Excel in Retirement

Inflation simply defined is when our money buys less than it used to buy. Conventional wisdom says we need equity exposure to keep up with inflation, and I don’t disagree in principle. But where it gets tricky is when we have an over exposure to stock market investments and a correction happens. A down stock market portfolio plus biting inflation is like a one-two punch to knock you out. Some people will have a hard time getting back in the fight after that.

This is why we recommend having a safety net of investments that cannot lose value. These are our fallback positions when times get tough in the economy, because taking distributions off our stock market portfolio in a down market may cause us to run out of money even quicker.

I don’t mean to harp on stock market corrections or preparing for the worst, but in retirement major losses to your portfolio matter a lot in whether you’ll financially make it or not. What’s worse is that the government has figured out how to lessen the impact of stock market corrections buy using quantitative easing. The problem is that this ultimately devalues the dollar and causes inflation.

Quantitative easing (QE) is when the government buys securities and increases the money supply to incentivize lending and investing. It increases the government’s balance sheet and the government is essentially creating money to facilitate this. This causes inflation.

 It’s a double edged sword. Should the government allow the markets to naturally correct and create an unknown amount of financial pain for people or do they use QE to stabilize markets today but create a potential inflation problem later?

These issues necessitate a new approach of active portfolio management. Last week, I explained our methodology for using algorithmic models to mortgage risk in our equity positions. What that means is that we are not riding the Dow to its low, but rather through computer programs going in and out of investments to mitigate against major losses.

We have a unique approached to portfolio management that you’ll be hard pressed to find elsewhere. When you’re ready to experience active portfolio management with less fees and a comprehensive approach to your whole paradigm, please let us know. As always you can reach us by calling 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 the 1950s, economist Harry Markowitz developed a "Modern Portfolio Theory." His theory aims to maximize returns for a given level of risks. Out of this theory was birthed the idea of buying equities or stocks and holding them. Markowitz won a Nobel Peace Prize for his research.

Warren Buffett came along and popularized this style of investing, but then a hedge fund manager named Ray Dalio thought we could track data and do better than buying and holding investments. Many people are stuck investing the way people did seventy years ago, but things have changed. Dalio, pictured below. helped change that.

Dalio used computer algorithms to track data that allowed for certain triggers to be activated when trades should be executed. Obviously, a team of asset managers are responsible for managing these programs and the purpose of this investing technique is to mitigate against losses.   

This investing method is called algorithmic investing. We use models that have internal algorithms that allows a client’s account to go in and out of positions depending on what’s happening in the overall market, economy, and world. We have developed strategic relationships with well renowned asset managers that manage billions of dollars using these methods.

 routinely talk to people who never recovered from the 2000 to 2010 stock market performance. That decade, commonly referred to as the ”lost decade,” because since the S&P 500 index was created that was the worst decade for the index. You may have had a negative return if you had been invested in an index that mirrored the S&P 500 during that decade.

If you used the buy and hold method you saw years of negative returns, and if you were taking income off of your investments you saw your principal dissipate. Algorithmic investing is a better way to avoid this common pitfall. 

Why? Because the goal of investing this way is to lessen the chance that we will have to wait years for our money to break even. If you are using your money to live on or if you like the idea of keeping your principal intact more than you like taking big gambles this may be appropriate for you. The days of riding the stock market to the bottom are over. We don't have to ride the volatility roller coaster due to our algorithmic investing methods. 
David Treece would be happy to schedule a 15-minute call with you to discuss this concept more. You may call our office at 864.641.7955 to schedule a call.

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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 this show David goes over how to adjust our goals and aspiration halfway through the year. He tells an engaging story about kayaking down the James River. Then he discusses a recent interview with economist Gary Shilling. 

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.

It’s so predictable. It’s so hard to start again. Everything inside me doesn’t want to start the process again. I told you a while back I got busy and quit running. I needed to start back. I feel better, my mood is better, and my clothes fit better!

After a few days of running, something magical happens. It happens with most forms of exercising. The pain and agony shift to enjoyment and with running it typically means I start running faster and my body feels more comfortable.

If you are ever in need inspiration for running read the book Come Run With Me written in 1979 by Pete Strudwick. Pete was born with no feet and takes up running. In the book he tells his story of how he trains. If he can run, I can run.

Slowing down and sitting around really isn’t a combination for success in any equation during our lives. We have been blessed with time here on earth and in order to make the most of it we have to be doing or becoming the kind of person we should be

An analogy to financial planning can be easily drawn. We all know that if we start saving for retirement in our twenties, we are equipping ourselves for success down the road. But we put off and put off and avoid the discomfort and do what we we’ve always done. We may learn the behavior of those around us and replicate it for better or worse. As we approach retirement, having a written retirement plan in place becomes very applicable so that we can make logical decisions.

