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income, interest rates, retirement, risk management

Echoes of Jackson Hole… Sept jobs day, CPI, and the Fed

On August 26th Fed Chair Jerome Powell addressed economists and decision-makers at the Fed’s annual Jackson Hole conference. His remarks had been anticipated for months. The inflation raging through the economy and repeated Fed rate hikes have deflated some of the bubbles we saw at the start of 2022.

The question is, will the Fed slow its rate hikes and allow the economy to have a “soft landing” or will the Fed keep raising rates potentially crashing the economy…

Powell left no doubt about the path forward.

Continue reading “Echoes of Jackson Hole… Sept jobs day, CPI, and the Fed”
interest rates, retirement, risk management

August Jobs Day

In the 1970s the Fed led by Chair Arthur Burns shifted policy from hiking rates to fight inflation to cutting rates to fight recession. The result of this policy change was inflation growth slowed for a few months but then reaccelerated to higher levels causing more pain, more rate hikes and more recessions.

“This is the prospect of a flip-flopping Fed…” injected Jon Ferro of Bloomberg. (1)

“People are looking for the fed to cut as soon as they stop raising rates in order to counter a slowing economy” adds Lisa Abramowicz

Continue reading “August Jobs Day”
income, protection, retirement, risk management, Taxes

Strategies to Help Avoid Running Out of Money in Retirement

A recent study by the Center for Retirement Research at Boston College found that “many younger baby boomers and members of subsequent generations who don’t have access to a traditional pension could outlive the funds in their 401(k) accounts.” (1)

In the 1980s 401k plans began to replace pension plans in the workplace. Workers became responsible for accumulating their own retirement savings. Of workers born in 1947, 52% had pensions. By comparison workers born only 10 years later, only 21% had pensions.

The study compared retiree spending for people who had pensions and those who only had a 401k. They found that “retirees with pensions often didn’t spend their savings at all. In fact, many saw their nest eggs continue to grow after they stopped working.”

Continue reading “Strategies to Help Avoid Running Out of Money in Retirement”
interest rates, retirement, risk management

July Jobs Day–“Immense amount of uncertainty going forward.”

Markets are struggling to grasp the realities of the new economic dynamics. Inflation is expected to be announced next week at 8.8% while unemployment is only 3.6%, near post-pandemic lows. In addition, second quarter GDP is projected to be negative 2.1% according to the Atlanta Fed. The first quarter was negative 1%. Two consecutive quarters of negative GDP growth signify a recession.

Barry Ritholtz of Bloomberg pronounced “we have never been in a recession without rising unemployment”

While top line inflation is 8.8%, core inflation (without food and fuel) is only 6%, still far above the Fed’s 2% target.

However, says Tom Keene of Bloomberg, “We are not living core inflation… we are living almost double-digit headline inflation and it hurts.” (1)

The estimate is for 268k new jobs to have been created in June. The unemployment rate is expected to stay at 3.6%. Jobs creation in May was 390k.

Continue reading “July Jobs Day–“Immense amount of uncertainty going forward.””
interest rates, retirement, risk management

“The Menace of Inflation”: Inflation in Perspective

In May 1974 Fed Chairman Arthur Burns gave a commencement speech to Illinois College. The speech was titled “The Menace of Inflation”.

At this point in the 1970s the nation had been struggling with high inflation for four long years… For perspective, we have been only dealing with high and rising inflation for one year so far. His voice offers a view of what to expect in the years to come.

“The gravity of our current inflationary problem can hardly be overestimated. Except for a brief period at the end of WW2, prices in the United States have of late been rising faster than in any other peacetime period of our history. If past experience is any guide, the future of our country is in jeopardy. No country that I know of has been able to maintain widespread economic prosperity once inflation got out of hand. And the unhappy consequences are by no means solely of an economic character. If long continued, inflation at anything like the present rate would threaten the very foundations of our society.” (1)

Continue reading ““The Menace of Inflation”: Inflation in Perspective”
life insurance, protection

Job Change, Group Life Insurance and Russian Roulette

In the United States, there is a huge number of households which are unprotected or under protected by Life Insurance. In a recent LIMRA study 7 in 10 households believe would be in serious financial distress if an adult in the household passed away. (1)

37 million households have no life insurance.
Another 33 million households do not have sufficient life insurance to count themselves as protected.

One vehicle that many people rely upon for protection is Group Life Insurance. When offered as a company benefit, it can inexpensively provide protection for many people… but it only does so while the insured works for the company.

Currently, 1 in 5 people are only covered by Group Life Insurance.

The challenge is that recent employment trends show that people are changing jobs more often than in past years. (2)

Continue reading “Job Change, Group Life Insurance and Russian Roulette”
AI, diversity, entrepreneurship, new economy, risk management

Diversity Matters… Especially In Business

Even before the economic crisis wrought by the Coronavirus, the economy is changing at a rapid pace. Companies in many sectors that have been pillars of the economy have fallen on hard times. Companies that were leaders in industrial America have seen their market cap fall by 2/3rds in the past year. Leaders in retail have closed hundreds of stores and laid off thousands of people. Even technology companies that started off strong in the past 10 years have suffered setbacks in the past year due to corporate governance issues.

As technology advances, the challenge for businesses to stay competitive becomes amplified. In the last 5 years, advances in robotics and AI (Artificial Intelligence) have significantly added to the bottom line of companies. That pace of change seems to be accelerating. But even as technology expands its importance, what will human workforce need to look like.

Continue reading “Diversity Matters… Especially In Business”
Climate change, environment, ESG, risk management, Socially Responsible Investing, SRI

Energy, Economic Trends, and Effecting Change: A Review of the Economic Superorganism

In his book “The Economic Superorganism”, Carey King outlines a novel system to organize economic decision making and to evaluate outcomes in a Climate Changed world. People are becoming increasingly aware of the consequences of climate change. In October of 2018 the IPCC (International Panel on Climate Change) stated we have 12 years to halt the growth of CO2 if we hope to avoid the worst possible consequences of global warming. (1) The fossil fuel industry is the primary driver of CO2 growth.

In the February 2022 update of the IPCC report stated, “This report is a dire warning about the consequences of inaction,” said Hoesung Lee, Chair of the IPCC. “It shows that climate change is a grave and mounting threat to our wellbeing and a healthy planet. Our actions today will shape how people adapt and nature responds to increasing climate risks.” (4)

“The world faces unavoidable multiple climate hazards over the next two decades with global warming of 1.5°C (2.7°F). Even temporarily exceeding this warming level will result in additional severe impacts, some of which will be irreversible. People and ecosystems least able to cope are being hardest hit, said scientists.”

Continue reading “Energy, Economic Trends, and Effecting Change: A Review of the Economic Superorganism”
health, life insurance, protection, risk management

Diet, health, and the financial impact on life insurance

The purpose of life insurance is to manage risk. Individuals and families need protection in the event a primary bread winner passes away.

Several factors drive what life insurance costs for an individual. Women tend to live longer, so their cost for life insurance is lower than it is for men. The healthier a person is, the less expensive it is for them to obtain life insurance. People who smoke pay significantly more for life insurance.

Each person’s health situation is unique. Part of the process of obtaining life insurance is to collect medical samples for testing. The underwriter reviews records from your doctors over the past 5 years. They also examine driving records.

