How Much Money Do You Need to Retire?

How much money do you need to retire? That’s about as personal a question as, “What do you look for in a spouse?” or “What is your dream job?” The answer is different for everyone.

So are questions about when you want to retire, how you want to retire (suddenly or gradually) and where you want to retire. There are vast combinations of these and many other variables that serve to make the style and level of retirement different for every individual -- even within the same household.

Americans are retiring at a rate of 10,000 per day, which means a lot of people need retirement planning advice.¹ Financial services firms like ours develop relationships with neighbors and friends in our local community to offer personalized guidance and advice on financial matters. If you’re pondering how much money you may need to retire, please come and see us. Not only can we help you with that assessment, we create financial strategies through the use of insurance and investment products to help you work toward your retirement goals.

Fidelity recently conducted a survey that yielded wildly divergent responses in terms of how much money people think they need to retire. For example, 25 percent think they will need to have saved two to three times their annual salary during their last year of full-time work, while many financial advisors say it’s more like 10 years’ worth of salary saved. Overall, 74 percent of Americans underestimate how much they will need for a comfortable retirement.²

It’s important to keep in mind that issues may arise even if you’ve saved an appropriate amount for your household by the time you retire. Some circumstances -- such as the unexpected death of one spouse before the other -- could expose the need to replace a lost source of income. This is a possible circumstance where buying a life insurance policy, even long after your children have grown up and are on their own, may still be a part of your overall financial strategy, depending on your personal circumstances. At a minimum, one of the two Social Security benefits the couple was receiving will stop when one spouse dies. A life insurance payout can help augment any lost Social Security or pension benefits to help a surviving spouse maintain his or her current standard of living throughout retirement.³

While some retirement factors are personal, others may be cultural in nature. The most current available data shows that in the U.S., the average white family has more than $130,000 in retirement savings while the average African American household has only $19,000. Over time, disparities in income and personal wealth have an even more dramatic impact: By the time they enter their 60s, whites have accumulated 11 times more in savings than African Americans -- on average at least $1 million more in wealth.⁴

Unequal pay and career opportunities also may impact a woman’s ability to save enough for retirement. To complicate matters further, women tend to live longer. A couple estimating how much they need to retire may make the assumption that they’ll need, for example, 25 years of retirement income. The husband might pass away after 15 years while the wife lives another 15 years on her own. However, their income plan may not reflect a loss of income sources once the husband dies nor increased expenses the surviving wife may incur in her later years of life.⁵

If you’re interested in estimating about how much money you may need to save each year, try out an online retirement calculator, like this one provided by the U.S. Financial Industry Regulatory Authority (FINRA).⁶ You also can contact us to schedule a more in-depth retirement analysis.

Content prepared by Kara Stefan Communications

¹ Insured Retirement Institute. 2016. “Boomer Expectations for Retirement 2016.” https://www.myirionline.org/docs/default-source/research/boomer-expectations-for-retirement-2016.pdf. Accessed April 28, 2017.

² Lee Barney. Plan Sponsor. March 6, 2017. “Most People Think They Will Need a Paltry Amount for Retirement.” http://www.plansponsor.com/Most-People-Think-They-Will-Need-a-Paltry-Amount-for-Retirement/?fullstory=true. Accessed April 28, 2017.

³ Jamie Hopkins. Forbes. April 27, 2017. “Why Life Insurance Is Essential for Retirement Planning.” https://www.forbes.com/sites/jamiehopkins/2017/04/27/why-life-insurance-is-essential-for-retirement-planning/#78b4ee9f31cd. Accessed April 28, 2017.

⁴ Rodney Brooks. Chicago Defender. April 28, 2017. “The African American Retirement Planning Gap.” https://chicagodefender.com/2017/04/28/the-retirement-crisis-facing-african-americans/. Accessed April 28, 2017.

⁵ LeAnn Bjerken. Spokane Journal of Business. April 27, 2017. “Women face unique challenges in retirement planning.” https://www.spokanejournal.com/local-news/women-face-unique-challenges-in-retirement-planning/. Accessed April 28, 2017.

