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Connect with us!
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303.747.6455
Money can and should do good things: for you, your family, and the causes you believe in
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Michael Brady, President
Generosity Wealth Management
885 Arapahoe Ave.
Boulder, CO 80302
P 303.747.6455
F 858.947.3807
www.generositywealth.com
Registered Representative of and securities offered through Cambridge Investment Research, Inc. , a broker dealer, member FINRA/SIPC
Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Financial Planning services through Generosity Wealth Management, LLC, a Colorado Registered Investment Advisory firm.
Generosity Wealth Management, LLC and Cambridge Investment Research, Inc. are not affiliated companies
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The information being provided is strictly as a courtesy. Our company makes no representation as to the completeness or accuracy of information provided at these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, sites, information and programs made available through this site. When you access one of these sites, you assume total responsibility and risk for your use of the sites you are linking to.
The Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 large capitalization stocks with dividends reinvested. The Standard & Poor's 500 Index ("S&P 500") is an unmanaged, market capitalization weighted index of 500 widely held stocks, with dividends reinvested, and is often used as a proxy for the stock market. The Nasdaq Composite is an unmanaged, market capitalization weighted index of stocks listed on the Nasdaq Stock Exchange, and are reported as price return without reinvestment of dividends. Indexes are often used as a proxy for the stock market and cannot be invested in directly. Diversification and Asset Allocation Strategies do not assure profit or protect against loss in a generally declining market |
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January Volatility
In my video today, I discuss the most recent January volatility in the stock markets.
Does the worst January in the Dow since 2009 mean we need to change our strategy?
Is there any change I recommend since my last video about 3 weeks ago?
For the answer to these questions, listen to my 4 minute video.
 | | 2014 02 06 January volatility |
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Don't be a slave to history
Twelve months ago, the 5 year return for the S&P would have covered 2008 - 2012, for a +1.66% annual return (including reinvested dividends). Today and one year later, because a bad year dropped off (2008) and is replaced by a good year (2013), the 5 year annualized return jumps up to +17.94%.
Let's look at another longer term statistic. A year ago, the 20 year annualized S&P 500 return was +8.22% a year vs. +8.50% a year for long term Treasuries. Makes the argument that you should put all your money in long term treasuries, right? I mean, the annualized 5 year return for the S&P 500 was just +1.66% and it underperformed the 20 year annualized Treasury return.
Had you done so, you would have lost -12.7% last year (as measured by Barclays index of long-term Treasuries), and missed out on 2013's 32.4% gain for the S&P 500. The 20 year track record in one year has changed the 20 year average to +9.22% for stocks vs. +6.92% for Treasuries.
One of the most important lessons investors need to keep in mind is the "non-linear" nature of investments. Just because a particular investment (whether it is stocks, bonds, or some sector) has done well in the past does not mean it will do well in the future. And, the opposite is true as well.
When I give advice to clients, it's taking the past into consideration, but it's present and future focused.
So, don't be a slave to history.
Beneficiary Update
Now is a great time to ensure your beneficiaries are consistent with your wishes.
But you have a will? It doesn't matter if it's an IRA, 401k, or other type of account that transfers by "contract" vs. through probate.
Have an ex-spouse you used to have as your beneficiary but are now remarried? You have to proactively change it to your new spouse if that's what you want. It won't change by itself!
Talk with me if you need a good estate planning attorney recommendation.
Definition: Back-Of-The Envelope Calculation
Defined: An informal mathematical computation, often performed on a scrap of paper such as an envelope. A back-of-the-envelope calculation uses estimated and/or rounded numbers to quickly develop a ballpark figure. The result should be more accurate than a guess, but will be less accurate than a formal calculation performed using precise numbers and a spreadsheet or calculator.
MB Comment: I've done hundreds of financial and retirement plans/analysis for clients, and after about 23 years, I usually know the rough outcome even before inputting the data into the computer.
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Mike Brady turns 45
Who would have thought that little kid in the photo would grow up so big and strong?
Yep, 45 years old this week. Happy Birthday to me!
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 I'm here to help!....
I'd love to talk more with you about the above topics or anyway I can help you grow and preserve your money while providing for yourself, your family, and community.
Mike |
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