Once all of the information is collected the underwriter evaluates the data at hand and assigns the insured person a health rating. The better the rating, the lower the premium you pay. 

So how much of an impact do health issues have on a person’s ability to afford life insurance? 

Continue reading “Diet, health, and the financial impact on life insurance”
income, interest rates, retirement, risk management

Recession Risks Rise: a survey

Over the past few months several institutional investors have offered insights on how the markets were evolving given a laundry list of changing conditions, including rising inflation, a change in Fed policy to raise rates, energy prices, and slowing world growth…

In January 2022 Howard Marks of Oaktree Capital was interviewed on Bloomberg by Erik Schatzker. Marks gave his view of how market condition were changing at the start of 2022 and how investors could adjust. Schatzker asked Marks, “are you worried about inflation?” (1)

“I am worried. This is excessive. Everyone wants a little inflation. For years central banks have been trying to generate inflation and haven’t been able to do so. Excessive inflation is not desirable.

Higher inflation means higher interest rates and higher rates mean lower asset prices, and that’s what’s going on right now.”

Continue reading “Recession Risks Rise: a survey”
Climate change, environment

First Hand Insights on Climate Change Impacts in Bangladesh: An interview with Susmita Saha

This is an updated reprint of a 2016 interview.

In February 2022 the IPCC (International Panel on Climate Change) released a dire warning. (1) “This report is a dire warning about the consequences of inaction,” said Hoesung Lee, Chair of the IPCC. “It shows that climate change is a grave and mounting threat to our wellbeing and a healthy planet. Our actions today will shape how people adapt and nature responds to increasing climate risks.”

“The world faces unavoidable multiple climate hazards over the next two decades with global warming of 1.5°C (2.7°F). Even temporarily exceeding this warming level will result in additional severe impacts, some of which will be irreversible. People and ecosystems least able to cope are being hardest hit, said scientists.”

This nightmare is becoming all too real. In April 2022 temperatures on the Indian subcontinent have reached new highs well before the start of the summer season. (2) “Temperatures in India remain high amid ongoing heat waves that have plagued the country with dry, sweltering weather since early spring. The India Meteorological Department (IMD) stated that its March maximum temperatures were the highest in nearly a century and a quarter, and rainfall was only running about a quarter to a third of normal.”

Continue reading “First Hand Insights on Climate Change Impacts in Bangladesh: An interview with Susmita Saha”
interest rates, retirement, risk management

Housing Crisis 2.0

In 2008-2009 the nation was struck by a crisis in the mortgage credit markets that had repercussions for the next 15 years. The Great Financial Crisis (GFC) caused many people to lose their house or their job, or both. Many have yet to fully recover.

Fast forward to 2020-2022 and the housing situation in the United States is very different… Housing prices are rapidly rising and mortgage rates are headed higher as the Fed begins to raise rates and tighten financial conditions in an effort to fight inflation. Since WW2 housing has been a bastion of wealth building for the middle and working class. As an asset people were able to benefit from its appreciation and stability over time. Contrast this to the fact that many in the middle or working class have very little saved in their 401ks compared to the wealthier 10% of society; The wealthiest 10% own 89% of stocks, nearly $36 trillion. (1)

As housing prices and mortgage rates rise, younger buyers who are starting out in life are increasingly being priced out of the market. The University of Michigan Consumer Sentiment Survey takes a monthly snapshot of buying conditions for housing. The February 2022 figure came in at 36, a 42 year low. By way of comparison, the survey printed 70 in January 2020 and 56 in 2008 during the GFC.

So, the question is why are housing prices, as well as rents, continuing to rise with consumers largely sidelined?

Continue reading “Housing Crisis 2.0”
Climate change, economy, environment, ESG, retirement, risk management, Socially Responsible Investing, SRI

How Will COVID19 Potentially Affect the Climate Change Debate?

As the severity of the COVID19 pandemic became clear to leaders in China in early 2020, the Chinese Communist Party announced the quarantine of over 800 million people and effectively closed down the economy of China. One of the effects of this shutdown was a dramatic drop in carbon emissions and air pollution.

Paul Monks, professor of air pollution at the University of Leicester, predicted there will be important lessons to learn. “We are now, inadvertently, conducting the largest-scale experiment ever seen,” he said. “Are we looking at what we might see in the future if we can move to a low-carbon economy? Not to denigrate the loss of life, but this might give us some hope from something terrible. To see what can be achieved.” (1)

“What I think will come out of this is a realization – because we are forced to – that there is considerable potential to change working practices and lifestyles. This challenges us in the future to think, do we really need to drive our car there or burn fuel for that,” said Monk.

Continue reading “How Will COVID19 Potentially Affect the Climate Change Debate?”
economy, income, interest rates, retirement, risk management

“The Fed is going to break things…”

In the last week of March 2022, the Federal Reserve revealed a regime change in their policy. The Fed moved from balancing jobs and inflation and being patient to a new policy of aggressively raising rates in order to fight inflation, regardless of its impact on the economy.

On March 16, 2022 the Fed raised rates for the first time in several years 25bps. The move was well broadcast and expected by markets for many months. Many critics of the Fed have complained the Fed has waited too long to raise rates. In 2020 the Fed lowered rates and engaged in massive quantitative easing (“QE”) in order to pull the economy out of the recession that resulted from the COVID shutdown.

On Monday March 20, 2022, Chair Powell appeared at the NABE (National Association for Business Economics) conference; his comments revealed a clear change in priorities at the Fed, and some insight to policy going forward. (1) In his statement he shares that “Supply chains are healing, but we are now seeing new COVID related supply disruption from China. The healing will come in time as the world settles into a new normal, but the timing and scope of that relief are highly uncertain. In the meantime, the Fed will be focused on trying to reduce price pressures.

As the magnitude and persistence of inflation became more clear at the end of 2021, the FOMC pivoted to less accommodative monetary policy. I believe these policy actions, and those to come, will help bring inflation down to 2% over the next 3 years.“

Continue reading ““The Fed is going to break things…””
Climate change, economy, environment, ESG, retirement, risk management, Socially Responsible Investing, SRI

Mixed Economic Signals, Debt Issues and Fossil Fuel Companies

Several years ago, Bloomberg Businessweek did a bio pic on Hank Paulson, Bush’s Treasury secretary who served during the Financial Crisis of 2008. After reviewing the events that led to the Crisis, connecting the dots, and seeing the impact of what happened, Paulson had this to say at the end of the film…

“The whole reason I’m doing this, is not because I want to look back, but because I have increasingly come to the view that it’s important that there be a historical record for those that come after me, so we don’t replay this movie all over again.” (1)

Fast-forward to November 2019, and we saw many positive and negative conditions developing that raised questions about the stock market and the health of the US economy.

Since the summer of 2019 financial conditions have noticeably weakened as the trade war with China has started having a significant economic impact. American and Chinese officials have spoken publicly that progress is being made. Hopes of a trade deal had driven equity markets higher, but as of December 2019 there is still no deal.

