Excel in Retirement

Michael Wilson (pictured below) is a strategist for Morgan Stanley. His firm is calling for a twenty percent drop in the near term for the market. “He sees earnings revisions from American corporations ‘and higher frequency macro data pointing to a decelerating economy, amid demand pull forward, supply chain issues and margin pressure; which he forecasts could lead to a 20% drop, a near-term outcome, in a research note dated Sept. 20th.”

Speculation may conclude that the bear market could turn out to be worse. We never hope for this, because most all investors are negatively impacted by a down market in one way or another. The point to note is that we are not helpless. We can take steps to create a safety net around our portfolio.

Bloomberg ran a recent article that said, “When the story of this era in financial markets is written, it will be said that many investors were overtaken with fanciful notions of money growing to the moon, leading them to make costly mistakes that could have been avoided with simple steps to safeguard and grow their savings. But this era is not over yet, and it’s not too late to get on the smart side of history.”

When there hasn’t been a major problem in the stock market in a decade, people tend to forget what may happen. The article continued, “Expectations about what a diversified portfolio can achieve have also become silly. In its latest survey of individual investors, French lender Natixis SA reported that U.S. investors expect their portfolios to generate a long-term return of 17.5% a year after inflation, a big jump from the already unrealistic 10.9% they expected in Natixis’s 2019 survey.” The old adage, “pigs get feed and hogs get slaughtered” seems appropriate.

There are a few ways to create safety nets around your retirement portfolio. We always want to keep six months of bill paying money in our savings account. After that safety net, there are allocations you can make with your money that carry less risk or no investment risk at all. The suitability of these strategies will vary from person to person.

It’s important to know what all your options are, because if you don’t, how can you make educated decisions? I’d be happy to schedule a 15-minute call with you to talk through all of your options. You may  call our office at 864.641.7955.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program. 

While September is great for apples, it is turning out to be a rough month for the stock market, and the culprit is multi-faceted. It’s easier on the mind when we can point to one thing that’s causing a disruption, but this time we’re not that fortunate. 

Over in China, a large property development company called Evergrande is on the verge of default, and from my research, their overuse of leverage is a major contributor. The company agreed to the use of highly speculative development projects and in recent years ventured into business sectors outside of their expertise. Because world economies are interconnected and dependent on one another, this appears to have caused uncertainty in world financial markets. 

A research company, Emerging Portfolio Fund Research, Inc., stated last week that “Almost $62 billion was pulled from cash accounts in the week of September 15th. Of that $51.2 billion went into equities, $16.1 billion into bonds and $37 million into gold.” Much of this appears to be motivated by the expectation that the Federal Reserve will continue its easy money policies, but that’s not what the Fed is signally. 

The head of the Fed has said they may begin tampering or reducing the amount of bonds the government is purchasing. The bond buying program is one of the leading factors causing higher inflation. The government has no money. What do they do? They print money or borrow money for any venture the government undertakes. Taxes are not enough to cover government spending. So, the government creates money to buy its bonds. Thus, driving down the purchasing power of our money. When there’s more of anything, it’s worth less. In stands to reason, when there is more money in circulation, it devalues current dollars. This is government induced inflation. 

This has worked out to a degree for equity investors because the market has gone straight up for more than a decade. A stock market crash would be devasting for people overly exposed to equities because it will be a double hit due to inflation. If portfolios are depressed and inflation is rampant, it could majorly impact purchasing power.

I’m always happy to discuss the topics I’ve discussed here further, answer any other questions, or share how we serve our clients. You may reach me at 864.641.7955.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.

In news that’ll make you do a double take, the Wall Street Journal reported last week that Robert Kaplan, a guy who sits on the board of the Federal Reserve, made multiple million-dollar-plus stock trades in 2020.

The Federal Reserve is a group of non-elected regulators who help determine what our interest rates will be, and whether the government should create currency to buy government bonds to stimulate the economy.

The officials like Kaplan are required to file public disclosures, and his fillings indicate that his trading represented at least $27 million. This is nothing out of the ordinary, though. Past board members have operated similarly. It just makes me scratch my head and think: should people who stand to directly benefit from the Fed’s decisions get to have a say in the Fed’s decisions?

Last year, the government was buying bonds issued by Apple. Kaplan’s disclosure indicates that he was trading Apple stock. Do you see what’s going on here? If there was ever an ethically gray area, this is it.

If you ever turn on CNBC, you may have seen a bald guy wearing a tie commenting on the stock market. His name is Jim Cramer. He’s normally bullish on the stock market, but last week he began blowing the alarm whistle.  The reasons go on outlined in show.

