The theme this week on the One Minute Retirement Tip podcast is Get These 4 Things Right For A Successful Retirement. 

If you’re searching for how to set yourself up for a successful retirement, it’s important to understand and give pride of place to these 4 factors: longevity, lifestyle, liquidity, and legacy. This concept, known as the 4 L’s of retirement, was developed by the well-known industry author and retirement researcher, Dr. Wade Pfau. 

The purpose of the 4 L’s is to help you understand how these interrelated factors influence your decisions about how you spend your money, your time, and how you invest your money in retirement.

My hope is that you’ll come away from this week’s podcast episodes better able to think about your own retirement goals as they relate to these 4 things you’ll want to pay attention to as you approach and transition into retirement. 

So I’ll devote each day this week to breaking down one of these retirement success factors, and at the end of the week, I’ll share with you how you can bring it all together with a free worksheet from Wade Pfau and his team. 

That’s it for today. But before you go, I want to share with you a weekly theme I have planned and I need your help. It’s “ask me anything” week. Submit your question about retirement to me, and if I pick your question, I’ll read it and answer it on the podcast.                                                             

• What’s weighing most heavily on your mind as you approach retirement? 
• What obstacles are keeping you from where you want to be?
• Even if you just want my crystal ball predictions on inflation, the stock market, or interest rates, I’ll put my magic merlin hat on and answer your burning questions 

Just send me an email: [email protected]. That’s [email protected].

Thanks for listening! My name is Ashley Micciche...and this is the One Minute Retirement Tip. 

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>>> Visit the podcast page: https://truenorthra.com/podcast/ 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, retirement income planning, retirement income sources, retirement income, retirement income withdrawal, retirement spending strategies

It’s Sunday, which means...It’s recap time! 

This week on the One Minute Retirement Tip podcast, we explored the question: Are Value Stocks Coming Back In 2021?

In case you missed it, here’s what we covered this week: 

• What is a value stock? 
• Growth vs. value stocks - over the last 10 years, we’ve seen the widest gap on record in the outperformance of growth compared to value stocks.
•  Then we looked at why value stocks may be making a comeback now
• And why you may want to rotate out of your growth stocks and into more value stocks, especially if you’re near retirement and worried about inflation 
• And yesterday, I shared with you my recommendation for value stocks and their place in your portfolio. 

Hopefully after listening to the One Minute Retirement Tip this week, you aren’t blindly drinking the big tech stock kool-aid, like so many investors are today. Who wouldn’t want to jump on annualized returns of 14% over the last 10 years, right? Well, maybe not you if the favor and fundamentals are shifting back to value stocks.

Many high-quality value stocks are undervalued even as the stock market hovers around it’s all time highs. 

Tomorrow we’re starting a brand new theme: The 4 L’s of Retirement: Longevity, lifestyle, liquidity, legacy. I’ll talk about why balancing these 4 factors will help you make smart decisions that are consistent with your goals and values in order to bring more satisfaction to your retirement years. 

And if you haven’t checked out my YouTube channel - True North Retirement - head over to YouTube and subscribe. I post a new video on Sundays, and each video is aimed at helping you live a fulfilled and financially secure retirement. Last month, the channel hit 500 subscribers, which is still teeny tiny, but very exciting...so if you’re enjoying the podcast, I know you’ll love the YouTube videos as well.

Thank you so much for listening this week! My name is Ashley Micciche and I hope you have a blessed Sunday.

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>>> Check out our blog: https://truenorthretirementadvisors.com/blog/

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week on the One Minute Retirement Tip podcast, I’m exploring the question: Are Value Stocks Coming Back In 2021?

Today, I’m talking about why I like value stocks more than growth stocks right now and in the years to come. 

Value stocks have been unloved and have underperformed in this new big tech age that has emerged over the last decade. But one important characteristic of many value stocks is that they pay dividends. Many growth stocks don’t. Their businesses are still new and they use all of their profits and cash to reinvest in the business and help to fuel future growth rather than returning that growth to shareholders in the form of dividends. 

Value stocks are different, because they tend to be more established and mature businesses. No longer in their explosive growth phase, they have elected to return cash to shareholders in the form of dividends. This is a good thing. If a company can balance reinvesting in the business with sending profits to shareholders through dividends, it’s a win-win, because you’re likely to see the stock price increase over time as the business grows, all the while you’re getting paid every year from dividends. 

High-quality dividend paying value stocks have chronically underperformed over the last 10 years, it’s quite possibly the most compelling time to be investing in value stocks, and capture the consistent and growing dividend income stream that these stocks provide.