The trade war had caused a real decline in business investment and optimism. A CFO survey in the Fall of 2019 showed, “U.S. business optimism dropped this quarter to its lowest level in three years, according to third-quarter results from the Duke University/CFO Global Business Outlook. A majority of CFOs expect a recession to start before the presidential election.” (2)

This lack of business confidence had slowed growth in the economy and motivated the Fed to cut interest rates several times this year. This was all before COVID crippled the economy in the Spring of 2020…

Continue reading “Mixed Economic Signals, Debt Issues and Fossil Fuel Companies”
income, retirement

First Steps to Retirement Planning

Many people are paralyzed into inaction when they start thinking about the challenge of planning for retirement. The truth is there are a few first steps anyone can take on their own to improve their chances for success.

A first step is to determine how much income you can expect to receive from social security. In years past SSA would mail annual statements for people to see their expected benefits. Things have changed… go to google and search for “my social security”. You will create an account and through this account be able to determine your numbers.

Continue reading “First Steps to Retirement Planning”
charitable giving, life insurance, protection, Taxes

A beloved relative has passed away and left me an inheritance… What should I do?

I have had several clients experience the passing of a beloved family member in the past 6 months. All ages, all walks of life. To a person they struggle with the desire to have their father or spouse or daughter back with them again, and how to move forward without them.

I have lost both of my parents; my mother passed away at 42 from lung cancer. I know the pain they suffer. Looking back, her illness and death really hurt my father and younger brother financially. She didn’t have life insurance. Due to the illness many of the family’s assets were exhausted. My father and brother did the best that they could do, but it was a difficult journey.

Continue reading “A beloved relative has passed away and left me an inheritance… What should I do?”
economy, interest rates, retirement, risk management

March Jobs Day – “There is a huge fog that is blanketing future economic outlooks.”

The geopolitical crisis of the past month has changed the global economic roadmap ahead. Russia’s invasion of Ukraine has disrupted flows of commodities and driven up prices stoking already high inflation. As a result…

Tom Keene points out “We are not focused on payrolls…” (1)

March 4, 2022 was the release of the jobs report for February. The estimate for new jobs is for 421k, and a 3.9% unemployment rate.

Continue reading “March Jobs Day – “There is a huge fog that is blanketing future economic outlooks.””
Climate change, environment, risk management, Socially Responsible Investing, SRI

“We are talking about a genuine existential issue”: An interview with Ian Dunlop, Sustainability Consultant based in Australia

This article is an update from an interview in 2016 with more recent comments from Ian Dunlop and James Cox.

Ian Dunlop’s life has been spent in the center of the carbon economy and the climate change debate.

His bio from LinkedIn chronicles his background…

Ian Dunlop has wide experience in energy resources, infrastructure, and international business, for many years on the international staff of Royal Dutch Shell. He has worked at senior level in oil, gas and coal exploration and production, in scenario and long-term energy planning, competition reform and privatization. He chaired the Australian Coal Associations in 1987-88. From 1998-2000 he chaired the Australian Greenhouse Office Experts Group on Emissions Trading which developed the first emissions trading system design for Australia. From 1997 to 2001 he was CEO of the Australian Institute of Company Directors. Ian has a particular interest in the interaction of corporate governance, corporate responsibility and sustainability. An engineer from the University of Cambridge (UK), MA Mechanical Sciences, he is a Fellow of the Australian Institute of Company Directors, the Australasian Institute of Mining and Metallurgy and the Energy Institute (UK), and a Member of the Society of Petroleum Engineers of AIME (USA). He is Chairman of Safe Climate Australia, a Director of Australia 21, Deputy Convenor of the Australian Association for the Study of Peak Oil, a Fellow of the Centre for Policy Development, a Member of The Club of Rome and a member of Mikhail Gorbachev’s Climate Change Task Force. He advises and writes extensively on governance, climate change, energy and sustainability.

He grew up in the middle of the oil and coal business, and over the years he has come to his own conclusions about climate change and the impact it will have on humanity’s future. I interviewed him mid-May 2016 to learn more. I wanted to learn more about what can be done about climate change, what the role of business is, and what the impact on the economy is.

Continue reading ““We are talking about a genuine existential issue”: An interview with Ian Dunlop, Sustainability Consultant based in Australia”
Climate change, economy, retirement, risk management

Ukraine, the Global Framework and Climate

On February 24, 2022, Russia invaded Ukraine. A number of times today I heard the phrase, “this changes things fundamentally.” The question is what does it change and how do we move forward? In particular, what does this mean for the climate crisis?

The climate crisis requires a level of international cooperation that has never been seen. The breakdown of the framework that came out of Glasgow and COP26 is the latest example of the challenge we face.

Events in Ukraine underscore deeper systemic issues that we need to address in order to be effective on an international scale.

Continue reading “Ukraine, the Global Framework and Climate”
protection, retirement, risk management

How to Deal with Being Laid Off: 5 Strategies To Prepare For Job Change

Each day we read reports that the economy is booming.

“U.S. housing and consumer are strong” (1)

“Factory output is poised to speed up.”

“Stronger global growth expectations and a weaker dollar should help.”

“The stock market hits record highs…”

With that being the case, you might find it surprising that several large corporations have recently announced they will be laying off large numbers of employees, especially managers. (2)

Companies which are facing an increasingly tough business environment are being forced to “slash costs and stabilize”. (3) Some companies find themselves at a disadvantage because of the move away from fossil fuels. (4) Some companies have failed to innovate in order to remain competitive. Some companies have to carry legacy costs that newer competitors, especially those in the technology or e-commerce space do not have. Many companies are struggling to keep up with commodity and wage costs that are rising with inflation.

Continue reading “How to Deal with Being Laid Off: 5 Strategies To Prepare For Job Change”
income, retirement, Taxes

RMD: What are the Risks and How Can We Address Them?

Several recent studies show peoples number one fear is running out of money during retirement. (1)

To prepare us for retirement the IRS gives workers the ability to set up qualified accounts in order to save for retirement and get tax deferred growth. By deferring taxes money saved can grow faster. You put money away, not paying taxes now, but paying taxes on the money when you pull it out during retirement.

When you get to retirement, you can start pulling money from your account. In the past it has been considered good practice to not draw more than 4% from an account during retirement in order to make sure you don’t outlive your money. In the past bond yields have been 5-7% and that makes a 4% draw down possible. Now over the past 5 years bond yields have been around 2-3% and because many retirees rely on bonds to deliver income to their portfolio, many economists and advisors have been advising clients to withdraw less from their IRAs; this is so retirees don’t run out of money when they are older.

Now what if I told you there was a tax law that requires you to draw more income from your account, without any consideration for how long you or your spouse will live, and without regard for whether you will run out of money or not.

Continue reading “RMD: What are the Risks and How Can We Address Them?”
economy, interest rates, retirement, risk management

Feb Jobs Day… “Buckle Up”

It has been a turbulent week…

Price of gasoline rose to the highest since 2014 at $3.43/gallon. Brent crude is at $93 per barrel.

Inflation number to be released next week is expected to rise to 7.3%, from 7.1% in January

On Thursday, the ECB announced it would pull back from QE faster than expected after their meeting on 2/3/22. ECB pivoted away from their policy of “lower rates for longer”. As a result, Italian yields are up dramatically. Yields of Italian bonds started the week at 1.2%… by Friday yields were over 1.7%. Negative yielding debt is at lowest level since 2018.

