The Markets Stink. Now what? 2018 was a pretty good year for stock market returns…. Until October. Since then we have been hit with very difficult performance. A couple of weeks ago, the US markets had regained enough ground to at least have a zero percent return. At the moment, though, returns are negative for the year. Our brains, specifically our limbic system, where all of our emotions operate, want to do something! That is the part of the brain that would compel us to run so a tiger would not eat us back in more primitive times. The…
Summit Blog
Dimensional Funds: A great perspective on the market’s recent downturn
Is It Time to Panic?
Is it time to panic? Is it time to pull out of stocks? Today was a bit ugly in the US Stock Markets. The Dow Jones Industrial Average closed down 1,175 points, the S&P 500 down 113 points and smaller companies, represented by the NASDAQ closed down 273 points. The news was not a lot better in most international markets, with most major markets posting negative returns for the day as well. Is there reason to panic? Let’s think about recent economic news: The US economy just added 200,000 more jobs, and the jobless rate now stands at 4.1%. The…
Summit’s New Look
Summit Financial Planning is now Summit Financial Partners. A new year, a fresh look, and an unwavering commitment to our clients, Summit Financial Planning is proud to kick off 2018 with an updated brand that better reflects who we are and the services that we provide. This new branding is an outgrowth from conversations with you, our wonderful clients, about our collaborative process and fiduciary fee structure. First, you will see a new name. We have changed from Summit Financial Planning to Summit Financial Partners. Although the difference is subtle, Summit Financial Partners better depicts who we are, the services…
Emerging Markets: Why Stick with a (seemingly) Loser Asset Class
Over the past year I have been asked numerous times why we would not only continue to hold Emerging Markets stocks, but add to those positions when we rebalance portfolios. Index returns show that Emerging Markets have posted negative returns for four out of the past five years, while the S&P 500 has experienced positive returns each of those same five years. To further illuminate the discrepancy of returns: 2015 Return 5 Year Annualized Return MSCI Emerging Markets Index -14.6% -4.5% S&P 500 Index 1.4%…
3 Day Bonus from the IRS!
IRAs, 401(k)s and Other Retirement Savings Accounts: You Don’t Have As Much Saved as It Looks Like You Do
IRAs, 401(k) Plans and other retirement savings accounts are a good deal, especially if you receive a contribution from your employer to match your own contributions. That is an automatic return on your investment. If you contribute 4% of your salary to a 401(k) Plan, and your employer matches that 4%, you have an automatic 100% rate of return on your investment, and then, if you invest the funds correctly, the funds will grow even more than that. On top of the growth of your funds, the IRS lets you deduct the amount you deduct from your income. From a…
Market Corrections
I know we are hearing all sorts of scary information out there. The gamut ranges from “This is a normal market cycle correction” to “the markets are going to implode – go to all cash – NOW.” The truth is, we will only know which one it is after it is over. The pundits can predict all they want, but they don’t really know. The bigger question is: Does it matter if this is a normal correction or another 2008 when markets worldwide were down approximately 40%? As of today, February 3, 2016, here are a few year-to-date market index…
Fear: An Investor’s Enemy
In my last newsletter I touched on the fact that I am, by nature, an introvert. While reading Susan Cain’s Book, “Quiet,” I discovered that there is a scientific belief that part of what makes a person an introvert versus an extrovert is how easily stimulated one’s amygdala. According to Ms. Cain: “The amygdala is located deep in the limbic system, an ancient brain network found even in primitive animals like mice and rats. This network – sometimes call the “emotional brain” – underlies many of the basic instincts we share with these animals, such as appetite, sex drive,…
Confessions of an Introvert
By nature, I am an introvert. It is much more comfortable for me to listen than to talk. Recently, however, I came to the realization that this is not always the best choice. As a financial planner, my job is to be a good listener so that I can truly understand my clients’ thoughts, needs and concerns. Being a good listener is a critical component to offering the best advice to clients. If I don’t understand them, how can I advise them? This week, however, I had an interaction with several clients that challenged me out of my comfort zone. They challenged…
