Nurturing Financial Freedom

As hard as this is to believe, the COVID-19 pandemic started three years ago.  Today, Ed Lambert and Alex Cabot look back at the economy and capital markets over that period.  Interestingly, both are close to where they'd have likely been without a global pandemic.

First, Ed looks at the economic data, from Factset, comparing GDP, inflation, unemployment, and the ten-year treasury bond rate.  And despite the stock market having its worst 23 day period ever in 2020, and $5 trillion in stimulus being pumped into the US economy, the unemployment and GDP are close to where they were three years ago.   Yes, inflation and interest rates have changed, but if you told us back in 2020 where we'd be in early 2023, we'd likely have taken it.

Alex looks at the markets next, checking the annualized total returns over the last three years.  Thanks to data from FactSet, he looks at Large, Mid, and Small Cap US stocks, Developed International, Emerging Markets, and REITS.    What's most remarkable about these numbers? Well, it's how unremarkable they are.   And this takes into consideration the tumult of early 2020, and the market drop of 2022.

As Alex says, we're on a roller coaster.  But they key is not giving into human nature and seeing how high we can go, but rather growing our assets over time.

Financial education and literacy are very important to the team at Birch Run Financial. Alex and Ed are always happy to have a conversation with you, whether you're a client or not.

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Any opinions are those of Ed Lambert Alex Cabot, financial advisors, RJFS, and Jon Gay, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.

Risk Considerations:
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact our office.
Bonds are subject to risk factors including:
Default Risk - the risk that the issuer of the bond might default on its obligation
Rating Downgrade - the risk that a rating agency lowers a debt issuer's bond rating
Reinvestment Risk - the risk that a bond might mature when interest rates fall, forcing the investor to accept lower rates of interest (this includes the risk of early redemption when a company calls its bonds before maturity)
Interest Rate Risk - this is the risk that bond prices tend to fall as interest rates rise.
Liquidity Risk - the risk that a creditor may not be able to liquidate the bond before maturity.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190.

Any rating is not intended to be an endorsement, or any way indicative of the advisors' abilities to provide investment advice or management. This podcast is intended for informational purposes only.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users or members.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Recently, Congress passed the "SECURE 2.0" Act, building on the first SECURE Act it had passed previously.  Today, Alex Cabot will break down what these new changes mean for your retirement, and Ed Lambert will explain why the cavalry is not coming - and the bulk of the responsibility for retirement planning falls to individual investors.

SECURE 2.0 will do the following:

• Raise the RMD age to 73, and will raise it again to 75 in 2033.
• Cut the Penalty for Missing an RMD from 50% to 25%
• Exempt Roth accounts in employer retirement plans from RMD requirements
• Raise limits on "catch up" retirement contributions
• Allow employer match contributions to go into a Roth account
• Provide more flexibility with Qualified Charitable Distributions (QCD's)
• Make changes to rules around Qualified Longevity Annuity Contracts, or QLACs

Younger listeners who aren't as close to retirement will want to take note of the following:

• Automatic enrollment and plan portability
• An emergency savings plan that is Roth eligible will be available  in defined contribution retirement plans, in 2024
• Also starting in 2024, employers will be able to "match" student loan payments of employees
• 529 plans, after 15 years, can be rolled into an IRA for the beneficiary

What does Ed mean when he says "The Cavalry isn't coming?"   While these new rules are designed to help Americans save for retirement (we've got some scary numbers about how much help we need ), this won't fix everything.   SECURE 2.0 won't automatically provide enough of a nest egg for investors to live off of when they're done working.   The keys to a successful retirement haven't changed.

Pensions are largely gone from employee benefit plans, and 46% of workers don't even have a defined contribution plan.  And what about social security? In roughly 10 years, payroll taxes will only cover 75% of the government's obligations.  That could mean higher payroll taxes, cuts to social security  benefits, or both.  

Start saving early - compound interest is a powerful tool.   And if you want to work with a professional, Alex and Ed, along with their team at Birch Run Financial, are here to help.   They are always happy to have an initial conversation free of charge.

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Sources for information in today's show: 

Pensions are largely gone from employee benefit plans, and 46%[1] of workers don't even have a defined contribution plan.  And what about social security? In roughly 10 years, payroll taxes will only cover 75%[2] of the government's obligations.  That could mean higher payroll taxes, cuts to social security benefits, or both.  

[1] Source: Bureau of Labor Statistics

[2] Source: Social Security Administration

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Any opinions are those of Ed Lambert Alex Cabot, financial advisors, RJFS, and Jon Gay, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.