Bloomberg News wasn’t far behind CNBC in reporting that “top banks came out with a nervous message about the stock market.” Deutsche, Goldman Sachs, Morgan Stanley, Citi Group, and Bank of America all weighed in that the stock market is vulnerable to a pullback.

Are you getting sucked in to the market at what may be its top? Or have you allocated your savings in such a way to minimize the downside risks?
 
Do you know how much risk you have in your accounts? If we do nothing else for you, we’d be happy to show you so you can be informed. If you’d like to take us up on a risk report, call our office at 864.641.7955.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.

On Labor Day I ran the Reedy River 10k with my buddy Greg. I’m glad I committed to run it because I was dreading it! It’s hard to back out when you’ve told somebody you’ll be there. When we registered, the form asked what we anticipated our completion time to be, and I must have been thinking I could fly.

We were placed in the first heat to take off, and after about a thousand yards, I was thinking there was no way I would be able to maintain this pace. So, for the next 6.2 miles, I could almost hear a vacuum sucking me to the back of the pack.

It’s easy to see people passing me and become dissatisfied. I’ve found that when I begin comparing myself to other runners who may have a “runner’s body” or have other perceived advantages, it’s easy to get sulky. But what good does that do? After all, I heard it once said that the death of contentment is comparison.

Sometimes when people meet with me after we’ve talked about their accounts, they ask how their money compares to other people. I’m always careful to answer this question.

I think they are asking a deeper question than they sometimes may even realize. I’ve found normally what they are concerned about is do I have enough to retire. It’s easy when you don’t feel like you have enough money to become discontent, but it’s self-defeating. The better perspective may be to ask, “How can I make my money last as long as possible?”

The absolute wrong perspective is to feel like you should aggressively invest because you don’t have enough time or want to increase your money quickly. We hear that from folks with differing amounts of money. Remember, just because we perceive something doesn’t necessarily mean it’s completely accurate.

The flip side of this is called “overconfidence bias.” From a website called Toptal, “Outside of finance, in a 1980 study, 70-80% of drivers reported themselves to be in the safer half of the distribution. Multiple studies – of doctors, lawyers, students, CEOs – have also found these individuals to have unrealistically positive self-evaluations and overestimations of contributions to past positive outcomes. While confidence can be a valuable trait, it can also lead to biased investing decisions.” Obviously, there is a fine balance between feeling like you don’t have enough money and feeling like you are set no matter what comes your way. 

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.

At our church, we sing a song called The Father’s House. It’s a moving song about failure. It starts, “Sometimes on this journey, I get lost in my mistakes. What looks to me like weakness is a canvas for your strength. And my story isn’t over, my story’s just begun. Failure won’t define me ‘cause that’s what my Father does. Yeah, failure won’t define me ‘cause that’s what my Father does.” Cory Asbury, the song writer is pictured below. 

Sometimes we get stuck in the past. But as Zig Ziglar used to say, “Remember that failure is an event, not a person.” He also said any time the “opportunity clock” goes off in the morning is another chance to get up and go.

When you talk to people about their finances, you inherently learn about what has worked well for them and what has been a challenge. I talk with people who have overcome major obstacles, and went on to be successful. It’s inspiring, but what is even better is when we get to help them move from a bad situation to a better situation. 

In fact, when we experience setbacks, it often helps up hone our skills or create a better situation. In my life, things are normally not easy starting out. Don’t you envy the people who pick anything up and easily become proficient?

When I was in middle school, my parents wanted to home school me. I remember thinking that was fine with me. I could spend hours outside by myself. I’ve never minded some quality alone time. My parents had a challenging time teaching me the content as I got older, so they figured they should put me in school for high school.

Wouldn’t you know they picked probably the most academically challenging school to enroll me in? I was quickly overwhelmed with the more rigorous course work and my grades reflected it. I saw quite a few one legged “As” that year. 

It taught me some important lessons. When the going gets tough, we have to keep going. Failure is an event. It was never me. I ended up getting a wonderful education at that school, and I’m grateful that my parents did not choose the easy route. If it had been up to me, I would have been tempted to switch schools to try to find an easier route for my kid, but my parents never offered that solution.

I think more than anything, when we face these obstacles in life, what’s really happening is Jesus is extending his hand to help. The songs goes on to say, “When the Father’s in the room. Miracles take place. The cynical find faith. And love is breaking through. When the Father’s in the room. The Jericho walls are quakin’. Strongholds now are shakin’. Love is breaking through. When the Father’s...

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.

This concept relates to our finances, in that risk isn’t inherently bad. Taking that risk in a breakaway isn’t inherently bad, but it wasn’t for me. Assuming too much risk may not allow us to stay in the fight to see another day. Incorporating a plan that has the capacity for adjustments is essential. 