At a meeting in the UK, Bank of England Governor Bailey called on unions to hold off on demands for pay increases. Union officials called it “a sick joke”.

In equity markets Facebook (Meta) fell 25% and lost over $200billion in value overnight due to slower growth. The next day Amazon rose 15% and gained over $150billion in value on earnings and price hikes. These are massive flows of capital.

On Wednesday, ADP released numbers this week showed a decline of 301,000 jobs due to Omicron and a worsening in economic conditions due to rising bond yields. The question is how much of the drop is due to Omicron which is fading, and how much is due to a slowdown in the economy which could worsen as the Fed raises rates starting in March.

The White House warned “the January jobs number will be ugly”.

Continue reading “Feb Jobs Day… “Buckle Up””
economy, interest rates, retirement, risk management

What do rising rates mean for investors? In 2018, in 2020… and today in 2022

In January of 2022 markets sold off as investors came to grips with the realization that the Fed was committed to end Quantitative Easing (QE), raise rates by March of 2022, and begin selling assets from its balance sheet. After years of “easy money” monetary policy, the Fed had been forced to change direction due to rising inflation worries. (1)

“The market is significantly overvalued, which works okay when interest rates are at record lows,” said Mark Zandi, chief economist at Moody’s Analytics. “But when rates rise, valuations become a real issue, so the market is adjusting to the new interest rate reality.”

To understand how this affects your portfolio and retirement savings a bit of historical context can be helpful.

So first… a history lesson…

Continue reading “What do rising rates mean for investors? In 2018, in 2020… and today in 2022”
economy, entrepreneurship, new economy, retirement, risk management

The Work of Nations: 30 Years On…

When I first read “The Work of Nations” by Robert Reich in the mid-1990s I had almost no background in macroeconomics. (1) But in reading it, Reich was able to effectively describe how radically the economic system was changing as a result of Globalization. Reich at the time was Bill Clinton’s Secretary of Labor and a key member of his economic team.

As context, China’s economy in 1991 was $400 billion compared to $6,174 billion for the US. China entered the global trade organizations in 1992. Today China’s economy is $15.6 trillion compared to $23 trillion for the US for 2021. (11)

Continue reading “The Work of Nations: 30 Years On…”
Climate change, diversity, environment, ESG, risk management, Socially Responsible Investing, SRI

What is Socially Responsible Investing?

I have recently had several people ask me about SRI. What is it? Why does it matter?

The first thing to understand is SRI means different things to different people. Several years ago I attended a gathering of advisors focused on sustainability at the Bloomberg headquarters in NYC. I talked to many of the 300 attendees and what I found was every single person had a different interpretation of what SRI meant.

Some focused on promoting clean energy, some focused on workers issues and inequality, some focused on climate change, some look to exclude alcohol and tobacco, others focused on micro lending. Each focus is unique and approaches the challenge of investing with different assumptions.

Continue reading “What is Socially Responsible Investing?”
economy, interest rates, retirement, risk management

Jobs Friday: December 2021

As a financial advisor and someone who loves the study of economics, “Jobs Friday” is the highlight of my month. It is a signpost of where the economy has been for the past month or two, as well as giving clues about where it is headed in the coming month. Information derived from the Jobs Report posted by the US Dept of Labor is used by the Federal Reserve to judge, manage, and adjust monetary policy. Politicians on both sides use the information to justify and drive fiscal policy.

For this month’s report the expectation was for the economy to have created 550,000 new jobs. One factor going into the jobs report that is a concern is ‘how many people are going to come back into the labor market?’ Currently, economists estimate that nearly 8 million people are still out of the labor force, having left at the beginning of the COVID pandemic in February 2020. (3)

Continue reading “Jobs Friday: December 2021”
disability, health, life insurance, protection, risk management

Deaths of Despair

In recent months companies at the center of the Opioid Crisis have been fighting in court about the roles they played in the epidemic that has affected millions of Americans. The over prescription of highly addictive drugs has had severe impacts on families, businesses, and the economy. (1) But the Opioid Crisis is only part of a much larger problem facing American Society.

In March of 2017 a landmark study was released connecting opioid abuse, financial insecurity, and death rates in the United States. The information is sobering and should be the focus of policy changes at all levels of government.

A recent study by Princeton Professors Anne Case and Angus Deaton titled, “Mortality and morbidity in the 21st century,” shows the connection between the rising mortality rates of the middle class in the US and “a measurable deterioration in economic and social wellbeing”. (2)

This deterioration has not suddenly developed. Rather, “Case and Deaton document an accumulation of pain, distress, and social dysfunction in the lives of working class whites that took hold as the blue-collar economic heyday of the early 1970s ended, and continued through the 2008 financial crisis and the subsequent slow recovery.”

Continue reading “Deaths of Despair”
income, protection, retirement, risk management

Closing the Retirement Savings Gap

A new report from World Economic Forum shows that retirees could outlive their savings by a decade or more due to higher life expectancy. “Women should prepare to bear the brunt of such shortfalls, going without retirement savings for at least two years longer than their male counterparts.” (3)

“The size of the gap is such that it requires action,’ says report co-author Han Yik. (1)

The report shows men in the US have a retirement savings gap of 8.3 years. The report shows that women in the US have an average 10.9 year gap between what they have saved and what they will require due to increased longevity.

Continue reading “Closing the Retirement Savings Gap”
life insurance, protection, risk management

The Risk To Your Child’s Future

Loss of a parent shatters the life of a child. Period.

Loss of a parent’s love.
Loss of a guide through life’s challenges.
Loss of protection and security.

These are losses that are beyond measure and replacement. But the truth is these losses can be worsened by the financial impact that comes from a lack of planning and losing a parent.

7 in 10 of all households said they would have trouble covering everyday living expenses after several months if the primary wage earner died. (1)

Continue reading “The Risk To Your Child’s Future”
health, income, protection, retirement, risk management

5 Tips to Make Your Retirement Savings Last

The statistics are troubling…
10,000 Americans begin their retirement every day.

The Social Security Administration has said the SS Trust Fund will become exhausted by 2035, unless benefits are reduced, the retirement age is raised, or other solutions are put into action. (1)

76% of Baby Boomers are not confident they have saved enough for retirement. (2)

One third of retirees retire with mortgage debt. (2)

Only 18% have more than $200,000 saved. (2)

56% have less than $10,000 saved. (2)

Women live substantially longer than men and yet have much less saved for retirement. (3)

About 25% of non-retired adults have no retirement savings (4)

Many Americans have experienced reductions in pay and not been able to save as much as they would have liked since the Great Recession of 2008/2009. (5)

In addition, the Great Recession resulted in many workers in their 50s and 60s getting laid off, not being able to find comparable employment and choosing early retirement.

55% of seniors working during retirement say they do so because they need extra money. (4)

It’s not an optimal situation for many people. Adding to the stress on finances is the fact that people are living longer.

