Shotwell Rutter Baer

Join us as we talk with guest Ian Richardson, who is a partner at Richardson and Richardson Consulting and the CEO of Doberman Technologies. We talk about emerging technologies and things to be aware of with worldwide information. Ian has been on our show before talking about cybersecurity. Ian is our first repeat guest and we were excited to talk to him.

In this episode we cover things like:

Check out the last episode with Ian at Cybersecurity: Keeping Your Financial Information Safe. This episode and blog post are full of great information on how to protect your information online including:

We also partnered with Ian for a webinar on Cybersecurity – you can check that out at Cyber Security Presentation from Doberman Technologies.

At Richardson & Richardson, Ian functions as Managing Partner for the firm, running most daily operations, as well as a consultant for clients. He focuses on combining simple, elegant strategic planning with clear, concise communication to help teams achieve alignment around their organization’s vision. Ian also provides coaching and accountability to help those teams execute their plans. The result is business success and organizational transformation.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

It’s hard to believe we are already a quarter of the way through 2022 and what a quarter it has been.

Last week our friends at East Bay Investment Solutions published their investment commentary for the first quarter of 2022. They note that the global economy is being impacted by several items including the continuation of Covid – 19, geopolitical fallout from the Russian invasion of Ukraine, and the Federal Reserve tightening monetary policy to stave off inflation. These issues have made for tough markets, but volatility is normal and should be expected.

Taking a balanced approach, there are optimistic signals and reasons for caution:

The quarter was negative for both stocks and bonds, with commodities and inflation-protected bonds serving as the only bright spots. Time will tell where the markets and the economy head from here as we gain clarity on inflation, the war in Ukraine, the Fed’s policy stance, and Covid.

You can read their full Quarterly Investment Commentary – Q1 2022 here or watch a recording of their presentation below:

https://www.youtube.com/watch?v=wvJXUFPeet8

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

We don’t love the term either, because it is hard to figure out what it means. But we do stand by being fee-only advisors.

Simply put, our clients pay us a fee for financial planning and investment advice. We do not make any commission from the investments that our clients make.

Here is a bit of a longer explanation from our website:

As fee-only financial planners, we always operate as fiduciaries. This means that we are legally obligated to provide advice that is in your best interest. That is, we don’t profit by selling you a particular product or investment. Many people believe that all financial advisors are required to give advice that is in your best interest; unfortunately, that’s not always true if they have something to gain by steering you in one direction or another.  Since commission-based financial planners are paid to sell products, they may choose a product that pays them a higher commission, even if it’s not the best choice for you. As fiduciaries, we don’t get paid that way.

We always have our clients’ best interests in mind since we don’t make any more money by providing certain investment advice.

For more information on our process and philosophy check out our Strategic Reliable Blueprint.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Have you read The Psychology of Money by Morgan Housel?

Join Nick and Dave as they recap a book they both have read and resonated with both of them. The book covers a lot of practical advice when it comes to managing your personal finances. So, it is easy to see why the Kitchen Table Finance Podcast likes it.

Listen as the guys cover some key points of the book and discuss their own philosophies about money management. You can get a copy of the book here.

If you have read this book, let us know what you think!

The Psychology of Money: Timeless lessons on wealth, greed, and happiness

by Morgan Housel

About this book:

Doing well with money isn’t necessarily about what you know. It’s about how you behave. And behavior is hard to teach, even to really smart people.

Money―investing, personal finance, and business decisions―is typically taught as a math-based field, where data and formulas tell us exactly what to do. But in the real world, people don’t make financial decisions on a spreadsheet. They make them at the dinner table, or in a meeting room, where personal history, your own unique view of the world, ego, pride, marketing, and odd incentives are scrambled together.

In The Psychology of Money, award-winning author Morgan Housel shares 19 short stories exploring the strange ways people think about money and teaches you how to make better sense of one of life’s most important topics.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Join Dave and Nick as they review the important things you should consider when reviewing your 2021 Tax Returns. They conveniently break the information down for those who are working and those who are retired. So, this information applies to everyone with a tax return.

As a tip, it might be helpful to have your tax return in front of you as you listen to this episode.

The following charts will help you follow along. While Shotwell Rutter Baer financial planners are not accountants and tax professionals, they can help with questions regarding investing and financial planning.

Call us at 517-321-4832 for financial and retirement investing advice.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Should You Hire a Financial Advisor? YES (maybe)

When? Now (or later)

Join Dave and Nick as they talk about who should hire a financial planner and when.

The need for a financial advisor will vary throughout your life. Financial planners are key when you are at a certain financial place. If you go to an advisor, they may tell you you don’t need one. They might also advise you to take a few steps and then come back to them when you reach certain goals.