Morgan Housel writes in The Psychology of Money, “… Room for error is underappreciated and misunderstood. It’s often viewed as a conservative hedge, used by those who don’t want to take much risk or aren’t confident in their views. But when used appropriately, it’s quite the opposite. Room for error lets you endure a range of potential outcomes, and endurance lets you stick around long enough to lets the odds of benefiting from low-probability outcome fall in your favor."

A way to incorporate room for error in your planning is to create safety nets or guardrails around a portion of your money. One way to do that is having cash on hand like we mentioned above, but after six months of bill paying it becomes unproductive to have more cash. So, what do you do?

Rolling Stone magazine recently had an article addressing the top concerns of the Baby Boomer generation. The article states, “Make sure your investments outpace typical inflation rates. There are many things that have guaranteed rates or at least no risk for loss and higher potential upside. Consider multi-year guaranteed annuities, fixed indexed annuities, and of course, make sure you’re diversified into regular indexed mutual funds. Fixed indexed annuities and multi-year guaranteed annuities are both safe options to consider because they have minimum guaranteed interest rates. Fixed indexed annuities often have lower guaranteed rates; however, they have a high potential yield of return.”

 A fixed annuity not only helps you beat the typical inflation rates, it guarantees you won’t lose money in a market downturn. This type of vehicle should be used as a bond replacement, because most bonds have become unproductive with interest rates being near zero. Plus, it’s actually safer than a bond since it doesn’t carry the interest rate risks that bonds do.

 If you’d like for me to do a webinar on how annuities work, please email us at connect @ clientsexcel.com and let me know. I’ve been considering this, and I value your feedback.

The video mentioned early in podcast is linked here.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.

Last week, the stock market continued its wild streak and continued setting records. While Investing.com had a headline that Consumer Sentiment in U.S. Plunges to Lowest Since 2011. The data was based on a Bloomberg survey.

From the article, “Consumers have correctly reasoned that the economy’s performance will be diminished over the next several months, but the extraordinary surge in negative economic assessments also reflects an emotional response, mainly from dashed hopes that the pandemic would soon end,” Richard Curtin, director of the survey, said in the report.”

The government, in an attempt to keep interest rates low, is buying $120 billion worth of bonds per month. This increases the money supply and money trickles back into the stock market. When the government does this, the market goes up, but for what? While portfolio values go up, the purchasing power of those funds goes down.

For our folks who are entering retirement or are in retirement, the strategy shouldn’t be keeping up with the stock market. It’s about earning productive returns that can be repeated. When the government ends its bond buying program or an unexpected event happens and drives the market down, you may lose ground. 

From the book The Psychology of Money, “But good investing isn’t necessarily about earning the highest returns, because the highest returns tend to be one-off hits that can’t be repeated. It’s about earning pretty good returns that you can stick with and which can be repeated for the longest period of time."

When we’re able to earn consist returns we’re better off than swinging for the fence to hit a home run. In retirement, many times your income will be your outcome. If your portfolio is down your income may be diminished.

The author of the book also said, “Compounding doesn’t rely on earning big returns. Merely good returns sustained uninterrupted for the longest period of time – especially in times of chaos and havoc – will always win.”

Boy, do we have the potential for chaos and havoc? The Delta variant of COVID-19, vaccine debates, a new Middle East debacle in Afghanistan, and many others. Any one of these things can throw your apple cart off if you don’t have a well thought out financial plan to deal with it.

We have the tools to be able to help you avoid common pitfalls people face in retirement. You don’t have to get caught flat footed in the next stock market correction. We want to help you be successful! You can reach our office at 864.641.7955.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.

Sometimes I feel like I’m a researcher more than anything else. People come to me with big problems and I want to be the best possible resource I can be. I’m always listening to podcasts or buying another book to learn. And over the last few years, I’ve begun buying courses about specific topics

In a recent course, they made a distinction between “riches and wealth.” We tend to think about them as synonymous, or at least I did until I heard the difference

Riches can be income that’s only generated once, or isn’t sustainable. Think quick returns on our money that is fleeting or is not always going to be replicable. It serves us now, but we normally show back up at square one sooner or later.

Wealth, on the other hand, increases with discipline, and wealth continues to flow in because we have a replicable process for generating money. This allows us to increase our quality of life both mentally and physically. Mentally, because we are not distressed by trying to come up with solutions to the next issue that may arise.

Using our money with a wealth building mindset instead of riches mentally will inform our decision making as markets change and gyrate.

At our firm if we were interested in producing riches for our client’s we could order our client’s portfolio for that. It’s not hard, and it’s what most people do. But part of building wealth is building all weather portfolios that are capable of weathering a financial storm and even producing a return when markets become difficult.