So, the question is how can we improve our retirement situation with the resources we have at our disposal?
Listed below are 5 strategies you can implement today to make the most of your retirement savings…

Continue reading “5 Tips to Make Your Retirement Savings Last”
AI, entrepreneurship, new economy, retirement

“Morning in America…”

I was driving into work today and a Chevy Volt sped by me. Yesterday a Tesla Model S was parked in front of my office. In Q2 of 2019 Tesla produced over 72,000 cars, including the mass production version Model3. By Q3 of 2021 Tesla had produced 240,000 cars. (1)

Technology is bringing a renaissance to American manufacturing. (2) New industries and new job descriptions are being created, even as “old economy” jobs become antiquated and outsourced to robots. (3)

Technology is allowing people to use their existing assets in order to bring in more income, such as Uber and Lyft (using the car) and AirBnB (using the house). Websites such as Amazon, Ebay, Shopify and Etsy allow people to open their own virtual shops, without the need for brick and mortar retail space. The internet allows more and more people to connect to influencers and decision-makers, allowing people to earn money as consultants and contractors.

I remember when I was in middle school in the 1970’s, times were hard for my parents… I remember thinking as a teenager ‘I want a simple government job where I don’t have to worry about things like pink slips, bankruptcy, or how are we going to afford presents for Christmas.’

Continue reading ““Morning in America…””
economy, income, interest rates, retirement, risk management

Economic Fears and Managing Risks

In the Fall of 2021, the economy continues to slow, and it is having an effect on markets.

I wrote this article originally just before COVID hit… some of the observations were in 2019, as you will see.

In 2019, the economy was already slowing…

It is interesting how the comments in the original article are appropriate for today’s economic environment.

In 2019, incoming ECB President Christine Lagarde stated the US trade war with China had “dented global economic growth.”

“You can’t adjust to the unknown. So, what do you do? You build buffers. You build savings. You wonder what comes next. That’s not propitious to economic development,” said Lagarde.

“It means less investment, less jobs, more unemployment, reduced growth. So of course, it has an impact,” she said. Lagarde led the International Monetary Fund for 8 years prior to moving on to the ECB. (1)

Recent surveys by the NFIB strike a similar note by US businesses that in 2021 are constrained by supply chain delays, increasing prices, and labor difficulties. (2)

Continue reading “Economic Fears and Managing Risks”
Climate change, environment, ESG, health, new economy, Socially Responsible Investing, SRI, Taxes

Pending Meat Tax Could Change Economic Behavior

In the past year plant-based meat products have made real inroads into many popular restaurant chains. Many plant-based brands have developed models that make them cost competitive and flavor competitive with animal-based meat products.

Animal-based meats have been criticized on several levels. The role that CAFOs (concentrated animal farming operations) play in deforestation, methane release, pollution, and accelerating climate change. In addition, several recent studies have shown that meat products have many negative health consequences, including cancer. (1)

In a recent paper Fitch Solutions Macro Research found that meat could be the target of new consumption taxes, similar to sugar taxes to fight obesity that have proliferated over the past few years.

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income, interest rates, retirement, risk management

Negative Yielding Bonds and Risk

Bonds are traditionally used within investment portfolios to reduce equity risk and generate income through the yields they carry. For example, a 10-year bond with a face value of $10,000 with a 5% yield generates $500 in income. Most recently the US 10-year yield was 1.5%.

However, over the past few years central banks in Europe and Japan have experimented with Quantitative Easing and driven rates below zero%. In August 2021, the amount of negative yielding bonds reached over $16.5 trillion. In May 2019 that amount stood at $12 trillion. Yields in Europe continue to fall as the ECB in June indicated its plans to set up a new bond buying program in upcoming meetings. A slow-down in the European economy, spiking energy prices and rising inflation has left businesses and economists frustrated. (1)(2)

What is a negative yielding bond? It is a bond with an inflated value and a yield of less than zero%. An example of a negative yielding bond is one with a face value of $10,000 but a market value $11,000. The purchaser of such a bond literally pays more than the bond worth for the right to own the bond. As bond yields move down the value of a bond increases. As bond yields move up the value of a bond decreases.

As energy prices and inflation has risen, bond yields have quickly moved higher. As a result, the amount of negative yielding debt has decreased, and the value of bonds held by central banks and institutional investors has plummeted.

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Climate change, environment, ESG, new economy, retirement, risk management, Socially Responsible Investing, SRI

What Role Do Moral Values Play in Investment Selection?

As a financial advisor, I am constantly approached by mutual fund and ETF wholesalers who are selling their investment vehicles. Yesterday I was approached by a representative who offered a vehicle that invested and looked at company fundamentals in a way that I believe is important. Before we talked, I asked if these were funds that invest based on sustainable or ESG (environmental, social, and governance) criteria.

He said, “These funds rank very highly based on ESG ratings.” And when I looked at the Morningstar ratings, they did. However, when I dug deeper several red flags jumped out at me. First, nowhere on the fund prospectus do they mention using screening for sustainability or ESG concerns. The second red flag was when I looked at existing holdings… their top holding is one of the largest US oil companies.

This to me is non-negotiable.

Continue reading “What Role Do Moral Values Play in Investment Selection?”
income, interest rates, retirement, risk management

How to Guarantee Retirement?

Several years ago, I read a post on LinkedIn which sounded the alarm bells that the “time is running out” for your retirement account.

I found it offensive and in poor taste, playing on the fears of the public at large. Throughout most of 2021 there has been a palatable undercurrent of fear in the market… on the part of investors, on the part of money managers, on the part of economists… Inflation rocketing higher, talk of asset bubbles left and right, issues around hiring and employment, falling consumer sentiment, and all of these leading to a slowing in the economy

The 5% pullback in September 2021 in the market reinforced that fear for some.

Continue reading “How to Guarantee Retirement?”
health, life insurance, protection, risk management

How will your family survive?

My cousin died from a heart attack two years ago.

He was 48 years old. He left behind a wife and two teenage children. Their plans for the future were shattered and his family is left to pick up the pieces.

My son was born when I was 30 years old. Honestly, I didn’t get life insurance until I was 36. I had never been taught the importance of using Life Insurance to help manage risk and protect your family. Recent studies show that I’m not alone. There is a huge gap in the level of financial literacy in the United States.

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interest rates, retirement, risk management, Taxes

Trick or Treat? Revisiting The Potential Downside of Tax Reform for Investors

There is an old story that goes “beware what you wish for…” Things don’t always turn out as expected. In 2017, President Trump proposed and Congress approved a huge tax cut plan… the Tax Cuts and Jobs Act (TCJA). The results have been controversial.

Along those lines I watched a fascinating interview of Tom Lee, head of research at Fundstrat, on Bloomberg four years ago. His insight proved very valuable and accurate. (1)

His feeling is that a Tax cut, as it was being discussed, could be negative for investors long term. “There’s two reasons; First, when cutting tax rate you raise the after tax cost of debt. Leverage becomes a problem for a lot of businesses. Second, because you are cutting tax rates you are effectively giving cash to all businesses, even businesses where you want to reduce allocation.“

His observation was that companies that are currently struggling with cash flow will have a temporary life preserver tossed to them, but it will not change the fundamental issues facing a lot of industries. It will distort markets.

In fact, that is exactly what happened. Companies that were not profitable and not healthy continued to borrow and live off of debt instead of reforming their business models.

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disability, health, life insurance, protection, risk management

A few life lessons…

In the past few months I have seen several friends pass away…

I have seen several people in my circle struggle with illness, addiction and disability…

All are under the age of 50. None of them planned on what happened to them.

