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)

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

Continue reading “5 Tips to Make Your Retirement Savings Last”
economy, income, 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. Two years ago the President 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 two 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.“

Continue reading “Trick or Treat? Revisiting The Potential Downside of Tax Reform for Investors”
economy, income, interest rates, retirement, risk management

Economic Fears and Managing Risks

The economy continues to slow and is having an effect on markets. Incoming ECB President Christine Lagarde stated the US trade war with China has “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.

Continue reading “Economic Fears and Managing Risks”
economy, income, retirement, risk management

Investing with Stocks at Record Levels

I have talked to many clients. I have read and listened to many economists and Chief Investment Officers who are nervous about investing hard earned savings when markets and indexes are making new highs.

Many people feel the market is “due for a correction”; they worry about a “bubble bursting like 2008”; they look at the political environment and feel confused by what is happening in Washington DC.

Continue reading “Investing with Stocks at Record Levels”
economy, income, interest rates, retirement, risk management

Recession Risks Rise

In a recent presentation to investors, Doubleline CEO Jeffery Gunlach stated he sees a 75% chance of a recession by 2020. (1)

Many signs are popping up that point in the same direction.

In August 2019 the yield curve inverted. (2) An inverted yield curve is seen within the financial industry as a reliable leading indicator for recessions.

Continue reading “Recession Risks Rise”
economy, new economy, 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)

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.

Continue reading “Management Flaws in Corporate America”
Climate change, economy, environment, ESG, retirement, risk management, Socially Responsible Investing, SRI

Divestment From Fossil Fuels Gathers Steam

As an investor in todays 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 the 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”
economy, new economy, 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 of such announcements.

While the monthly jobs numbers are heralded as a sign of a strong economy there are undercurrents of weakness. More than half of all American’s have little or no savings.(1) Many companies report a weakening expectation for revenue and growth.(2) CEOs are concerned about the effects the trade war and it has caused many companies to delay capital investments and expansion.(3)

Many analysts have already indicated that Europe is in a recession. Some expect a recession in the US within the next 6 to 12 months.(4)

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”
income, interest rates, retirement, risk management

Being Too Fearful Can Hurt Financial Security

I have spoken to 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.

In a recent study the World Economic Forum examined the savings shortfall around the world… the situation where due to increasing longevity people are expected to outlive their savings. One of the key findings was the demonstration that Japanese savers are extremely conservative in their investing style, avoiding equities and only using cash and bond equivalents for saving. The result is Japanese women face a savings shortfall of 20 years compared to American women who have a savings shortfall of 10.9 years. A lack of growth in assets hurts financial security. (1)

Continue reading “Being Too Fearful Can Hurt Financial Security”
Climate change, economy, environment, interest rates, retirement, risk management, SRI

Climate Change impacting Economic Growth

In the past decade the global economy has struggled to produce sustained economic growth. While the financial crisis of 2007-2009 and the Great Recession left a lasting impact on companies and decision-makers, the structural changes to the economy since then have been substantial.

Companies have adapted by changing the employment structure of how they operate. Many companies, to cut costs, have changed many jobs from w2 positions to contractor or out sourced positions. This has allowed large companies to pay less in terms of benefits to their workers; benefits such as health insurance, disability insurance, life insurance and retirement savings.

Continue reading “Climate Change impacting Economic Growth”