I have always been a fan of high-quality dividend paying stocks as the foundation for any investor’s portfolio. And with everything but high-flying big tech being largely ignored and left behind over the last 10 years, the valuations of these companies are priced right. 

Today you can buy quality stocks with all of the important fundamental elements: 

• Low debt
• Strong cash flow 
• Consistent profitability
• Dominant businesses in their industry
• Well-managed
• Pricing power to increase prices if inflation hits without losing customers

It’s a powerful recipe for building wealth by owning great businesses, and many of these companies are trading at a discount to their intrinsic value today. 

Even with the stock market at new all-time highs, I truly believe now is the time to be backing up the truck and loading up with high quality dividend paying value stocks. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week on the One Minute Retirement Tip podcast, I’m exploring the question: Are Value Stocks Coming Back In 2021?

Today, I’m talking about why value stocks are especially attractive for those of you who are close to retirement. If you’re needing to turn on an income stream from your portfolio and you’re worried about all the inflation headlines plastered all over the news, value stocks are the way to go. 

If we have inflation and higher interest rates, I would expect value companies to do very well in that environment. Most high-quality value stocks are characterized by the following: 

• Low debt
• Strong cash flow 
• Consistent profitability
• Dominant businesses in their industry
• Well-managed
• Pricing power to increase prices if inflation hits without losing customers

When a business has low debt and pricing power to increase prices without hurting their bottom line, like many value stocks have, the company can weather the inflation impact. When they have low debt, their interest and debt service costs won’t skyrocket and endanger the business when rates start increasing. 

As a result, high-quality value stocks will be even more attractive to invest in if inflation and higher interest rates kick in, which is a trend that appears to already be underway. 

The bottom line is that if you’re close to retirement and worried about inflation, you’re definitely going to want to own a substantial part of your retirement portfolio in high-quality value stocks. 

I’ll talk more tomorrow about the dividend component of value stocks that make them especially attractive investments for retirees. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week on the One Minute Retirement Tip podcast, I’m exploring the question: Are Value Stocks Coming Back In 2021?

Today, I’m stating my case for value stocks. The S&P 500 is nearing 4,200 as I write this, and tech companies now make up 27% of the S&P 500 index. When just a handful of companies make up most of the entire tech industry in terms of size and influence over the returns of that sector, your portfolio is heavily influenced by the returns of just a handful of big tech companies, because tech now represents a disproportionate % of the total stock market. 

If you’ve been an investor of the S&P 500 index or had a lot of your portfolio in large cap growth and tech, you’ve been a happy investor for the last 10 years. 

But I think that may soon begin to change. Here’s the thing. The returns in growth stocks have been so steller, many of them are now at or above, many even far above their intrinsic value, and value stocks have started to become more loved as their recent outperformance compared to growth stocks has demonstrated. 

Researchers over at Vanguard recently published a paper on this topic. They think that value stocks will outperform growth stocks by 5-7% per year in the coming decade. And much of that outperformance they see coming in the next 3-5 years, with value outperforming growth by 9-13% per year.

Why the reversal? Part of the reason is what I talked about already this week - the reversion to the mean or a return to normalcy in the balance in returns between growth and value stocks over time. 

The thesis for value stocks is typically something like this: 

Buy quality businesses, with low debt, who are dominant in their industry. If that industry has barriers to entry and the business has pricing power and the flexibility to raise prices, all the better. Value companies tend to be consistently profitable and well-managed. Once you can check all those boxes  AND the stock is trading at a discount to its intrinsic value, then you have a winning formula for a quality value stock. 

Stock market returns haven’t rewarded these fundamental factors that drive business and stock price value. The only thing investors have cared about is the future growth potential of the business, without discerning all of the factors that are important to consider when investing.

And that’s why I think Vanguard researchers may be right in theorizing that value will outperform growth over the coming decade. Value stocks have been largely ignored, all the while, they’ve been strengthening their companies, without being rewarded in the stock price. 

That’s why I’m optimistic and excited for value stock investing to make a comeback. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week on the One Minute Retirement Tip podcast, I’m exploring the question: Are Value Stocks Coming Back In 2021?

Today, I’m talking about how growth stocks have absolutely pummelled value stocks over the last decade, and why you should pay attention to that. 

About 7 years ago,  my dad started assistant coaching girls varsity basketball at this new high school. He has been coaching basketball for 40 years and he and the head coach were both good, experienced coaches. The problem was that the high school was pretty small...so small in fact that they had trouble just getting enough girls for a full varsity roster. If you had a pulse you were heavily recruited. I’m pretty sure their starting point guard was an 8th grader.  In their first few seasons they lost every game. My dad really wanted me to come see one of their games, so I went one night and painfully sat through this other team just wallop these girls. At halftime the score was 50 to 5. I’m sure you’ve sat through youth sports games like that before. It’s hard to watch. 