⁶ FINRA. 2017. “Retirement Calculator.” http://apps.finra.org/calcs/1/retirement. Accessed April 28, 2017.

Life insurance policies are contracts between your client and an insurance company. Life insurance product guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

Financial calculators are designed as informational tools to help you estimate answers to common financial questions. They are not intended to predict future returns or results, nor do they represent the performance of any specific investment or product.

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.

Investment Advisory Services offered through Global Financial Private Capital, LLC.

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Will Power be Restored to Coal Industry?

In March, President Donald Trump signed executive orders to rescind several regulations that were in place to limit pollution from mining and burning coal.¹ The administration’s goal is to revive the coal mining industry, but the downside is coal emissions release more greenhouse gases than natural gas.²

These recent actions serve as a reminder that nearly every sector, no matter how reliable it has been in the past, goes through cycles of uncertainty. The utilities sector, for example, has long been recognized as a steady provider of dividend payments and thus is a popular instrument for retirement income.³

Like any industry, it has its ups and downs, which can affect an investor’s returns and income stream. That’s why we believe it’s generally a good idea to remain diversified, even within a historically reliable sector, to help mitigate risk. As financial professionals, 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. Please remember that investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

In 2016, natural gas (34 percent) surpassed coal (30 percent) as the country’s No. 1 source of energy for the first time in U.S. history. Nuclear power accounted for a 20 percent share of electricity generation. Renewable power sources, such as wind and solar power, are the fastest-growing power sources today, but they still represent only 8 percent.⁴

As for the future of coal, the CEO of the country’s third-largest coal mining company believes the industry will see most of its future gains not from policy changes, but from demand by China and South Korea. Last fall, these countries agreed to stop importing coal from North Korea, which was a boon for the U.S. industry.⁵

The CEO for the U.S.’s largest public utility says his company closed many of its coal plants because it could produce energy at a lower cost with fewer facilities -- not because of regulations. He also reiterated the company’s commitment to reducing carbon emissions by 60 percent by 2020. Having been raised near coal plants in Philadelphia, with coal cinders floating frequently through the air, he said he appreciates the great strides that have been made in clean air.⁶

While clean energy sources have a way to go before they become the more affordable choice, many experts believe that eventually will happen. When it does, it’s unlikely consumers or corporations would choose a more expensive option to fuel their electricity.

Content prepared by Kara Stefan Communications

¹ CNBC. March 28, 2017. “Coal can be more profitable and efficient going forward, expert says.” http://www.cnbc.com/2017/03/28/coal-can-be-more-profitable-and-efficient-going-forward-expert-says.html. Accessed April 25, 2017.

² Ryan Handy. Houston Chronicle. Jan. 16, 2017. “Natural gas surpasses coal as fuel for power production.” http://www.houstonchronicle.com/business/article/Natural-gas-surpasses-coal-as-fuel-for-power-10861176.php. Accessed April 25, 2017.

³ Kira Brecht. U.S. News & World Report. Feb. 5, 2016. “Generate Income and Play Defense With Utility Stocks.”   http://money.usnews.com/investing/articles/2016-02-05/generate-income-and-play-defense-with-utility-stocks. Accessed April 25, 2017.

⁴ Ryan Handy. Houston Chronicle. Jan. 16, 2017. “Natural gas surpasses coal as fuel for power production.” http://www.houstonchronicle.com/business/article/Natural-gas-surpasses-coal-as-fuel-for-power-10861176.php. Accessed April 25, 2017.

⁵ Michael Bastasch. Daily Caller. 2017. “Mining CEO Expects A Record Year For Coal Exports.” http://dailycaller.com/2017/04/14/mining-ceo-expects-a-record-year-for-coal-exports/. Accessed April 25, 2017.

⁶ Jonathan Matisse. Knoxville News Sentinel. April 19, 2017. “TVA CEO: Coal plants not reopening under Trump.” http://www.knoxnews.com/story/money/business/2017/04/19/tva-ceo-coal-plants-not-reopening-under-trump/100641238/. Accessed April 25, 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.

