you can do is SAVE! Yes, you will be able to look back in 30 years and say definitively if a Roth or Traditional IRA was your best choice. Some of this will depend on forces that you can’t fully control. Things like tax law changes, your income in retirement, and the rate that you will draw upon your retirement savings. What you can control is your dedication to a savings program.
What the video above for a more complete discussion on Roth vs Traditional IRAs.
Big Bank or Independent Advisor?
There are a lot of places you can go to get financial advice.
So why choose a local, independent advisor vs. a “Big Bank” or National Chain?
In this video we discuss some important characteristics of our Independent Advisor business model.