Well the same has been true for value stocks compared to growth stocks over the last decade. The difference is performance of growth stocks vs. value stocks has been astounding...according to Morningstar, it’s the widest performance gap on record. Large growth averaged 14.66% returns per year in the 10 years through the end of 2020. Over that same time period, growth stocks averaged a 9.4% annual return. 

If you invested $100,000 into large cap growth stocks in those 10 years, it would have grown to $392,000. By investing in value stocks, you would have about $246,000. Nearly $150,000 less over the last 10 years. 

There are quite a few reasons why growth stocks have outperformed value stocks over the last 10 years, but what happened last year during Covid was the most telling. Believe it or not, just a handful of the biggest tech companies are responsible for the vast majority of that outperformance in growth stocks over value. Think of it as a winner take all situation where just a few of the biggest tech giants - Apple, Google, Microsoft, Facebook, Amazon, Netflix - were responsible for most of the outperformance. 

Most people believe that tech will still be the place to be for the next 10 years, but that kind of thinking is dangerous. There is always a reversion to the mean..in other words, tech will not outperform forever. Value will make a comeback at some point. It’s inevitable. The market hasn’t cared about quality and value for the last 10 years. I don’t mean to say that the big tech names aren’t quality businesses. They are. But the market will one day start appreciating attractively valued, consistently profitable, strong businesses with low debt and rewarding these companies with stronger share price growth that is more in line with the intrinsic value of the business. 

Tomorrow I’ll talk about why I think that time is coming sooner rather than later. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

This week on the One Minute Retirement Tip podcast, I’m exploring the question: Are Value Stocks Coming Back In 2021?

Today, I’m laying the groundwork for this week’s value stock discussion by making sure that you understand what a value stock is and how it’s different from a growth stock. 

Value stocks are those companies where the intrinsic value is more than where the stock is trading for today. For example, when you watch all those flipping house shows on TV, the buyer is looking to find a house that’s selling for less than what it’s actually worth. The difference is with stocks, you usually can’t flip your value stock right away for a profit, but you don’t have to demo the kitchen either.   

Intrinsic value is a measure of what an asset or a business is worth. When figuring out intrinsic value, it’s usually done by an objective calculation or financial modeling, and it’s not based on the current price of the stock.

A stock is a value stock then if it’s currently trading for $100 a share, but it’s intrinsic value is much higher, say $120 or $150 a share. Warren Buffett is the world’s most famous value investor. He only buys businesses that he thinks are worth much more than their current selling price. And this isn’t just a hunch or a wild guess. His instincts are certainly important, otherwise everyone would be able to replicate his methods and there would be many more billionaire investors. But it’s his disciplined approach in investing in quality businesses that are trading at attractive valuations relative to their real, intrinsic worth that has made Warren Buffett perennially one of the wealthiest people in the world. 

When you understand value, it’s a bit easier to understand the other side of the coin - growth. Growth companies may be trading at or more than their intrinsic value. But you’re anticipating that the company will continue to grow revenues, cash flow, and future profits, so even though it’s not a bargain price business right now, by investing in it, you’re counting on the future growth of the business and the future potential to make money in the business.

Growth stocks have been the place to for the last decade, and I’ll dive more into that tomorrow. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

“Technology shares led the broader market lower on Monday as investors dumped high-flying Big Tech stocks, pushing the Dow Jones Industrial Average and the S&P 500 off their record highs.”

That was the headline I came across the day I sat down to write my talking points for this week’s podcast episodes. 

The article goes on to say: “Investors rotated out of growth names, resuming a trend seen earlier this year amid rising fears of inflation and higher interest rates. Facebook dropped more than 4%, while Amazon and Netflix both dropped over 3%. Alphabet [aka google] dipped more than 2% after a downgrade by Citigroup.”

I’ve been telling clients for years that I think growth stocks are too expensive and overdue for a pullback. Never was I more wrong than in 2020, when the pandemic fueled further growth in the high-flying big tech names, as you and I stayed home and relied on Netflix, GrubHub, and Zoom and technology became essential to daily living.

Our stuck-at-home lifestyles fueled eye-popping growth in the biggest tech stocks in 2020. Apple and Amazon stocks were both up around 80% last year. Netflix was up 70%. And the tech-heavy Nasdaq, which was up ONLY 43% in 2020.

But as we’ve seen over and over again, it’s not unusual for the darlings of Wall Street to fall, even when it seems they’ll keep going up in value forever. 