So many times, we see people who would rather spend their time pulling their lures off the bottom the lake than using professional advisors who are trained in risk mitigation and how to help clients achieve their financial goals. As long as you’re willing to be patient like I was when I was fishing for the bottom and willing to not have access to a professional that’s fine. It takes all kinds of people to make the world go round as that saying goes.

Our desire of each of our clients is to help them build long lasting wealth in retirement so that they can focus on the important things in life. Things like the people in their lives and embracing the passing opportunities they have now. If we’re chasing riches, it’s hard to free ourselves up to enjoy the important things. Call us at 864.641.7955. 

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.

Following along can be a trap and cause us heartache if we’re not wise about who we’re taking our cues from. The Bible states that Solomon is the most wealthy person to have ever lived.

In today’s dollars some estimate Solomon would have a net worth of $1.2 trillion. For comparison, Jeff Bezos, who was the wealthiest person in the world up until last week when Amazon’s share price fell, is worth $192 billion. Solomon had over six times as much money has Bezos. 

God appears to King Solomon and tells him to ask for anything. Solomon thanks God for his favor that he had shown him and his father David, and Solomon proceeds to ask for wisdom and knowledge so that he can properly lead the people of Israel.

 2 Chronicles 1 states, “God said to Solomon, ‘Since this is your heart’s desire and you have not asked for wealth, possessions or honor, nor for the death of your enemies, and since you have not asked for a long life but for wisdom and knowledge to govern my people over whom I have made you king, therefore wisdom and knowledge will be given you. And I will also give you wealth, possessions and honor, such as no king who was before you ever had and none after you will have.’”

Are we asking the right questions? Solomon didn't put the cart before the horse. He knew if he had wisdom, then the other material things would flow to him. Maybe he was already wise enough to know how to ask for the right thing.

Before asking our questions we should figure out how to become more wise so that when we hear the answers, we'll know how to apply them. What good is knowledge without application?

In reflecting on these things, it seems it’s more important to pursue wisdom and knowledge so that when we have decisions to make, we can make prudent choices.

The natural question then becomes “How do I make prudent financial choices?” Years ago, I was taught in a class that everyone has a worldview. A worldview was defined as the lens through which we see the world.

 It’s important to take advice from people who have a similar worldview. A worldview isn’t an opinion about whether the stock market will crash this year or not. A worldview is a moral compass that guides you.

The second thing to look for is someone who has your best interest at heart. I think the easiest way to figure this out is to observe what a person is greedy about.  A person who is looking out for you is concerned about your outcome. They understand that if you have a favorable outcome, then they will have a favorable outcome. 

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.

A Market Watch article describing the chart said, “If you have a 401(k) and you’re of a nervous disposition, you probably don’t want to look at the chart.

Even by the standards of GMO, the super-cautious money management firm in Boston best known for its famous co-founder Jeremy Grantham, say 'it’s terrifying.'”

You’d never know such dire forecast exists if you only check your portfolio balance. For perspective; around last year this time the Dow was trading around 26,000 points. Ten years ago, the Dow was trading around 14,000 points. That’s about a 60% growth in the Dow over the last decade.

It’s almost like the index has been on a sprint. What happens when the sprinter runs out of air? A pullback happens. When the market corrects, if you haven’t done your due diligence by preparing, you may be impacted.

If you’ve worked with a financial advisor, you may have had a meeting once a year where the planner said “we need to rebalance your portfolio.” Does that sound familiar?

The advisor may make changes to your account. You may be weighted too heavily in bonds or stocks, and the advisor wants you to have the appropriate split. We typically don’t talk in those terms at our firm.

We speak on asymmetrical versus symmetrical terms. The balanced portfolio above is symmetrical. It’s a nice clean circle so to speak. Fifty percent bonds, and fifty percent equities.

We use an asymmetrical approach. The first thing we do is we use a bond replacement that does not have the interest rate risks that bonds have. Also, it produces returns bonds produce when interest rates are normalized. Our bond replacement strategy is our client's safety net where they may draw income from in down markets.

Secondly, we use portfolio managers that focus on algometric investing techniques. This isn’t a “buy and hold” strategy like most symmetrical financial advisors would use. We remove the human emotion of trading in the market and rely on computer algorithms to dictate when we should buy, hold, or sell.

Remember the above situation where people just want to hold on for a little more growth in the Dow? They are using human emotion to make their decision, but this isn’t to be diminished. We’re human after all. We are emotional creatures, but our money isn’t emotional and the stock market doesn’t care what we think may happen.

We’ve found asymmetrical modeling allows our clients’ money to be all weather proof. If you’d like to discuss this further or have questions, you  call us at 864.641.7955.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.