None of them planned on the impact it would have on those around them.
Life is not a straight line.
We all are forced to deal with situations that are beyond our control.

Continue reading “A few life lessons…”
charitable giving, life insurance, Socially Responsible Investing, SRI

Creating Social Impact Through Giving

Every day millions are helped to improve their lives due to the generosity of others. As a community we each have a stake in the success of every individual, every family. Many organizations that make massive positive contributions are struggling due to cutbacks in government supports.

We as stakeholders in American society have a responsibility to give back and help those less fortunate. A recent example of this ethos:

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economy, income, retirement, risk management

Being Too Fearful Can Hurt Financial Security

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.”


― Charles Dickens, A Tale of Two Cities

I have seen many people who are enraptured by the market moves since the COVID recession of 2020. Markets supported by seemingly unlimited aid from central banks around the world, driving equities to higher all-time highs, and rewarding risk taking behavior.

I have seen many people in the past year who are fearful in the current market environment… High market valuation, trade war fears, warnings from pundits, Fed policy moves, volatility… Because of fear, many people have decided to sit in cash or even liquidate their retirement savings.

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economy, entrepreneurship, risk management

Management Flaws in Corporate America

The most recent rounds of corporate earnings reports for retail companies has by and large been very disappointing. Many companies are struggling to survive in an environment dominated by a few large ecommerce companies. (1) Life in an age of COVID has driven many to rely upon online sales.

Disappointing earnings have resulted in lowered outlooks and fallen stock prices of many retail companies. (2)

I recently had the opportunity to talk to several people who work in corporate America, particularly retail. What I learned is scary.

In addition to focusing on closing stores and reducing costs, many companies are resorting to extreme discounting and price matching strategies in order to draw in more traffic and stimulate sales. However, the net impact of this approach has been to alienate the company’s high value core clients (due to impaired customer service) and to attract a clientele that is focused on lower price and discounts. As a result margins are being squeezed even more than before.

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health, income, risk management

New Employment Realities As Recession Risks Rise

“I’VE BEEN LET GO…”

It’s a terrifying experience… being fired or laid off from a job you have done well for a number of years. It seems daily that you see headlines focused on labor, hiring, and the shortage of trained help.

While the monthly jobs numbers are heralded as a sign of a strong economy there are undercurrents of weakness. New weekly unemployment claims continue to run over 375,000. While many businesses are expressing frustration about being unable to find new employees, such an elevated level of layoffs is confusing. (1) For decades more than half of all American’s have little or no savings. In 2020 personal savings rose as people saved much of the money received due to government programs to support the economy through fiscal policy. In 2021 73% of households had saved $1,000 to $5,000. That said, only 5% of households had more than $10,000 in savings. (2) Many companies report a weakening expectation for revenue and growth. The renewed outbreaks of COVID with the Delta variant, no prospect of more fiscal support, and elevated inflation are taking a toll. (3) CEOs are concerned about the effect of oncoming changes in Fed policy and it has caused many companies to delay capital investments and expansion. (4)

Many analysts have already indicated that China is in a recession. Some expect a slowdown or recession in the US within the next 6 to 12 months. Many are looking at the current economic environment and using the term “Stagflation” … a term last used in the 1970s. (5)

With that being the case, it pays to be prepared and understand what unemployment means in this new economic environment.

Continue reading “New Employment Realities As Recession Risks Rise”
Climate change, economy, environment, ESG, retirement, risk management, Socially Responsible Investing, SRI

Divestment From Fossil Fuels Gathers Steam

As an investor in today’s economy, you have a say in what companies you invest in and support. By investing in a company, you are effectively voting with your dollars.

By the same token, as an investor you also have the right to purposefully refuse to invest in a specific company or industry. Perhaps you disagree with their business model or you oppose the negative impacts they are having on society. This act of withholding investment is at the core of “Divestment”.

Without access to capital markets, fossil fuel companies cannot finance their operations. As fewer buyers come in to buy shares of fossil fuel companies, the potential value of these companies decline.

Continue reading “Divestment From Fossil Fuels Gathers Steam”
AI, income, risk management

Productivity and Robots

With the advent of COVID and the global shutdown of the economy, robotics and Artificial Intelligence (AI) took on an increased importance with how business got done. Businesses invested in technology to assist in the change to work from home and the need to be social distanced. COVID accelerated a process that was already in process.

For decades the US economy has suffered from stagnant wages and stifled productivity. While the economy has grown in GDP since 1970 growing from $1 trillion to $18.5 trillion in 2016 and $20.513 trillion in 2018, the American worker has not enjoyed commensurate benefits. (1) Wages have remained flat for decades. 

In the past, studies have shown that part of the reason for this was the development of the computer and its influence on businesses improving efficiency. 

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Climate change, environment, retirement, risk management, Socially Responsible Investing, SRI

How to Reduce Your Carbon Footprint

People are becoming increasingly aware of the consequences of climate change. In October of 2018 the UN Panel on Climate Change stated we have 12 years to halt the growth of CO2 if we hope to avoid the worst possible consequences of global warming. (1) Yet following the shutdown of the global economy in 2020, the release of CO2 has accelerated. “In 2021 global energy-related CO2 emissions are projected to rebound and grow by 4.8% as demand for coal, oil and gas rebounds with the economy. The increase of over 1 500 Mt CO2 would be the largest single increase since the carbon-intensive economic recovery from the global financial crisis more than a decade ago, it leaves global emissions in 2021 around 400 Mt CO2, or 1.2%, below the 2019 peak.” (2)

Atmospheric CO2 in June 2021 stands at 418/ppm. In June 2020 the figure stood at 416/ppm. Ten years ago, in June 2011, the measure stood at 390/ppm. (3)

This awareness that the build-up of atmospheric CO2 is accelerating has led to many projects that are working to effect change. Greta Thunberg has raised the awareness of students and leaders to protest the inaction of adults on Climate. John Lui and others have organized eco-restoration camps to foster regenerative agriculture and to plant many more trees in degraded environments. Many foundations and pensions are pursuing divestment strategies from fossil fuel companies to reduce the capital available to produce carbon intensive projects. More people are turning to socially responsible investing as a way to have their own investments impact what the future will look like.

Continue reading “How to Reduce Your Carbon Footprint”
Climate change, environment, ESG, Socially Responsible Investing, SRI

Greta Thunberg, David Hume, “State of Nature” and Climate Change

The climate crisis is worsening…

In a speech to the Austrian World Summit in June 2021, Greta Thunberg called out global leaders for their inaction. (1)

“During this time, more and more people around the world have woken up to the climate and ecological crisis, putting more and more pressure on you, the people in power. Eventually, the public pressure was too much and you had the world’s eyes on you. So you started to act…

Not acting as in taking climate action, but acting as in role playing, playing politics, playing with words and playing with our future, pretending to take responsibility, acting as saviors as you try to convince us that things are being taken care of.

Meanwhile the gap between your rhetoric and reality keeps growing wider and wider, and since the level of awareness is so low, you almost get away with it.”