Risk Considerations:
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact our office.
Bonds are subject to risk factors including:
Default Risk - the risk that the issuer of the bond might default on its obligation
Rating Downgrade - the risk that a rating agency lowers a debt issuer's bond rating
Reinvestment Risk - the risk that a bond might mature when interest rates fall, forcing the investor to accept lower rates of interest (this includes the risk of early redemption when a company calls its bonds before maturity)
Interest Rate Risk - this is the risk that bond prices tend to fall as interest rates rise.
Liquidity Risk - the risk that a creditor may not be able to liquidate the bond before maturity.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190.

Any rating is not intended to be an endorsement, or any way indicative of the advisors' abilities to provide investment advice or management. This podcast is intended for informational purposes only.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users or members.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

What can we expect from the financial markets in 2023?  Obviously 2022 was not a great year for investors. Today, Alex gives us a recap of last year, and Ed explains why the team at Birch Run Financial is optimistic heading in to the new year.

Alex recaps many of the difference indices' performance in 2022, including the S&P 500, the Bloomberg US Aggregate Bond index, and more - courtesy of FactSet.

Yes, the financial media are right when they talk about 2022 being the worst year since the 2008-2009 financial crisis.  But remember, the job of the financial media is to keep us engaged.  Alex digs a little deeper to find we are not where we were 15 years ago.  In fact, the three year period from 2020-2022 looks much better than a similar period during the financial crisis.

Ed is here to look forward to 2023.  And while of course nobody can predict the market, we could be seeing some things to cause optimism.  Bond yields are reasonable, and as clients approach retirement, bonds are often a bigger part of their overall investment strategy.   Also, Price to Earnings, or P/E ratios, are looking better.  Ed explains what these numbers represent, and why this is a good thing.

We also talk about the dreaded "R word" - recession.  How likely are we to see one in 2023?  Well, depends on who you ask. But it's important to remember that recessions are part of the normal economic cycle, and a good financial plan accounts for them to happen.

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Any opinions are those of Ed Lambert Alex Cabot, financial advisors, RJFS, and Jon Gay, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.

Risk Considerations:
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact our office.
Bonds are subject to risk factors including:
Default Risk - the risk that the issuer of the bond might default on its obligation
Rating Downgrade - the risk that a rating agency lowers a debt issuer's bond rating
Reinvestment Risk - the risk that a bond might mature when interest rates fall, forcing the investor to accept lower rates of interest (this includes the risk of early redemption when a company calls its bonds before maturity)
Interest Rate Risk - this is the risk that bond prices tend to fall as interest rates rise.
Liquidity Risk - the risk that a creditor may not be able to liquidate the bond before maturity.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190.

Any rating is not intended to be an endorsement, or any way indicative of the advisors' abilities to provide investment advice or management. This podcast is intended for informational purposes only.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users or members.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

It's been almost a decade and a half since we've seen a market downturn like we have in 2022.  And while you may not be happy when you look at your investments, our current environment may provide some opportunities that investors haven't seen in some time.   Today, Ed Lambert and Alex Cabot of Birch Run Financial explain.

First, Ed tackles Roth Conversions.   On a traditional IRA, you pay the taxes on the way out.  On a Roth, you pay them on the way in.  This is also true at the time of a conversion - that's when you pay the taxes.  And while every individual's situation is different, reasons to do a Roth conversion could include people who are young, people with lower incomes, and in 2022's case, when the value of your investments are down.   Ed explains all of this with examples, and also tells us why it's a good idea to have the money to cover the taxes come from elsewhere.

Next, Alex talks about tax loss harvesting.  Again, this is a complex strategy, and you should always consult with a professional before executing it.  Essentially, if you want to sell securities at a loss, you can use those losses to offset any capital gains you have - for tax purposes.   There are many caveats here, too, though.  Alex cautions us not to prioritize tax strategy above overall investment strategy.  And there are other factors to consider, like the IRS Wash Sale Rule.  He shares one particular horror story involving this strategy.

As the year winds down and you consider your financial future, Alex, Ed, and the team at Birch Run Financial are always happy to have a complimentary conversation with you.

You can always email them at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Any opinions are those of Ed Lambert Alex Cabot, financial advisors, RJFS, and Jon Gay, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.

Risk Considerations:
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact our office.
Bonds are subject to risk factors including:
Default Risk - the risk that the issuer of the bond might default on its obligation
Rating Downgrade - the risk that a rating agency lowers a debt issuer's bond rating
Reinvestment Risk - the risk that a bond might mature when interest rates fall, forcing the investor to accept lower rates of interest (this includes the risk of early redemption when a company calls its bonds before maturity)
Interest Rate Risk - this is the risk that bond prices tend to fall as interest rates rise.
Liquidity Risk - the risk that a creditor may not be able to liquidate the bond before maturity.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190.