Investment Advisory Services offered through Global Financial Private Capital, LLC.

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Prospects for Growth in 2017

Some researchers believe the U.S. economy has a healthy outlook: The GDP growth rate is in the ideal 2 percent to 3 percent range, unemployment continues to abate and inflation remains in check.¹

The U.S. Bureau of Labor Statistics expects 88 percent of all occupations will experience growth by 2020, with the biggest increases coming in health care, personal care and construction. It also predicts that jobs requiring a master’s degree will grow the fastest.²

Aside from the potential of lower taxes, more jobs and infrastructure spending, the U.S. economy has another reason for optimism: American manufacturing, industrial production and trade sectors appear to be emerging from their recession. Economists anticipate that industrial sector growth will continue throughout 2017.³

Furthermore, consumer and chief executive officer confidence levels have improved considerably since the November U.S. election. The current expectation for more fiscal stimulus is expected to translate into greater spending and stronger economic growth.⁴

In periods of positive economic news such as this, people sometimes get caught up in “the good times” – planning vacations and finding other ways to spend newly acquired discretionary income. As financial professionals, we want to help you create a long-term financial strategy now, so that you feel confident in your financial future.

Clearly, no one knows where the market will go in 2017, but according to investment analysts at Charles Schwab, income growth may be poised to continue in the immediate future. Technology, health care and financial sectors are among those that could outperform in 2017.⁵ One reason is that the U.S. is entering an era of deregulation. President Trump has already started to roll back regulations put in place during the Obama administration, which issued more than 3,750 final rules and regulations during its eight-year tenure.⁶

If you find yourself with some extra funds you would like to put away for retirement, call us for assistance on allocating them to your financial plan.

Content prepared by Kara Stefan Communications

¹ Kimberly Amadeo. The Balance. March 15, 2017. “US Economic Outlook: For 2017 and Beyond.” https://www.thebalance.com/us-economic-outlook-3305669. Accessed March 21, 2017.

² Ibid.

³ Rick Rieder. BlackRock. Jan. 13, 2017. “2 Reasons the U.S. economy Should Fare Better in 2017.” https://www.blackrockblog.com/2017/01/13/us-economy-fare-better-2017/. Accessed March 21, 2017.

⁴ Ibid.

⁵ Brad Sorenson. Charles Schwab. March 16, 2017. “Schwab Sector Views: How Should Investors Look at Health Care Now?” http://www.schwab.com/public/schwab/nn/articles/Sector-Views. Accessed March 21, 2017.

⁶ Alejandro Chafuen. Forbes. Jan. 3, 2017. “The U.S. Economy In 2017: Welcome Higher Growth.” https://www.forbes.com/sites/alejandrochafuen/2017/01/03/the-u-s-economy-in-2017-welcome-higher-growth/#5ef2fcb938fb. Accessed March 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.

Investment Advisory Services offered through Global Financial Private Capital, LLC.

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Trends in the ETF Market

In recent months, there has been a recent movement out of actively managed investments into passively managed instruments such as exchange-traded funds. Globally, ETFs gained more than $270 billion in 2016.¹

An ETF is a single investment vehicle that tracks all of the securities within an index, a commodity, bonds or a group of assets like an index fund. It’s similar to a mutual fund, but an ETF’s price will fluctuate throughout the day as it trades like a common stock on a stock exchange. A basic ETF generally charges a lower fee than most mutual funds because it is not actively managed.²

With lower fees and expense ratios, plain index fund ETFs generally outperform mutual funds. However, there is a growing market of Smart Beta ETFs that charge relatively higher fees.³ Smart Beta ETFs also follow an index but may use a different weighting strategy to focus on specific technical and/or fundamental factors such as size, value, momentum, volatility and profitability.⁴ In 2016, Smart Beta ETFs gained more than $40 billion in new assets in the ETF market.⁵

One reason the ETF format has gained popularity is its ability to focus in certain sectors or investor objectives. For example:

• Fixed income ETFs are designed for investors who may seek a potentially greater yield in the wake of rising interest rates.⁶
• Volatility-managed ETFs expose investors to a specific asset class with risk-mitigation strategies.⁷
• New “theme”-based ETFs focus on small niches of the market, such as cloud computing or airlines.⁸

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. 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.

