News, Opinion or Tabloid
Chances are, your eyes were immediately drawn to the small photo of the tornado. Our attention is naturally drawn toward an alarming photo or headline, particularly if there is a sense of eminent danger. It is this natural human trait which is used by news organizations worldwide to capture our attention and subject us to a series of advertisements which enables news media outlets to earn their profits.
When radio and TV networks, print media, cable and internet news organizations transitioned from “the nightly news” to “24 hour news”, they also had to sell advertisements 24 hours a day to sustain their investment. This required capturing and keeping our attention for longer periods of time, so “news reports” changed to “news shows” to engage audiences in a more compelling way.
News stories no longer needed to be meticulously researched, but rather, could be filled with opinions and innuendo. Stories no longer needed to appeal to all views, but rather, are designed to create loyal viewers who could identify with the news publisher’s ideology and message – thus, all other viewpoints would be their enemy, or worse, fools. Today’s news followers need to determine if their sources are news, opinion or tabloid.
So we are now a nation divided with an “us against them” mentality. We are either a CNN, Fox or MSNBC viewer, which translates to our identity as liberal, conservative or progressive. I am not sure who represents centrists anymore, but I am convinced those of us in the middle are basically ignored by the political class, yet, we are the majority of voters who get them elected into office.
It wasn’t long ago that clients contacted us with questions about whether they should buy or lease a car, start a business, refinance their home, get solar, or increase their contribution to their retirement plan. Although we still get those questions, we also regularly get client inquiries about whether news stories or headlines are true or not. If they are true, what should they do? If false, should they just ignore it?
We welcome inquiries about a myriad of topics and enjoy providing reliable information and guidance to help clients make confident decisions which are sound and appropriate for their families. Obviously, financial decisions is one area we have a high level of expertise, so nothing irritates me more than seeing misleading headlines and news stories which scare the heck out of people with crazy speculations that inflame feelings of insecurity or fear of loss.
The financial media routinely uses terms that create drama or alarm, which gets people excited and nervous. Here’s some examples: when the stock market is going up, it “soars” and you are left behind. When the markets decline, they “plunge”, which affects our sense of financial security. Either way, “soaring” of “plunging”, we’ve been had – or so we are led to believe.
The Weather and Financial Markets
Stock market volatility is a lot like the weather. Most days are pretty good, but small storms happen from time to time and are normal. We simply check how the stock market ended each day – up or down, and move on. However, unforeseen stock market “tornados” can happen suddenly and without warning, which cause us concern and require us to hunker down temporarily, but we know it will pass. Our investment and retirement portfolios are designed to absorb these short term effects.
Although economic “hurricanes” are rare, we respect the potential for their damaging effect. We strive to scan for conditions which may provide us with early warning signs and allow us to apply plans to minimize the impact of a financial storm. Although no one can perfectly predict future events, our goal is to get clients to their financial destination safe, comfortable and as confident as possible.
It is important to realize every storm or tornado is not a hurricane, so we don’t react when conditions do not warrant. We monitor many economy indicators, political events, monetary policies, tax legislation, market conditions and financial news so we can advise our clients to attain their financial objectives.
Constantly changing portfolio strategies and holdings is not productive in attaining clients’ financial objectives. Consequently, we generally modify portfolios for limited and appropriate conditions:
- Normal rebalancing
- Changes in economic conditions
- Changes in clients’ circumstances or objectives
- Substitute a fund with better performance or lower fees
Over the last few months we have been evaluating our monthly data, monitoring legislation, global financial news and met with our investment committee. We believe it is now an appropriate time to make some enhancements to our portfolios. Although not necessarily time sensitive, we will be contacting clients to discuss their situation and suggest modifications to their portfolios. We will also evaluate the potential tax impact of making changes to non-retirement portfolios.
Possible New Retirement Plan Legislation
The U.S. House of Representatives and the Senate have each written their own versions of legislation designed to improve retirement plans for current and future retirees. Generally, both plans call for a delay in required distributions from retirement plans and also allows those still working into their 70’s to continue to contribute to their plans. We are hopeful that Congress will get to work on this important matter and get it done before year end. We will keep you posted.
Save the Date – October 17, 2019
This is our 40th Anniversary and we have a very special Client Appreciation Event planned for Thursday evening, October 17, 2019. Barry Levalley has agreed to be our speaker for this special evening. Barry last spoke to our clients five years ago and received very high praise for his enlightening expertise on preparing and living a fulfilled life in retirement. His line “retirement is not just a 30 year weekend” will long be remember by all who attended. Since this is a client appreciation event, we will be providing all attendees with Barry’s book on retirement life, which he will autograph.
With what is sure to be a whirlwind election cycle, we are always available to help clarify the facts from fiction, so never hesitate to contact us to discuss your questions.