When we have a written plan, we have a guide for how and why our money is allocated, the ways that it is. I would be happy to work with you on creating your written financial plan. We will look for ways to optimize what you are doing and look for pitfalls people often face on their path to retirement. There’s no cost to this and there’s no obligation to hire us to help you invest your money. We’ll help you develop your plan completely for free. Call our office at 864.641.7955
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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.

Even when the weatherman tells us a bad storm is coming there always seems to be an element of surprise when the storm arrives. It’s almost like we didn’t believe the meteorologist would get it right this time. 

Sometimes we poke fun of people who weren’t prepared and got drenched in a downpour or sometimes we truly emphasize with people when a tornado uproots a hundred-year-old tree in their front yard like we’ve seen recently in Spartanburg.

The last thing you want to happen is for you to get a caught in a financial storm with no safety net. It’s easy in markets like these to exude confidence and grasp to squeeze out the last little bit of interest, but chasing growth with no guardrails on your financial plan leads to getting drenched when the financial storm arrives. We normally doubt it will come like we doubt the weatherman.

When you’re ready to begin building your all-weather financial plan that equips you to be prepared for an array of financial circumstances 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.

I’ve interacted with countless people who are always looking over their back, waiting for something bad to happen to their 401k. They fear a stock market downturn, Congress increasing taxes, or future healthcare expenses. What people are searching to know is, “Am I going to be, okay?” 

Unfortunately, some people live with these nagging thoughts, but they don’t have to. There are strategies to mitigate the risk of market downturns, our rising tax rate environment, and even long-term care expenses. We address each of these with our clients. Our goals is not to provide a financial product to you, but to solve problems and to be a voice of reason for you. 

We do ourselves a disservice when we plug into products without developing our goals beforehand. When we figure out our problem we want to solve, then we can find appropriate financial solutions to fit those needs. 

 It’s like a teacher assigning you a math problem to do, then giving you a calculator. You may have what you need to figure out the problem, but you don’t know how to go about solving the problem on the calculator. If we can learn what the goal is we are closer to being on our way to solving the problem. 

 If you are worried about how your investments are allocated and wonder if you’re in good shape it may be worth investigating. I’d be happy to share more of our process of helping folks in a 15-minute call. If you click on the link HERE it will pull up my calendar and you can select a time to speak about this. I want to help you eliminate worry and fear! You can always reach us by calling 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. 

A logical way to determine if we can afford to retire, or if now is the right time, is to figure what your expenses are per month.

Conventional wisdom is you want to be able to replace 70% to 80% of your current income in retirement or as close to 70% as possible. 

So, how do we go about projecting how much income we can draw from our savings? With stock market investments, we can look at reports that indicate what has happened in the past.

However, what the future holds may not be similar to what has happened in the past. We’ve never had $28 trillion in national debt or so many unfunded obligations as a country. We also have a budget that hasn’t been balanced in twenty years. Using past performance of the stock market to indicate what we can expect to earn in the future may be problematic.

Remember, when we are working, we are in an income and accumulation phase. What this means is that we are planning to be invested for a long period and can wait for our money to come back from stock market corrections.

When we are getting ready to retire, or we are retired, we are in an income and distribution phase. The goal becomes figuring out how I can take consistent income off my accounts and make it last for as long as possible an ideally for the rest of my life?

For our stock market positions I believe it’s essential to have active management. How we do this is we have strategic partners actively managing portfolios with varying objectives. For many retirees the goal is to lessen the impact of major market gyrations. We look to match our portfolio managers up based on your goals and objectives.

It’s not a secret in our business that we use annuities as the bond alternative when we construct financial plans. By and large, bonds aren’t effective in today’s interest climate at providing fixed income. The correct annuity can provide bond like returns and have guaranteed principal protection. What that means is that the annuities we use are safer than bonds.

When you are able to use an annuity to provide for basic lifestyle expenses and know that that block money is insured against market losses, you are able to use the equity portion of your portfolio to grow your money. Thereby, allowing yourself a greater opportunity to keep up with our rising inflation environment. 

We’re not a fit for everyone, but we care about protection from both the sun and loss of principle. For many people we’ve been able to be the logical voice in their retirement planning decision. When you’re ready to learn more about how we may able to help you 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. 

Many people have experienced amazing stock market returns over the last decade. It becomes addictive. A lot like always becoming more competitive on the bicycle, but life changes. Our circumstances change and we need to change our mentality. Ten years ago, you were younger and may have still been working. You could afford to have more risky allocations, but when you are retired, you’re typically no longer categorized as a long-term investor. You may need your money sooner rather than later. It makes sense to begin taking some risk out of your equation if you can’t wait for your money to come in a stock market correction.