Content prepared by Kara Stefan Communications

¹ David Mann. Seeking Alpha. Jan. 18, 2017. “ETF Trends To Watch In 2017.” http://seekingalpha.com/article/4037644-etf-trends-watch-2017?page=1. Accessed Feb. 28, 2017.

² Investopedia. 2017. “Exchange-Traded Fund (ETF).” http://www.investopedia.com/terms/e/etf.asp. Accessed Feb. 28, 2017.

³ Leo Almazora. Wealth Professional. Jan. 10, 2017. “5 ETF Trends to Watch Out for in 2017.” http://www.wealthprofessional.ca/news/5-etf-trends-to-watch-out-for-in-2017-219323.aspx. Accessed Feb. 28, 2017.

⁴ Chris Dietrich. Barron’s. July 9, 2016. “Multifactor ETFs Are Gaining in Popularity.” http://www.barrons.com/articles/multi-factor-etfs-are-gaining-in-popularity-1468037320. Accessed April 10, 2017.

⁵ David Mann. Seeking Alpha. Jan. 18, 2017. “ETF Trends To Watch In 2017.” http://seekingalpha.com/article/4037644-etf-trends-watch-2017?page=1. Accessed Feb. 28, 2017.

⁶ Nicholas J. Elward and Brett Olsen. NATIXIS Global Asset Management. January 2017. “5 ETF Trends for 2017.” https://ngam.natixis.com/us/blog/5-etf-trends-for-2017. Accessed Feb. 28, 2017.

⁷ Ibid.

⁸ Bob Pisani. CNBC. Jan. 23, 2017. “Six Hot-Topic Trends for ETFs in 2017.” www.cnbc.com/2017/01/23/how-to-invest-in-etfs-six-hot-trends-for-2017.html. Accessed Feb. 28, 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.

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.

Investment Advisory Services offered through Global Financial Private Capital, LLC.

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What is a “safe” retirement withdrawal rate?

In an investment portfolio, the withdrawal rate is the monetary percentage from which a retiree draws from his account each year.  A “safe” withdrawal rate is a fixed percentage distributed as a systematic withdrawal that reasonably expects portfolio funds to last throughout the retiree’s lifetime. When determining your personal retirement withdrawal rate, it’s important to include adjustments for inflation and the portfolio’s ability to generate earnings throughout a specific time frame, ensuring the account isn’t entirely depleted.¹

These are the basic parameters for calculating a “safe” withdrawal rate, but your specified rate can vary, depending on the total portfolio value, safeguards against market risk and inflation, living expense requirements and life expectancy. We’re here to help you determine your retirement withdrawal rate for your individual situation.

The “safe” withdrawal rate strategy was originally based on financial planner William Bengen’s research in the 1990s. At the time, a prevailing theory was if an investment portfolio generated an average annual return of 7 percent, then that was the percentage that could be withdrawn each year. However, Bengen introduced the “sequence of returns risk” concept, recognizing that an average annual return represents a series of higher and lower returns. If an individual experiences significantly low returns early in retirement, the portfolio would be too depleted to sustain a high withdrawal rate, even if that rate is justified by a higher average annual return during a 15-year time period. Bengen concluded at that time that 4 percent is generally considered a “safe” withdrawal rate.²

Other financial advisors assert that if the returns sequence is favorable in early retirement, retirees could theoretically be able to increase their spending rate. In some scenarios, the 4 percent rule could even double or triple a retiree’s wealth by the end of retirement because his conservative withdrawal rate would not spend the bulk of his portfolio gains during that time period.³