Any rating is not intended to be an endorsement, or any way indicative of the advisors' abilities to provide investment advice or management. This podcast is intended for informational purposes only.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users or members.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

With the mid-term elections one week away, many of Alex and Ed's clients and podcast listeners are wondering how the markets will be affected by the results on November 8th.

Alex did some digging into this, looking at the every President since Kennedy, comparing market returns of the first two years of their term to the total length of the term.   We start the podcast by digging in to those numbers, in search of some historical data.  The bottom line is that the numbers do not provide us with a tradeable strategy.  And the same is true with divided government  - either when Congress is split, or when it's controlled by one party with the other party occupying the White House.   Divided government may show slightly better returns.  However, stepping out of the market during times of unified government could keep you on the sidelines, missing out on market gains.

In the second half of today's episode, Ed looks to the future, and what market analysts are saying about the 2022 election.  Most are predicting divided government over Biden's next two years, with the Republicans likely to take the House, and Senate being a virtual tossup.    With divided government, any major legislation is unlikely to pass.   And even if the Democrats control the White House, Senate, and House, fears of inflation on both sides of the aisle may make major bills unlikely to pass.   Many bills are passed with the spending up front and revenue coming in later, which would only add to inflation.

Keep in mind, Jay Powell and the Federal Reserve are not affected by midterm election results.  It will be up to them to act to try and curb inflation while avoiding recession - a tough line to walk as we've discussed in previous episodes.  

The bottom line is this - Americans have a number of factors sending them to the polls on November 8th.  But fear of economic chaos should not be one of them.

Have questions about your financial future?  Alex and Ed are always happy to have a conversation, whether you're a client or not.  

You can always email them at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Any opinions are those of Ed Lambert Alex Cabot, financial advisors, RJFS, and Jon Gay, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.

Risk Considerations:
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact our office.
Bonds are subject to risk factors including:
Default Risk - the risk that the issuer of the bond might default on its obligation
Rating Downgrade - the risk that a rating agency lowers a debt issuer's bond rating
Reinvestment Risk - the risk that a bond might mature when interest rates fall, forcing the investor to accept lower rates of interest (this includes the risk of early redemption when a company calls its bonds before maturity)
Interest Rate Risk - this is the risk that bond prices tend to fall as interest rates rise.
Liquidity Risk - the risk that a creditor may not be able to liquidate the bond before maturity.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190.

Any rating is not intended to be an endorsement, or any way indicative of the advisors' abilities to provide investment advice or management. This podcast is intended for informational purposes only.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users or members.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Investors often get caught up in the idea of "average returns."  Today, Alex Cabot and Ed Lambert of Birch Run Financial explain why that mindset can be dangerous.  Average returns can be looked at over a longer period of time,  but very few years are even close to "average."

First, Ed explains the concept of standard deviation - and the expectation that 66% of years can be expected to be within one standard deviation.  Here's an example:

A portfolio's average annual rate of return is 6%, with a standard deviation of 10% in either direction.

That means, in a 30 year period, the return will be between -4% and +16% in 20 of those years.

However, that means in the remaining 10 years, you'll see returns less than -4% or more than +16%.  Understanding the math and knowing that these wild swings can happen in individual years can prevent making rash buying or selling decisions based on market conditions.  This is explained in Alex an Ed's book, Mastering the Money Mind (link here.)

In the second part of our episode, Alex breaks down the historical numbers that reflect this idea.  Since 1980, the S&P 500 has achieved an annualized price return (not including dividends) of 9.4% per year.

How many times since 1980 has been within even one percent of that average (8.4%-10.4%)?  Just twice.

What about within two percent? Just three times.

Ten percent? The S&P was within 10% of it's average only 18 times since 1980.   That means it returned less than -0.6% or more than +20.4% over twenty times in the last 4 decades!   So while an average is helpful to look at in the long term, we simply can't chase it on a year to year basis.

Investors often get hung up in what they are invested in, as opposed to why they are investing - which is to grow their money over a long time period.   Alex, Ed, and Jag conclude by talking about "zooming out" on the graph to see long term trends.  And Alex explains how to do this to get an accurate representation of historical data.

Finally, Alex and Jag mention their Moms - and how supportive they've been.  You'll hear how that ties in to our conversation.

Have questions about your financial future?  Alex and Ed are always happy to have a conversation, whether you're a client or not.  