Greta Thunberg raises a crucial issue that needs to be addressed for humanity to overcome the climate crisis…

Continue reading “Greta Thunberg, David Hume, “State of Nature” and Climate Change”
economy, interest rates, retirement, risk management

2021 Inflation and Parallels to the Seventies

My most vivid memory of the Seventies is sitting in the car with my siblings and parents in a mall parking lot the week before Christmas and my mother crying because they couldn’t afford presents and had to file bankruptcy. For a 12 year old it made the challenges of real life… real.

The seventies were a traumatic time for many Americans… the end of the Vietnam war, the political chaos of Watergate and Nixon, the oil embargo, gas rationing throughout the decade, the suffocation of unions, the loss of jobs and industries as Japan and South Korea became exporters. Economic instability was an ever-present cloud.

Moving in waves through the decade, the economy suffered from bouts of inflation and deflation. It made policy decision-making challenging at best… boost the economy to keep it from slowing down, or is the economy running too hot?

When you drill down one sees many similarities between conditions that led to the “stagflation of the 1970s” and the situation we find ourselves in post COVID.

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Climate change, economy, environment, retirement, risk management

Global future growth… and Climate Change

A recent Bloomberg article titled “The Global Growth Hotspots of the Future Are Here” discussed an HSBC report which advises that investors need to focus on the growth of cities in the Emerging Markets. (1)

“While wealthier countries are more urbanized today, the proportion of urban to rural dwellers in emerging markets is expected to climb to 63 percent in 2050 from 50 percent now, according to the study, which draws on research by McKinsey and the United Nations.

Developing nations’ emissions are rising fast and the report predicted that their share of cumulative emissions would reach 51 percent by 2020. (2)

By 2050 some 5 billion people – more than half the world’s population – will live in emerging market cities, and account for more than half of global gross domestic product growth.

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Climate change, entrepreneurship, environment, ESG, life insurance, new economy, protection, retirement, risk management, Socially Responsible Investing, SRI

Embracing the Future: An Interview with Charlotte Markward

I met Charlotte and her Husband Randy years ago at a Green Drinks in Philadelphia. It was before the days of Tesla, widespread solar power and organic food sections at the grocery store. People got together to share a beer and dream about a future that would be more sustainable. Things have changed a great deal in the past few years.

Charlotte is a graphic designer based in Philadelphia. She has agreed to share some of her experiences and insights so that we all might have an easier path to financial security.

Charlotte has been interested in supporting socially responsible investing for many years. I asked her what it means to her. Charlotte said, “For one thing it’s smart. We have a finite amount of resources and we are running out of them. To continue doing things in the old ways is to set yourself up for failure. Green investment is where the growth will be.”

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income, interest rates, retirement, risk management

“Rising Prices in the Economy”: Inflation Post COVID

In September 2020 Jay Powell announced that the Federal Reserve would adjust how it reacts to inflation, one of its chief mandates, and allow inflation to run hotter for longer. The expectation is that it will be several years before the Fed raises interest rates. Traditionally, elevated rates of inflation indicate the economy is operating at full capacity and may be in danger overheating. Following the COVID recession of 2020 the Fed is trying to create a positive environment for the recovery.

In the Spring of 2021 signs of inflation are abundant. Since the fall of 2020 commodity prices had risen dramatically. Lumber prices had soared as supply constraints limited what was available, especially as housing prices went up and building accelerated. Copper surged to new record highs. Wheat, corn and other food commodities went up as the economy reopened and supply couldn’t keep up with demand.

Among tech businesses a shortage of computer chips affected the building of everything from cars to exercise equipment. “Just in time” supply chains showed increasing strain.

To top things off, a gasoline pipeline was held hostage by a ransomware attack in early May 2021. The result was gasoline shortages and higher prices throughout the east coast US.

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Climate change, environment, risk management

Rising global temperatures can hurt global GDP

A study released by the science journal Nature makes the connection between the rise of global temperatures and the negative impact this can have on GDP around the world. In the study, titled “Global non-linear effect of temperature on economic production”, researchers found that “fundamental productive elements of modern economies, such as workers and crops, exhibit highly non-linear responses to local temperature even in wealthy countries.” Meaning as temperatures rise, the effect is much greater and accelerates in ways that are potentially disastrous. (1)

One of the lead authors, Marshall Burke of Stanford’s Department of Earth System Science, calls their study “the first evidence that economic activity in all regions is coupled to the global climate.”

The study continues, “If future adaptation mimics past adaptation, unmitigated warming is expected to reshape the global economy by reducing average global incomes roughly 23% by 2100 and widening global income inequality.”

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interest rates, retirement, risk management

The Impact of Financial Euphoria

On a recent rereading of John Kenneth Galbraith’s “A Short History of Financial Euphoria”, he outlines common characteristics from past financial bubbles including the Tulip mania of 1637, the South Seas bubble of 1720, the various booms and busts of 19th century America, the market crash of 1929, and the October 1987 market crash. While the financial instruments vary, the behavior of investors has many elements in common. Bubbles in financial markets have several characteristics in common.

One of the elements Galbraith cites in the financial bubbles he analyzes is the introduction of new financial instruments. Such new instruments offer the “investment opportunity rich in imagined prospects…” (p51) Added to these new instruments is the element of leverage. Leverage allows investors to capture more profit than is normally possible. However, leverage also introduces fragility into the financial system when the value of investments start to fall and leverage needs to be unwound. The unwinding of leverage leads to additional sales and additional losses. The collapse of bubbles has an “inevitable and depressive aftereffect.” (p67) Such a depressive aftereffect is manifested in weakened consumer goods demand, shaken business confidence, a fall in business investment, and a rise in business failures. The bursting of bubbles has a “substantial and ultimately devastating economic effect.” (p89)

Another critical element in the development of bubbles is psychological. “Individuals were dangerously captured by belief in their own financial acumen and intelligence and conveyed this error to others.” (p51) In this aspect, bubbles not only develop from financial innovation but especially because of psychological behaviors and characteristics.

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income, interest rates, retirement, risk management

“Data Dependent” Fed Changes Course and Markets React

In the Fall of 2018, equity markets sold off.

What was the cause?

Widespread view among economists was an expectation of slowing economic growth in 2019 and a Federal Reserve led by Chairman Jay Powell that was expected to continue to raise rates three more times in 2019.

As anxiety and stress built up in November and December, markets dropped. Between October 3 and October 29 the SP500 fell 9.7%. Between October 29 and December 7 the market bounced around rising 6.5% only to give it back and to fall .3%. However, in the weeks before Christmas, December 7 to December 24 the market fell another 10.7%. Showing the rapidness of the decline, on Christmas Eve the SP500 fell 2.6%.

On Bloomberg Surveillance on April 4th, Tom Keene asked Jim Paulson “Was December the mother of all cathartic events? It was so traumatic.” Jim Paulson responded, “I don’t ever remember a December like that ever in my entire career. It was original, and I think it shocked all of us, myself included that this happened in December… But it looks increasingly like the oddity, what was incorrect and inappropriate, was the December swoon… and we may be overdid the selling more than we should have.” (2)

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Climate change, environment, risk management

Climate Change, Rising Temperatures and Food Security

Increasing temperatures globally will have an impact on the economy, and especially the supply of food.