Another point to consider is that the original 4 percent guideline was based on retirees spending the same amount each year throughout retirement. However, recent research has shown that retirees tend to decrease spending as they get older. Based on this decreased spending premise, analysts have determined that the 4 percent rate could be underestimated by 0.32 to 0.75 percent. In other words, because spending tends to decrease throughout retirement, the “safe” withdrawal rate guideline may be closer to a 4.5 percent.⁴

When developing a retirement withdrawal rate, remember that an investment portfolio should be sufficiently diversified to allow for growth opportunity paired with risk-mitigation financial vehicles.⁵

Content prepared by Kara Stefan Communications

¹ Bogleheads.org. Jan. 10, 2017. “Safe Withdrawal Rates.” https://www.bogleheads.org/wiki/Safe_withdrawal_rates.

 Accessed March 3, 2017.

² Wade Pfau. Forbes. April 19, 2016. “The 4% Rule and The Search for a Safe Withdrawal Rate.” https://www.forbes.com/sites/wadepfau/2016/04/19/the-4-rule-and-the-search-for-a-safe-withdrawal-rate/#772ae67f5a10. Accessed March 3, 2017.

³ Michael Kitces. Nerd’s Eye View. June 3, 2015. “The Ratcheting Safe Withdrawal Rate – A More Dominant Version Of The 4% Rule?” https://www.kitces.com/blog/the-ratcheting-safe-withdrawal-rate-a-more-dominant-version-of-the-4-rule/. Accessed March 3, 2017.

⁴ Derek Tharp. Nerd’s Eye View. Feb. 22, 2017. “The Impact of Decreasing Retirement Spending on Safe Withdrawal Rates.” https://www.kitces.com/blog/safe-withdrawal-rates-with-decreasing-retirement-spending/. Accessed March 3, 2017.

⁵ Fidelity. “Diversify Your Portfolio.” https://www.fidelity.com/learning-center/investment-products/fixed-income-bonds/diversify-your-portfolio. Accessed April 10, 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.

Investment Advisory Services offered through Global Financial Private Capital, LLC.

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U.S. Jobs Update

Americans who expect to see a wide array of new jobs on the horizon may be in for a surprise. Not only are traditional full-time jobs scarcer these days -- a combination of technological automation and corporate thrift -- but they also aren’t what they used to be. Companies are less inclined to offer full-time jobs because they are more expensive and impede organizations’ abilities to scale up or down depending on market factors.¹

In fact, two economists recently analyzed data and discovered that “all of the net employment growth in the U.S. over the past decade came from alternative work arrangements, not full-time jobs.” Today, 20 to 30 percent of adults work on an independent or contract basis.²

Historically, job creation has been a good indicator of growth industries and, therefore, one component used to assess investment opportunities. As an independent financial services firm, 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. 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.

A recent study found that, in 2017, the states with the most positive employment outlooks are Oregon (25 percent), Hawaii (23 percent), Florida (21 percent), Iowa (20 percent), and, tying for fifth place, California and Oklahoma (18 percent each). Industries that have increased hiring in recent months include wholesale and retail trade, transportation and utilities, and professional services.³

North Carolina is one state that has lost a significant number of jobs -- 2.2 million since 2010 -- largely in the textile and furniture manufacturing sectors. Unfortunately, as the large population of business-owning baby boomers start picturing retirement in their near future, the potential exists for many more jobs to fall by the wayside. One economic analyst has embarked on a campaign to promote employee ownership of small businesses to help ensure their continuation and economic growth after the owner(s) retire.⁴

The retail industry also is seeing its share of job reductions due to the prevalence of online purchasing, rendering many long-time merchants left out on the brick-and-mortar sidewalk. For example, despite the fact that the toy industry is booming -- annual U.S. toy sales grew 5 percent in 2016 and are estimated at $26 billion -- retail giant Toys R Us recently laid off between 10 and 15 percent of its corporate employees.⁵

Another employment sector that isn’t likely to materialize at the rate expected is coal mining. Last year, the number of coal miners decreased by 24 percent compared to 2015. On the other hand, there is an increase in job opportunities in renewable energy sources, such as solar and wind power. In fact, in recent years the Bureau of Labor Statistics has pronounced “wind turbine service technician” to be America’s fastest-growing occupation.⁶

Content prepared by Kara Stefan Communications

¹ Diane Mulcahy. Harvard Business Review. Oct. 20, 2016. “Why I Tell My MBA Students to Stop Looking for a Job and Join the Gig Economy.” https://hbr.org/2016/10/why-i-tell-my-mba-students-to-stop-looking-for-a-job-and-join-the-gig-economy. Accessed Feb. 21, 2017.

