Episode 38: Is the 60/40 Portfolio Dead?

A 60/40 portfolio refers to a traditional mix of accounts with 60 percent invested in U.S. and international stocks, plus 40 percent invested in bonds and cash. This has been the template for a “balanced portfolio” for about fifty years, although the mix of investments has changed a lot over time. Some advisors like to use actively managed strategies to fill out a 60/40 portfolio, while others - like Flourish - focus on less expensive and more predictable index strategies. There are lots of combinations for investors to try, and the 60/40 portfolio has been a very successful investment strategy over the years.

Despite that, some economists are saying this investment approach is on its way out. Is it dying, though, or simply taking a nap? Jay Pluimer takes you through the details in this episode of the Flourish Insights podcast.

Always check back next week for more Flourish Insights with Jay Pluimer and don't forget to check out our insights blog at https://www.flourishinsights.com

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Episode 37: Mind the Wealth Gap

The stock market and the U.S. economy have experienced a spectacular recovery from late March 2020, when the coronavirus crisis had our lives in shutdown mode. This recovery has also highlighted the growing disparity, however, between the “haves” and the “don't have as much.”

The term “wealth gap” refers to the unequal distribution of assets across households in America, and we are currently experiencing the largest gap in 70+ years. For example, the bottom 50 percent of U.S. households accounts for just two percent of our nation’s wealth. Though this episode is not about making everybody equal, understanding the wealth gap - and the factors driving its growth - is important for all of us.

Always check back next week for more Flourish Insights with Jay Pluimer and don't forget to check out our insights blog at https://www.flourishinsights.com

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Episode 36: Bond Investments in a Rising Interest Rate Environment

Frequent headlines over the last few months reference two similar messages: “Death of the 60/40 Portfolio” and “Higher Rates Spell Inflation Doom.” Both warnings are about our current environment of rising interest rates and lower investment expectations for bond investments. It’s a tough pill to swallow because we’ve been in a falling interest rate environment since the early 1980s. However it's important to understand that a rising interest rate environment doesn't necessarily mean inflation is right around the corner, or that now is the time to sell all your bond holdings. In this episode, Jay Pluimer discusses the outlook for bond prices over the next few years and what it could mean for investor portfolios.

Always check back next week for more Flourish Insights with Jay Pluimer and don't forget to check out our insights blog at https://www.flourishinsights.com

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Episode 35: What Biases Influence Your Investment Decisions?

There are as many different approaches to making investment decisions as there are colors of the rainbow, but they all share a few common elements. At Flourish, we embrace an aspect called behavioral finance, which explains how personal influences and biases affect the financial behavior of investors. Behavioral finance is a relatively new concept, and the study of human emotions and financial decision-making is still evolving. However, an important development has been that, despite our best intentions, we are not able to make rational investment decisions without being influenced by three broad categories of biases: representativeness, anchoring, and availability.

Always check back next week for more Flourish Insights with Jay Pluimer and don't forget to check out our insights blog at https://www.flourishinsights.com

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Episode 34: COVID Savings Equals Vaccine Spending

The fundamental belief for a post-covid economic recovery in the U.S is based on the equation that people saved money while the economy was shut down due to the virus, and that they are ready to spend that money as fast as possible as soon as the economy is fully open again. Is this the case?

Though millions of families have struggled to survive during the coronavirus crisis, the average American is in a better financial situation today than they were before the pandemic, with household savings rates up and debt down.

Jay Pluimer shares the facts and explores the potential for post-COVID consumer spending in this episode of the Flourish Insights podcast.

Always check back next week for more Flourish Insights with Jay Pluimer and don't forget to check out our insights blog at https://www.flourishinsights.com

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Episode 33: How Can the US Handle More Debt?

Across the United States, people are receiving money from the recent American Rescue Plan - the third economic stimulus effort over the past year. They total $3.2. trillion, which begs the question: How can the U.S take on this much new debt? The most important consideration is that all three relief plans were cheap to finance because of tools used by the Federal Reserve to keep the economy and markets in good working order - namely, very low-interest rates. The second consideration is that the U.S. economy is poised for growth, meaning additional income tax revenue for the federal government. Jay Pluimer dives into the details on this episode of the Flourish Insights podcast.

Always check back next week for more Flourish Insights with Jay Pluimer and don't forget to check out our insights blog at https://www.flourishinsights.com

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Episode 32: Turning 180 Degrees in 12 Months

We have now passed the one-year mark since COVID-19 caused an economic recession and a market depression happening simultaneously - and all just one month after the stock market hit a record high in February 2020. Twelve months ago, the news headlines were justifiably horrible. However, dramatic and proactive efforts from the Federal Reserve and the U.S. government led to the fastest market recovery in history, lasting just 128 days. What stands out in retrospect is how important it was for investors to stay fully invested despite significant financial fears and concerns from the Coronavirus. In this episode, Jay Pluimer revisits where we were just one year ago, and discusses the eye-popping returns investors are seeing today from a market that has bounced back.

Always check back next week for more Flourish Insights with Jay Pluimer and don't forget to check out our insights blog at https://www.flourishinsights.com

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Episode 31: What is the Real Unemployment Rate?

The coronavirus crisis has led to millions of lost jobs, and millions more workers who have jobs but who aren’t making as much today as they were a year ago. Official numbers state that the unemployment rate is at 6%, but that is misleading because it doesn’t count underemployed, marginally attached, and discouraged workers. In this episode, Jay Pluimer shares the real unemployment rate, provides context for why the Federal Reserve has been so active in stimulating the economy and discusses what it all means for consumer spending and the U.S. GDP.

Always check back next week for more Flourish Insights with Jay Pluimer and don't forget to check out our insights blog at https://www.flourishinsights.com

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Episode 30: Inflation: Too Hot, Too Cold, or Just Right?

Inflation means a general increase in prices and a fall in the purchasing power of money. We have not truly experienced high inflation in the U.S. since the 1970s when an oil embargo by OPEC caused prices at the pump that some families couldn’t afford. However, three current factors are leading many to wonder whether the U.S. economy is about to overheat with high inflation, as well as causing concerns about what this would mean for investors. It’s an important question because there are many misconceptions about how inflation impacts investments. A lot of people believe inflation is bad for the stock market, but the data shows differently. Jay Pluimer provides your five-minute primer on inflation in this episode and explains why he believes it is not too hot, not too cold, but just right to support a broad recovery from the pandemic.

Always check back next week for more Flourish Insights with Jay Pluimer and don't forget to check out our insights blog at https://www.flourishinsights.com

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Episode 29: What is Happening in the ESG World?

We’ve discussed the growing field of ESG investments in prior podcasts, and this week we’re examining the broader trends that could be supportive of Environmental, Social, and Governance investments in the U.S. and beyond. We’ll dig into the largest-ever annual decline in global carbon emissions and the $200 billion price tag for wildfires, floods and hurricanes last year. These statistics are leading to major changes from big companies - some of which might surprise you. We’re seeing the “virtuous cycle” of ESG in action, and Jay Pluimer provides context and shares trends with your portfolio in mind.

Always check back next week for more Flourish Insights with Jay Pluimer and don't forget to check out our insights blog at https://www.flourishinsights.com

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