“Scientists have high confidence that global temperatures will continue to rise for decades to come, largely due to greenhouse gases produced by human activities. The Intergovernmental Panel on Climate Change (IPCC), which includes more than 1,300 scientists from the United States and other countries, forecasts a temperature rise of 2.5 to 10 degrees Fahrenheit over the next century.” (1)

Temperature is a primary factor affecting the rate of plant development. Warmer temperatures expected with climate change and the potential for more extreme temperature events will impact plant productivity. (2)

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entrepreneurship, income

In Memoriam, Alan Krueger and Raising the Minimum Wage

Anyone who knows me, knows I don’t easily shed tears. But I did on Monday March 18th, 2019. For over an hour I wept.

On this day it was announced that Alan Krueger, beloved Princeton economist, had passed away over the weekend. (1)

Michael Mckee of Bloomberg said “He was one of the nicest people in economics, always willing to sit down and explain concepts to you, to talk with you, it’s a real shock…” Peter Coy continued, “If he were just a nice guy it would be one thing, but he was also a deep scholar…” McKee explained, “There are a lot of economists doing important work, but Krueger really had an enormous impact on public policy outcomes.” All concurred, “It’s a tragedy.” (3)

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health, life insurance, protection, risk management

The Benefits to a Healthy Diet: Quality of Life, Financial Security and Legacy

Its no secret that human longevity has been growing due medical advances over the past 30 years. Life expectancy in 1960 was 66 for men and 73 for women; in 2010 the average expectancy was 80 for men and 84 for women. (1)

However, in addition to longevity, one of the issues people have struggled with is a decreased quality of life in a person’s later years. Chronic diseases play a major role in limiting peoples experience and inflicting pain on the elderly and their families… cancer, strokes, dementia, respiratory, Parkinson’s, Alzheimer’s. 

These issues not only reduce a person’s enjoyment of life but affect their financial health as well. The expenses associated with medical care and long-term care are substantial. But baby-boomers are not sitting still…

Continue reading “The Benefits to a Healthy Diet: Quality of Life, Financial Security and Legacy”
interest rates, retirement, risk management

Market Risks and the Wall of Worry

For years, one of the biggest issues facing the economy has been excessive debt and leverage. Yet even with these problems, prior to COVID-19 it was commonplace to see headlines in the financial media that read…

“Current Bull Market Continues To Climb A ‘Wall of Worry’” (1)

The “wall of worry” is one of the phrases frequently used to illustrate the resistance or fear of investors to invest in a stock market that had earlier gone down.  Since the Great Recession of 2008 and the financial crisis many investors have worried about the possibility of another financial crisis.

In a 2018 conversation with clients I was asked about a recent stock market pull back and if a problem in the market… could cause another financial crisis. This was an issue that was on many people’s minds these days.

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entrepreneurship, health, key man insurance, life insurance, protection, risk management

Protecting your business, and your legacy

Most business owners, CEOs and executives are laser focused on driving their business or enterprise towards success. They are responsible for preserving and expanding sales and revenue. They are responsible for hiring and firing. They are responsible to investors and stakeholders to manage risk and ensure success. They handle client relationships, research and development, marketing and IT… As leaders they wear many hats and carry a lot of weight on their shoulders.

But what happens when a CEO or leader within a company passes away? What is the impact on the business and the employees who depend on that business for their livelihood?

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economy, income, interest rates, retirement, risk management

Are Bond Yields Moving Higher?

On October 3rd, 2018 the 10-year yield moved dramatically higher increasing 3.3% in a single day. Pundits have listed many reasons for rates and bond yields to move higher… a strengthening economy, decreasing unemployment, rising oil prices signaling inflation, a Federal Reserve committed to further rate increases into 2019. (3)

These pressures had been building for some time and signaled a good economic environment.

However, there are a few factors that some view as critically important moving forward in deciding how much bond yields could move up as well as how quickly.

Continue reading “Are Bond Yields Moving Higher?”
economy, retirement, risk management

Tariffs, Trade Wars, and Risk

“All things being equal, trade is a good thing, although it can also eliminate certain jobs and hurt some firms or workers. On balance, though, trade creates jobs and boosts the overall welfare of a country… Trade can be an engine of increased production, economic growth, development, and poverty reduction.” (1)

–Richard Haas

In 2018 I had several clients ask about what impact the proposed trade tariffs might have on their retirement plans.

On June 19th, 2018 the S&P 500 sank the most in three weeks with industrial companies getting hit hardest after President Donald Trump threatened tariffs on another $200 billion of Chinese goods, and the Asian nation pledged retaliation. (2)

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income, protection, retirement, risk management

How to set up Guaranteed Retirement Income

How much income are we going to need in retirement?

How do we make sure we don’t outlive the money that we have saved?

Every person’s retirement needs are different, but even within the variability, we all have several expectations in common.

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Climate change, environment, retirement, risk management

Climate Change, Sea Level Rise and Retirement Risk

One of the oft repeated risks from climate change is the threat that comes from rising sea levels. Depending on the forecast, even in the most optimistic ones, seas are projected to rise several feet before the end of the century. With the accelerating build-up of CO2 and the rate of temperature increase (2017 being the hottest year on record), many expect dramatic sea level rise to occur much sooner than most expect. CO2 concentrations in March 2020 was 414.5 ppm, much higher compared to 411.97 ppm in March 2019. (1)

While people might want to buy shore property for benefits that include potential rental income, capital appreciation and personal use, they also face potential risks of hurricanes, sea level rise, etc. Some of these risks can be mitigated by purchasing flood insurance.

Last summer I explored the question, “if sea levels rise, what will be the impact on a clients’ net worth and portfolio?”

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health, life insurance, protection, risk management

Protecting Your Family’s Financial Future in an Age of COVID

As of August 5th, 2020 COVID-19 has claimed 156,311 American lives. (1)

In a story that is far too common in 2020, a Las Vegas news station reported that a husband and father recently passed away from COVID-19. He was 42 years old and “the picture of good health.” (2)

“He was furloughed from his job so he didn’t have health or life insurance and now medical bills are mounting for his wife and her three young daughters.” 

“Nobody ever anticipates that someone is going to pass at 42 years old so honestly when he was laid off, it never crossed my mind that oh my gosh we’re losing our life insurance,”

Continue reading “Protecting Your Family’s Financial Future in an Age of COVID”
economy, income, interest rates, retirement, risk management

Where to from here? July 2020

It has been a difficult year on many levels. Given the past few months I want to catch up in several areas… with what has transpired since the spring, where things currently stand in the economy, and what I foresee going into the second half of the year and beyond. This may take a while…

As a reminder, the current economic downturn did not occur spontaneously due to COVID. In September of 2019 Repo rates indicated problems in lending markets. For several year’s companies have been borrowing extensively, especially at lower levels of credit quality. In the Fall of 2019 Morgan Stanley noted that over 20% of corporate borrowers were “zombie companies”; companies with no positive cashflow, excessive debt, and borrowing to stay afloat. This was the situation when the economy was “healthy”.

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interest rates, retirement, risk management

Fed Reluctant To Raise Rates While Raising Questions Around The Economy

On July 29th, 2020 the federal reserve committed to keeping interest rates pinned to the zero bound and stated their expectation to maintain this position for years to come.

In his meeting with reporters to discuss fed policy, fed chair Powell stated, “We haven’t even thought about thinking when we plan to raise rates.” The FOMC statement explained why; The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.” (1)

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