I’ve had my eye on a single speed basic bike. It has one gear and is made for cruising around, nothing too serious. I found a shop in Shelby, NC, that had one and last Saturday we drove up there to buy it.

When Mallory and I went on our first date, we met in Shelby. It was about halfway between where we were both living. So, we had lunch at the pizza restaurant where we met the first time. Enough with the sap! Back to the bike analogy.

With a single speed bike there is little that can go wrong with it. Even an inept mechanic like myself can work on it. As we age, it makes sense to begin simplifying our financial plan and having a quarterback that can help you oversee what you have going on. It’s no secret that if we live long enough, we won’t always be as mentally sharp as we are today.

In today’s world, it’s not uncommon to have several jobs in our careers. At each of those employers people will commonly begin a new retirement plan. It’s important to have your accounts working in harmony to create your masterpiece financial plan.

When you’re ready to learn more about how we work with folks, just reply to this email or 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. 

The government has also been providing liquidity to the economy by buying billions of dollars of government bonds per month. I believe this is adding to the inflationary pressure. The Federal Reserve is faced with a challenging dilemma.

Does the Federal Reserve attempt to raise interest rates? Or does it continue to allow inflationary pressure to mount? If rates go up that may cause major gyrations in the stock market, and lending may decrease. If people aren’t buying homes or cars or boats as much that’s means manufactures may lay people off. And one of the Federal Reserve stated objectives is to have maximum employment. This lessens the chances that the Federal Reserve will increase rates.

The next thing the government could do is slow down on its bond buying program, and that may cause stock market gyrations as well. It appears that the Federal Reserve is between a rock and a hard place, because the outcome probably isn’t going to be favorable either way. 

This is why it’s important to have a safety net around your portfolio. If you have a portion of your money that you are guaranteed to not lose in market downturns that may allow you to take greater risk with the other portion of your finances.

We know that being invested in the stock market is the way to keep up with inflationary pressure. As inflation rises, the stock market tends to increase. That’s why it’s important to be invested in the market with a portion of your money.

But we want to be diversified so that inflation risks, legislative risks, and market risks are mitigated against. Creating a balanced approach where a portion of your money is prudently invested in the market with specific goals around why it’s invested the way it is the first step. Secondly, having a portion of your assets that cannot go down in value is critical as we approach retirement. 

When the market is down, we want to avoid taking income out of our stock market investments. Taking distributions in a down market cuts into our principal and may cause us to run out of money quicker than we otherwise would have. 

When the market is down, we would be better off taking distributions out of our guaranteed never to lose portion of our portfolio. This may allow us to stretch our money further.

No matter what amount of money you have, most people want to have as much of it as possible for as long as possible, and this is one of the strategies I’ve found that helps facilitate that objective.  

If you would like to discuss this further or have questions, 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. 

The Washington Post recently ran an article titled 95-year-old might have found the key to longevity: A purposeful life.

The article described how Olga Murray, who is 96, has flourished despite the COVID lockdowns and how she has found meaning in her life. She lives a life of gratitude for the vitality she has. The article states she will commonly tell people “I feel so fortunate. You can’t imagine.” It’s amazing that thankfulness attracts blessings in our lives.

While her mother lived to be 98, Olga has done her part by eating healthy and working out three times a week. The article states, “Scientists increasingly are finding that some variation of that third factor – call it living with purpose, finding meaning in life or just engaging with something larger than yourself- can be a particularly healthy pursuit.”

A study conducted in 2019 of 7,000 older people revealed that “living with a sense of purpose can improve the quality of those final years and even prolong them.” She stated, “I have always loved children, and have endless patience with them — not as much with adults.”

At age 59 she went on a trek in Nepal and she was intrigued with how happy the children were despite what many would deem miserable circumstances. The kids were malnourished and had no toys but they had joy that was unfamiliar in industrialized countries.

 She interacted with a family there and the kids were of a fortunate few that had the opportunity to go to school, but they had to walk two hours to get there. Can you imagine? 

During her trip she had an epiphany that she wanted to spend the rest her life helping Nepalese children. She went back the following year and with the help of others began organizing college scholarships for a few of the children.

A few years later they launched a non-profit where hundreds of children were able to obtain scholarships and they helped house homeless children.

It’s easy to develop an identify in the work that we spend 30, 40, or 50 years doing, and once we retire it may be easy to lose purpose. There are many worthy causes that you can find purpose in by helping them by volunteering your time and expertise. Our value to society doesn’t cease when we retire, and I’ve found some of my most fulfilled clients have been those who had a reason to get up each morning. If you’d like to read the article, click 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.