Unfortunately, there are also advisors who will take your money, make money off of you, and not really help you. Here is how to figure out if you need a financial advisor.

Here are some things to consider when thinking about hiring a financial advisor.

How complex is your financial situation? Are you getting the answers you need from searching on Google? If you aren’t, you might want to think about talking to a financial advisor.

Do you want regular market updates? Sometimes it can be hard to find the right information in a timely manner. Finacial Advisors study the market and have updated information.

Do you want help with your investments? Investments are a big part of what Financial Advisors manage – do you prefer to have someone help you with this?

Note: We believe that managing investments is not the most valuable thing we do as financial advisors for clients. Behavioral finance strategies overall are the big picture of your finances. 

Does the market make you nervous? Investing is a long game, and jumping in and out of the market is not a good strategy. Neither is waiting and procrastinating about investing.

What are you doing to improve your finances? Is your money making money for you? Are you reaching your goals?

Has something happened that has sped up your reason to focus on your finances? Job change, marriage, divorce, illness, disability, getting ready to retire, having a child, moving, etc.

Do you prefer having someone else think about your money for you? Some of our clients come to us because they don’t want to focus on and manage their money. They would rather spend their time doing other things. Sure, you can research and teach yourself about money management, but is that how you want to spend your time?

You want someone to collaborate with. We also have clients who are really interested in their money and managing it. They are looking for someone to partner with and bounce ideas off. We also do research and investigate for these clients. Sometimes it is nice to have an outside objective voice.

Are you a couple? Often in couples, one person manages the money more closely and is more involved. However, both people should be aware of your financial situation and a financial advisor can be another resource. This is also very important as you age and if either person’s cognitive abilities start to decline.

If you have more than you need. If you have plenty of money and aren’t worried about making more money, paying taxes, or meeting financial goals. You may just need to hire an advisor by the hour from time to time to look over things.

Are you a recent college graduate? It is never too early to start thinking about your finances and planning for your retirement. However, a financial advisor can help you get set up for success as you are paying off student loans and building up your credit. You probably don’t need to hire one on an ongoing basis, though.

Looking to beat the market. If you think a financial advisor can help you make more money on the market – this is probably not the case. They might tell you they can and charge you for it, but that doesn’t mean they have magic powers that can help you any more than you could do on your own. Basically, if you want to make a lot of money on the stock market you have to take big risks. Some people are comfortable with this and some are not.

Still not sure? Send us a message at [email protected] and we’d be happy to answer your questions.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Are you starting a new job? Do you have a 401K to roll over? This is the podcast episode for you.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

As I’m writing this in early March, the stock market, as measured by the Standard and Poor’s 500, is down just shy of 9% for the year. Russian forces are prosecuting an ugly invasion of Ukraine, adding economic uncertainty and more inflationary pressure to the markets. However, downturns caused by geopolitical events like this one are generally short-lived and we’ve enjoyed several years of a strong market.

Today’s headlines indicate that both sides in the conflict are heading to the negotiating table in the next few days, but the situation is very tenuous. At this point, an easy resolution seems a stretch and there is a risk of the conflict continuing or even spreading beyond Ukraine.

The market reflects those concerns and will most likely remain volatile until there is some real progress toward an end and while the true economic impact of this conflict comes into focus. Our partners at East Bay Investment Solutions point out that Russian stocks account for less than 0.5% of most client portfolios. However, it is too early to tell how the economic sanctions the US and Europe are using to punish Russia will play out and affect the broader economy as undoubtedly there will be winners and losers. Furthermore, Russia accounts for a large slice of the world’s energy markets, and disruptions to that supply will likely cause more inflation concerns.

The good news, from a market perspective, is that downturns caused by geopolitical events like this one are generally short-lived. As Vanguard points out in the chart below that looks at the market during several events such as the Cuban Missile Crisis, the Iraq War, and the Soviet invasion of Afghanistan, the average market return over the 6 months after a major event has been + 5% and the average following one-year return has been 9%.

While no two crises are ever the same, the historical record would indicate that making hasty decisions around these events would be folly. And this long–term chart of the S&P 500 reminds us that the market has carried on and continued to rise through countless such disruptions since the 1920s.

Keep in mind that this down period comes on the heels of several years of strong market returns, and that, whatever the headlines, coping with market turbulence is part of investing. We do not recommend changing strategies due to situations like the Russian invasion as the short–term impact is always unknowable ahead of the event, and the situation can change for the better just as quickly.

We did not design any client portfolios believing the markets would always be positive. We’ve written about market volatility (Market Volatility Survival Guide) a lot in the past, and our advice this time is no different: don’t make hasty, emotional decisions in reaction to short–term market moves and headlines but instead focus on the long–term and gear investment decisions to how and when you intend to use your money.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Join Dave and Nick around the Kitchen Table to talk about Inflation.

Inflation hasn’t been a real issue in American lives for about 30 years. But just like everything financial, it is cyclical.

So, what is going on with inflation in 2022?

Find out what types of things are affecting inflation, and what this means for your own financial planning.

Here are the charts references in the episode.

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.

Dave and Nick talk about Shotwell Rutter Baer’s investment philosophy. They also introduce their new partnership with East Bay Investment Solutions.

East Bay is an investment consulting firm providing services such as portfolio oversight, investment due diligence, and wealth management guidance tailored to meet the needs of Shotwell Rutter Baer clients. In addition, East Bay provides model portfolios that subscribe to the investment philosophy shared by Shotwell Rutter Baer that the market is reasonably efficient, that low-cost, time-tested, and liquid investments in a diversified portfolio yield financial success over time.

Link to SRB Investment Philosophy Podcast: https://srbadvisors.com/our-investment-philosophy/

We could neither confirm nor deny the existence of the quote Dave attributed to Jon Bogle. Regardless, we still think it’s essential to have an investment philosophy and stick to it!

Short–term market returns cannot be known or predicted. The markets will fluctuate daily based on the news flow and many unpredictable events. The market’s movements in response to these changes cannot be predicted. In the long run, markets respond to economic growth, and the economy grows as the population grows, as equipment wears out and needs to be replaced,  and as new technologies become available. 

The markets are usually efficient. That is a fancy way of saying that the price of any stock on any given day reflects all the known public information about that stock. The price is the average of everyone’s opinion. Some people think the price should be higher, so they are buyers, and some think the price should be lower, so they are sellers. For this reason, trying to pick individual stocks that are undervalued is a  guessing game. As news comes out, the market digests that new information almost instantly and prices adjust.

Risk and expected return are related. Because the stock market outperforms bonds and cash investments over the long haul, we expect that the more stock investments included in a portfolio the higher its return should be over time. Portfolios with a  lower allocation to the stock market will be less volatile but will also be expected to produce a lower long–term return.

Taking the right type of risk is important. Taking the risk of being in the market drives your long–term expected results.  

Asset Allocation is much more important than Stock Selection. Asset allocation refers to how a portfolio is divided up between stocks and bonds, and how those broad categories are broken down into types of stocks and bonds. Research has shown that  94% of a portfolio’s return comes from this decision 

Brinson, Hood, and Beebower – Financial Analysts Journal – February 1995.

We believe in global diversification in any asset class where the opportunity exists. The financial markets span the globe and are interconnected, and your portfolio should reflect that with broad, global exposure. 

We believe in regular rebalancing but infrequent trading. Rebalancing means returning your portfolio holdings to the target percentages assigned to the model. • Regular rebalancing mitigates portfolio risk and creates a disciplined approach to  

selling assets that have risen beyond their targets and buying those that are down,  compounding gains when those assets come back in favor. 

Portfolio Expenses are also important. Investment returns are only worth what you get to keep. Controlling expenses means more return goes directly to investors.  Because markets are efficient, active mutual fund managers, trying to pick winning stocks that will beat the market, rarely add consistent value when their fees are factored into returns.  

When practical, we will consider investment products that follow Environmental,  Social, and Governance (ESG) considerations. We believe in aligning our values with our investments when doing so can be done effectively and without sacrificing diversification and portfolio performance. 

Taxes Matter. Along with expenses, tax – efficiency makes a difference for non – retirement accounts.  

There are factors that can be identified which can lead to long–term outperformance. Instead of choosing individual stocks, focusing on groups of stocks with specific characteristics can lead to long–term outperformance.  

Managing asset allocations to match the markets can add value if it is done cost-effectively. While managing individual stocks does not necessarily add value to a  portfolio, managing the portfolio’s asset allocation based on macroeconomic trends can add to performance if done cost-effectively. Our models generally keep the risk exposure the same – how much, overall, is invested in stocks versus bonds – but do at times shift between subcategories, such as emphasizing emerging market stocks at certain times, or adding to sectors such as health care or technology.

Complexity Does Not Mean Outperformance: Often simple answers are the best answers. Wall Street brokerage firms make a lot of money convincing investors that there are new strategies, so-called alternative investments, or other complex ways to invest that change the otherwise simple dynamic of investing in stocks for the long run. There is no free lunch in the investment world: if a particular investment plan offers higher returns for less risk, there is a cost somewhere, either in the form of fees and premiums or in lost liquidity, to make those higher returns possible. 

Staying invested over the long haul, in a portfolio that is tax-efficient and cost-effective and takes the appropriate amount of risk for you and your goals is the key to long-term success. 

Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.

Click here to learn about the Strategic Reliable Blueprint, our financial plan process for your future.

Call us at 517-321-4832 for financial and retirement investing advice.