You can always email them at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Any opinions are those of Ed Lambert Alex Cabot, financial advisors, RJFS, and Jon Gay, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.

Risk Considerations:
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact our office.
Bonds are subject to risk factors including:
Default Risk - the risk that the issuer of the bond might default on its obligation
Rating Downgrade - the risk that a rating agency lowers a debt issuer's bond rating
Reinvestment Risk - the risk that a bond might mature when interest rates fall, forcing the investor to accept lower rates of interest (this includes the risk of early redemption when a company calls its bonds before maturity)
Interest Rate Risk - this is the risk that bond prices tend to fall as interest rates rise.
Liquidity Risk - the risk that a creditor may not be able to liquidate the bond before maturity.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190.

Any rating is not intended to be an endorsement, or any way indicative of the advisors' abilities to provide investment advice or management. This podcast is intended for informational purposes only.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users or members.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Investment Time Horizons are a concept that Alex Cabot and Ed Lambert feel is often misunderstood by investors. 

Alex starts with the two main factors we need to consider: how long until you need the money and how long you will draw on it. This will affect how you invest, even if the spending goal is the same distance away.

Next, Ed explains why the duration of the distributions is so vitally important.  This relates back to the word of the year so far in 2022 - inflation.   It will cost more to buy the same goods and services in the future as it does today.    We walk through some real world numbers to illustrate this point.

Today's key takeaway is that both time horizons - how long you save and how long you withdraw - are equally as important.  And being too aggressive - or too conservative - can be very costly mistakes.

Have questions about your financial future?  Alex and Ed are always happy to have a conversation, whether you're a client or not.  

You can always email them at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://birchrunfinancial.com/

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Any opinions are those of Ed Lambert Alex Cabot, financial advisors, RJFS, and Jon Gay, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.

Risk Considerations:
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact our office.
Bonds are subject to risk factors including:
Default Risk - the risk that the issuer of the bond might default on its obligation
Rating Downgrade - the risk that a rating agency lowers a debt issuer's bond rating
Reinvestment Risk - the risk that a bond might mature when interest rates fall, forcing the investor to accept lower rates of interest (this includes the risk of early redemption when a company calls its bonds before maturity)
Interest Rate Risk - this is the risk that bond prices tend to fall as interest rates rise.
Liquidity Risk - the risk that a creditor may not be able to liquidate the bond before maturity.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190.

Any rating is not intended to be an endorsement, or any way indicative of the advisors' abilities to provide investment advice or management. This podcast is intended for informational purposes only.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users or members.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Where do the financial markets sit as we've hit the halfway point of 2022? Ed Lambert and Alex Cabot are here to break it all down, in terms of what it means for you as an investor.

Obviously, the big word of the year is Inflation.  Ed explains how bad it is.  Also, what's driving inflation? Is it COVID stimulus money, the war in Ukraine, or China's current COVID lockdowns?  Well, it's all three.  Ed talks about how the FED is trying to combat inflation with rising interest rates, and the fine line they have to walk between curbing inflation and not causing a recession. 

Alex takes a deeper dive on asset classes.  How have stocks, bonds, precious metals, and cash performed in 2022? And what are some sources of optimism as we approach the second half of the year?  And what does airplane turbulence have to do with all of this?

Have questions about your financial future?  Alex and Ed are always happy to have a conversation, whether you're a client or not.  

You can always email them at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://birchrunfinancial.com/

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Any opinions are those of Ed Lambert Alex Cabot, financial advisors, RJFS, and Jon Gay, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.

Risk Considerations:
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact our office.
Bonds are subject to risk factors including:
Default Risk - the risk that the issuer of the bond might default on its obligation
Rating Downgrade - the risk that a rating agency lowers a debt issuer's bond rating
Reinvestment Risk - the risk that a bond might mature when interest rates fall, forcing the investor to accept lower rates of interest (this includes the risk of early redemption when a company calls its bonds before maturity)
Interest Rate Risk - this is the risk that bond prices tend to fall as interest rates rise.
Liquidity Risk - the risk that a creditor may not be able to liquidate the bond before maturity.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190.

Any rating is not intended to be an endorsement, or any way indicative of the advisors' abilities to provide investment advice or management. This podcast is intended for informational purposes only.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users or members.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Alex Cabot and Ed Lambert of Birch Run Financial have been working in this industry for over 20 years, and they've seen a lot of interesting financial products.  Today, they take a look back at some of these investments and why they didn't work out.  The list includes:

Negative Amortization Mortgages

Financial Engineering

High Yield Debt/Bond Products

Illiquid and Opaque Strategies

Fixed Index Annuities

Cryptocurrency

Viatical Settlements

And finally, totally fraudulent products and strategies

In the end, it all boils down to common sense.  If an investment strategy appears too good to be true, promising unrealistic returns, that should give you pause.  That's why Alex and Ed believe in a long term, diversified investment strategy.  If you'd like to have a free, no-obligation conversation with them and the team at Birch Run Financial, reach out. 