Will 2021 be the year I am finally right after being wrong about growth stocks for the last 5+ years? Will value stocks finally catch up to their growth stock cousins and start performing more in line with their historical norms? 

We’ll explore these questions and more in this week’s theme: Are Value Stocks Coming Back In 2021?

That’s it for today. But before you go, I have a special treat for you. There’s still one more day to sign up for our virtual education event via Zoom - tomorrow night, Tuesday May 25th at 6:30pm (PST).

This event, “Investing in Uncertain Times”, features guest speaker Chad Morganlander, senior portfolio manager and co-founder of Washington Crossing Advisors. Chad is a regular on various media outlets, including CNBC, Bloomberg, Fox News, & The Wall Street Journal. 

Investing in uncertain times is certainly a timely topic right now! You’ll hear Chad’s perspective on investing and what he’s learned over the years managing nearly $9 billion in assets. 

The event is free and you can register by going to truenorthra.com/tickets. 

Thanks for listening! My name is Ashley Micciche...and this is the One Minute Retirement Tip. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

It’s Sunday, which means...It’s recap time! 

This week on the One Minute Retirement Tip podcast, we performed a financial checkup.We looked at your progress toward your retirement goals, your budget, spending, your will and estate plan, your debt and your cash. These are the key areas to assess, and I recommend doing a review of everything once a year. Take inventory and do your best to assess your current financial situation objectively.

Hopefully after listening to the One Minute Retirement Tip this week, you know what areas to focus on and what questions to ask yourself to keep you on track or get back on track so you can make progress toward your goals and keep your eyes on the prize. 

Tomorrow we’re starting a brand new theme: Is value better than growth in 2021? Growth and big tech stocks have outperformed value stocks for years! If you’ve been invested in the big growth companies, especially big tech, you’ve been loving your returns. But the tide may be turning, and no one is talking about it. So next week, I’ll talk about why I think the recent outperformance in value stocks is worth paying attention to and may continue through 2021 and beyond. 

And if you haven’t checked out my YouTube channel - True North Retirement - head over to YouTube and subscribe. I post a new video on Sundays, and each video is aimed at helping you live a fulfilled and financially secure retirement. Last months, the channel hit 500 subscribers, which is still teeny tiny, but very exciting...so if you’re enjoying the podcast, I know you’ll love the YouTube videos as well.

Thank you so much for listening this week! My name is Ashley Micciche and I hope you have a blessed Sunday.

----------

>>> Subscribe on iTunes: https://apple.co/2DI2LSP

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>>> Check out our blog: https://truenorthretirementadvisors.com/blog/

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

One of my favorite books growing up was goldilocks and the three bears. I still have a goldilocks book that my mom held on to and gave back to me when I have kids. It sits on the bookshelf in my daughter’s room, and it even still has remnants of an egg salad sandwich (another childhood favorite of mine), circa 1990. 

If you recall from the goldilocks story, everything she tried after she burgled the poor bears’ home was either too big, too small, too hot, too cold. Except for baby bear’s things, which were just right. 

The same is true for your cash and emergency savings. I often see people with either way too much cash earning pennies of interest in the bank, or way too little in cash, and they’re among the 40% of Americans who cannot cover a $400 emergency without putting it on a high interest rate credit card. 

This week on the podcast, we’re doing an annual financial physical. Today, I’m talking about reviewing your cash and emergency savings. And frankly, I wish I had some more groundbreaking advice here. I don’t. The classic advise you hear from almost all personal finance experts is the same for a reason. It’s because it’s really good advice. 

Hold 3-6 months worth of your income in cash to guard against financial emergencies, and earmark any additional cash you might need to any known upcoming purchases - maybe a daughter’s wedding, or if you’re me, that sweet Honda Odyssey that I needed to buy last summer when baby #3 was on the way. I’m officially very uncool driving around in my minivan, but I really do love it. And when it’s just me and the baby, it’s time for a little Dr. Dre, so I can still live in the delusion that I might still be cool, while driving to pick up my other 2 kids from school. 

I sympathize with violaters of this rule. I like the security of holding cash, so I usually have too much on hand. So you know, do as I say, not as I do with this one. However, I like paying cash for everything, so I tend to hold more to give me the flexibility to do that. 

But holding too much cash is causing you (and me) to lose money. Even with inflation still low, that cash you have sitting in the bank is not earning enough to keep up with inflation and you’re losing money in real terms. 

So make sure you’re not hoarding cash, which is a common temptation I see among people who are closer to retirement and have a good income stream and assets. 

That’s it for today, Thanks for listening! My name is Ashley Micciche and this is the One Minute Retirement Tip.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance