Market Downturn Strategies, Give the Gift of Investing, Join Our 5K on July 13
We’re Securing Your Safety Harness
The Steel Force roller coaster at Dorney Park is an exhilarating ride; riders hurtle 75 miles per hour down a 205-foot hill. Fast, steep drops in the stock market are a lot less fun. Not everyone loves thrill rides, but even fewer people enjoy market downturns. During times like this, consider me your ride operator who’s checking to ensure your safety: Your safety harness is secure, and the track is intact to your final destination.
As your financial advisor, along with our investment team, it’s my goal to make the roller coaster as comfortable as possible. We monitor your plan and adjust our tactics to make a bumpy ride a little less scary. Here are some of the things we’ve been doing to manage portfolios during these challenging market and economic circumstances:
- Bid farewell to bond funds: We’ve removed most bond funds from portfolios because they’ll suffer in this environment of rising interest rates.
- Add downside protection: In place of bond funds, we’ve been using funds that provide downside buffers to protect you from loss while allowing you to participate in market growth, up to a cap, when the market recovers—which it will.
- Review and replace equities: After careful comparison of historical performance, expense ratios and core holdings, we recently decided to replace a few of the equity funds in most of our portfolios with securities we expect to fare better moving forward.
If, to implement these changes, I needed to sell mutual funds I purchased in your account less than 90 days earlier, I am crediting your next management fee for any short-term redemption fees the mutual funds charged.
I also recommend that you review your 401k investment allocations. Bond funds and even target date funds that contain bond funds will drag down performance for the next year or two. I’d be happy to help you with this.
Most importantly, we’ll ensure our strategy aligns with your long-term goals so that we stay on the correct track.
Gift Idea: Introduction to Investing
One of my nephews played the stock market game in elementary school and became intrigued with trading stocks. That Christmas, our gift to him was to open a custodial brokerage account and deposit money he could invest in companies that interest him. Ever since, we’ve made deposits into his account for birthdays, Easter and Christmas and occasionally have purchased an exchange-traded fund or mutual fund that should be a strong long-term holding.
Recently, one of my clients asked me to establish custodial brokerage accounts for their niece and nephew. They made a generous deposit in each, and I provided an account statement and a letter that they gave the children to explain the gifts. It says, in part:
Our financial advisor has invested the funds in an aggressive allocation model using mutual funds and exchange-traded funds. This strategy is to grow the money over the next several years. She will monitor and manage the investments and provide us with reports every three months. We will help you make thoughtful decisions about how to use this money for your future.
Don’t know what to get your favorite graduate to celebrate this milestone? Introducing young people to saving and investing is an invaluable gift. Minors cannot own their own accounts, so a trusted adult serves as the custodian until he or she reaches 21 years of age. With time and the power of compounding, any investment, large or small, has the potential to grow into a significant asset. You’ll feel blessed to be a blessing in your loved one’s life.
Another way to support a child financially is to contribute to a Section 529 college savings plan. Your contributions are invested to grow to support the beneficiary’s education. The money they use is free of federal tax as long as it’s spent on qualified expenses (tuition, room and board, textbooks). If you’re going to help pay for college or private school, funneling the money through a 529 plan first has advantages: Your contributions are deducted from your state taxable income.
Each of you can make financial gifts up to $15,000 per person per year without needing to file any paperwork. If you exceed that amount, a gift tax form (IRS Form 709) may be required when filing your income tax return—no big deal!
Invest in You Is on a Roll
In May, we hosted the third event in my new Invest in You series for women in the community. Called “Four Paws & Full Hearts,” we collected donations for the Center for Animal Health & Welfare and made cat toys and dog treats for the pets awaiting their forever homes.
The next Invest in You event will be the Laughing at My Nightmare 5K. The nonprofit’s annual 5K is virtual this year, meaning people who registered can run, walk or roll 1 mile or 3.1 miles on their own rather than at an organized race. But for the second consecutive year, the MtM Financial Group team is organizing a group run/walk/roll to tackle the challenge together. (The photo shows our group in July 2021.) You are invited to join us at 6 p.m. July 13 to go the distance—or to volunteer to support the runners and walkers, such as by manning a water station or congratulating finishers at the end of the course. We’ll be collecting donations for Laughing at My Nightmare, which supplies free assistive technology and adaptive equipment for people with disabilities. We’ll post more details and an RSVP form on our website soon.
P.S. Please check the spam folder in your email program to ensure no messages from me fell into that abyss. I’ve heard from a handful of people with whom I’d communicated successfully in the past that they found a new email from me in their spam.
Radio Show Guests Enlighten Us
Gene and I love welcoming special guests to our “More than Money” radio show that broadcasts live 8:05 to 10 a.m. every Saturday. In case you missed these, catch up on our website or in your podcast app:
- On May 14, I interviewed Kegan Morris, Ash Brokerage retirement income consultant, about the various types of annuities. Perhaps you should take advantage of a free annuity audit.
- Our Social Security and Medicare specialist, Mark Bacak, joined me June 11 to explain Medicare Advantage Plans and MediGap options.
I’m hosting the show solo on June 25, and I’ll be interviewing estate planning attorney Keith Strohl about nursing home planning. I hope you’ll tune in. If you have questions on this topic, email them to me in advance, and I’ll ask Keith to answer.
Some photos to share:
Our team attended a Strategic Financial Advisors National Conference in April in Salt Lake City. One of the highlights (besides some very delicious meals and an amazing jazz band at the awards dinner) was seeing the Dallas Mavericks basketball team in our hotel.
I took on a new running challenge this spring: a 10-hour endurance trail run. I ran 36 miles and placed fifth in my age group, which earned an award. Parts of the trail were insanely muddy. I wore an old pair of running shoes and tossed them in the dumpster when I went home.
We have a new family member, a golden mountain dog named Murphy. He’s part golden retriever and part Bernese mountain dog. He’s going to be a big boy when he’s full-grown!
Connect With Me
“Invest in You” Connecting & Inspiring Lehigh Valley Women Join our newest organization focused on bringing women together to support one another and our community. We meet every quarter for a great cause with great people – keep an eye out for info on our next event or send an email to [email protected] to be added to the email group.
Variable annuities are long-term investments suitable for retirement funding and are subject to market fluctuations and investment risk, including the possibility of loss of principal. Annuity guarantees, including guarantees associated with benefit riders are subject to the claims-paying ability of the insurance company. Surrender charges may apply if money is withdrawn before the end of the contract.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should be relied upon when coordinated with individual professional advice. This information is not intended to be a substitute for personalized financial planning, tax planning, or legal advice.
Securities offered through The Strategic Financial Alliance Inc. (SFA), Member FINRA, SIPC. Advisory and tax services offered through MtM Financial Group, LLC which is otherwise unaffiliated with SFA. 4505 Hanoverville Road, Bethlehem, PA 18020. SFA does not provide tax or legal advice. Supervising office 888-447-2444.