Birch Run Website: www.birchrunfinancial.com

Birch Run Financial email: [email protected]

Birch Run Financial Phone Number: (484) 395-2190

Alex and Ed have a new book out, Mastering the Money Mind: A New Way of Thinking About Personal Finance.  You can contact them below for a copy or find it on Amazon here: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal-ebook/dp/B09YB9J315

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Any opinions are those of Ed Lambert Alex Cabot, financial advisors, RJFS, and Jon Gay, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.

Risk Considerations:
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact our office.
Bonds are subject to risk factors including:
Default Risk - the risk that the issuer of the bond might default on its obligation
Rating Downgrade - the risk that a rating agency lowers a debt issuer's bond rating
Reinvestment Risk - the risk that a bond might mature when interest rates fall, forcing the investor to accept lower rates of interest (this includes the risk of early redemption when a company calls its bonds before maturity)
Interest Rate Risk - this is the risk that bond prices tend to fall as interest rates rise.
Liquidity Risk - the risk that a creditor may not be able to liquidate the bond before maturity.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190.

Any rating is not intended to be an endorsement, or any way indicative of the advisors' abilities to provide investment advice or management. This podcast is intended for informational purposes only.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users or members.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Often, Alex Cabot and Ed Lambert at Birch Run Financial are asked about how the political environment can affect investments.  Today, we take a deep, non-partisan dive into that very question.

First, Ed takes the 30,000 view.  On average, it doesn't matter which party is in charge in Washington - Democrat or Republican.  There is a small uptick in returns when the government is divided, as opposed to one party controlling Congress and the White House. 

What does come into play though, is confirmation bias.   Individual investors often minimize downturns when their party is in power, yet blame the opposite party when markets are down on their watch.  Bottom line, the market has been on the pace of a 12-4 NFL team.  (And yes, this point led to some heated Patriots-Eagles trash talk.)

Next, Alex breaks down the specific data when it comes to political parties. We look at every Administration since 1981, as well as rolling 48 and 96 month averages.   This information proves that, once again, it's not timing the market, but rather time in the market that counts.

Finally, with all the talk about media bias and political bias,  Alex provides some historical context.  Our current climate is not without precedent.

Alex and Ed have a new book out, Mastering the Money Mind: A New Way of Thinking About Personal Finance.  You can contact them below for a copy or find it on Amazon here: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal-ebook/dp/B09YB9J315

Birch Run Website: www.birchrunfinancial.com

Birch Run Financial email: [email protected]

Birch Run Financial Phone Number: (484) 395-2190

You can always email Alex and Ed at [email protected] or give them a call at 484-395-2190.

Or visit them on the web at https://www.birchrunfinancial.com/

Alex and Ed's Book: Mastering The Money Mind: https://www.amazon.com/Mastering-Money-Mind-Thinking-Personal/dp/1544530536

Any opinions are those of Ed Lambert Alex Cabot, financial advisors, RJFS, and Jon Gay, and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The examples throughout this material are for illustrative purposes only. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Diversification and asset allocation do not ensure a profit or protect against a loss. Past performance is not indicative of future returns. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise. Investing in small cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.

Risk Considerations:
There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences. To learn more about these risks and the suitability of these bonds for you, please contact our office.
Bonds are subject to risk factors including:
Default Risk - the risk that the issuer of the bond might default on its obligation
Rating Downgrade - the risk that a rating agency lowers a debt issuer's bond rating
Reinvestment Risk - the risk that a bond might mature when interest rates fall, forcing the investor to accept lower rates of interest (this includes the risk of early redemption when a company calls its bonds before maturity)
Interest Rate Risk - this is the risk that bond prices tend to fall as interest rates rise.
Liquidity Risk - the risk that a creditor may not be able to liquidate the bond before maturity.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc. Birch Run Financial is not a registered broker/dealer and is independent of Raymond James Financial Services. Birch Run Financial is located at 595 E Swedesford Rd, Ste 360, Wayne PA 19087 and can be reached at 484-395-2190.

Any rating is not intended to be an endorsement, or any way indicative of the advisors' abilities to provide investment advice or management. This podcast is intended for informational purposes only.

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users or members.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.