² Ibid.

³ Karsten Strauss. Forbes. Dec. 13, 2016. “Where The Jobs Will (And Won’t) be in 2017.” http://www.forbes.com/sites/karstenstrauss/2016/12/13/where-the-jobs-will-and-wont-be-in-2017/#1e9fa96d1a43. Accessed Feb. 21, 2017.

⁴ Darren Dahl. Forbes. Feb. 21, 2017. “How North Carolina Can Save Jobs from the Coming Silver Tsunami.” http://www.forbes.com/sites/darrendahl/2017/02/21/how-north-carolina-can-save-jobs-from-the-coming-silver-tsunami/#616ef048463b. Accessed Feb. 21, 2017.

⁵ Doreen McCallister. NPR. Feb. 21, 2017. “Toy Fair Shows Off What’s New as Toys R Us Cuts 250 Corporate Jobs.” http://www.npr.org/sections/thetwo-way/2017/02/21/516368759/toy-fair-shows-off-whats-new-as-toys-r-us-cuts-250-corporate-jobs. Accessed Feb. 21, 2017.

⁶ Erika Fry. Fortune. Feb. 21, 2017. “Sorry, Coal. Solar Is Where the Jobs Are.” http://fortune.com/2017/02/21/donald-trump-jobs-coal-mining-solar-energy/. Accessed Feb. 21, 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.

Investment Advisory Services offered through Global Financial Private Capital LLC.

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Expect the Unexpected

At some point, everyone’s made a decision with the best intentions, only to have things go differently than they planned. Because nobody can predict how the markets will behave, investments can sometimes fall into this category.

We believe individuals should create a financial strategy that’s designed to help them work toward their financial objectives, but at the same time speak to their values, and reflect their risk tolerance and   timeline for retirement.

With that being said, we live in a world economy where an economic or political blip on the other side of the globe can impact our financial situation.¹ This can make it difficult for money managers, business leaders and politicians to agree on decisions that will lead to the most positive impact for the greatest number of people.

Inevitably, it seems, someone is left out or disadvantaged. In some other instances, the whole effort is undermined, and the only takeaway are the lessons learned from the shortcomings. For example, the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act comprised more than 2,300 pages of comprehensive reform proposals to help safeguard America’s financial system.²

However, now six years down the road, much of the law is still not implemented. As of July 2015, only 63 percent of rules had been finalized, while about 20 percent had missed deadlines, the majority of which concern derivatives and mortgage reforms.³

One lesson here is that sometimes trying to do too much results in too little. We might do well to create overarching goals but carve out shorter-term and more easily achievable solutions.

¹ Christopher S. Rugaber. The Globe and Mail. Aug. 14, 2016. “U.S. economy grew at tepid 1.1% pace in spring.” http://www.theglobeandmail.com/report-on-business/international-business/us-business/us-growth-revised-down-for-second-quarter-consumer-spending-raised/article31570816/ . Accessed Aug. 25, 2016.

² David Arthur Skeel. Wharton Public Policy. December 2015. “Five Years after Dodd-Frank: Unintended Consequences and Room for Improvement.” https://publicpolicy.wharton.upenn.edu/issue-brief/v3n10.php#section2. Accessed Aug. 25, 2016.

³ Ibid.

Content prepared by Kara Stefan Communications. 

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.

Investment Advisory Services offered through Global Financial Private Capital, LLC, an SEC Registered Investment Advisor.

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