As you develop and modify your investing strategies over time, one important factor you need to consider is liquidity. Investopedia defines liquidity as “the term used to describe how easy it is to convert assets into cash.”
Cash is your most liquid asset because it can always be used easily and immediately. And cash is what everything else is compared to in terms of liquidity.
Over the course of your life, your priorities may change, and you may need quick access to cash from your investment portfolio. While you may be considered wealthy in terms of the total value of assets you own, if you are unable to quickly convert some of those assets into cash during times of need, it could put you in a tight spot.
We’ve discussed the financial literacy gender gap in this blog before, but a new survey by Fidelity Investments shows just how bad financial literacy has become among all Americans, no matter their gender.
In a recent report, MarketWatch outlined some questions and results from the survey, and we’ll examine a few of them in this blog and provide our input.
Q: Roughly how much do investment professionals estimate people should save by the time they retire?
According to the Internal Revenue Service (IRS), nearly 80 percent of people who file taxes receive a refund of some amount.
It’s a great feeling to get an influx of cash, but before you go and spend it all in one place, consider this an opportunity to grow your savings or to invest. It may not seem like a fun option in the present moment, but your future self will thank you.
Here are some ideas:
While we expect the bulls to run in the equity markets during the short-term, we still see a potential bear market and/or recession on the horizon – i.e. 2-3 years from now.
So now is the time to prepare your portfolio by mixing in opportunities from alternative asset classes that don’t correlate directly with the stock and bond markets. That way, whether the bears return or not, your portfolio can be protected from a devastating loss.
Any time you want to add an alternative investment to your portfolio, we recommend that you consult with a wealth manager that specializes in those kinds of investments. We also recommend that you first gauge your risk tolerance, so you and your advisor can build an investment strategy that both fits your needs and resides in your risk comfort zone.
As we stated in our last blog, we believe the current bull market may well run for another 2-3 years based on current indicators (not just the “Trump Bump”). But why?
Historically, an economic recession occurs between 45 to 57 months following the inception of an economic expansion. Characteristically, these recessions tend to be preceded by equity bear markets (declines of 20% or more) which are generally considered a “leading indicator”.
The Dow Jones Industrial Average hit 20,000 for the first-time last month as it continues its march into record territory – showing that there is no slowdown in the current bull market that has lasted almost eight years. The question on our minds, as well as others in the investment community, is whether or not this current market surge is just a “Trump bump” or is part of a more sustainable trend?
MarketWatch published a recent chart and article stating that this bull market may last another 7-8 years.
If you don’t trust your wealth manager, then you should find someone else. It’s as simple as that, because trust is by far your most important asset when building wealth.
Between the high-profile Ponzi schemes in our recent past and the misinformation that currently clutters the investing world, many people today don’t fully trust their investment advisors. And this trend is illustrated in a recent American Association of Individual Investors (AAII) survey that showed more than 65 percent of investors lack that vital trust.
The glaring fact is that a single, unscrupulous investment advisor can have a major, destructive impact on your wealth and life savings—eradicating years of your hard work.
Everyone has their own unique tolerance for risk. That is, the amount of risk they’re willing to take on in their investment portfolio. It varies greatly person to person and has traditionally been hard to quantify, until now.
With a new tool available on our website and powered by Riskalyze, all you have to do is take a five-minute quiz and we can give you your “risk number.” Think of it as your sleep number, but for risk.
The quiz covers topics such as portfolio size, top financial goals, and what you’re willing to risk for potential gains. The tool will then pinpoint your personal risk number to help guide your investment decision-making process moving forward.
For years, we have wearily anticipated that at some point interest rates and inflation would rise from their historic lows and bring trouble to the bond markets—and that time has finally arrived. The changes we are currently witnessing have come swiftly as bond prices decline resulting in higher yields and investor losses.
The results from the U.S. Presidential Election, combined with this week’s Federal Reserve decision to raise interest rates another 0.25% (along with stated intentions for as many as three more increases in calendar 2017), has driven 10-Year U.S. Treasury Bond yields from around 1.4 percent just 5-6 weeks ago to more than 2.6 percent today (and possibly climbing higher).
That’s a phenomenal increase that has resulted in tremendous losses of up to 30 percent for people holding these investments.
As we near the end of 2016, now is a good time to examine how you can reduce your tax burden before December 31. While we’re not tax experts, we do know several wealth management and investing strategies that you can consider that may help. One of those strategies is tax-loss harvesting.
What is Tax-Loss Harvesting?
Tax-loss harvesting occurs when you decide to sell an investment that has experienced a loss, and then use that loss to offset taxes on both gains and income. It’s a strategy that typically applies to short-term losses held for less than a year, not for investments you’d like to hang on to long-term.