Portfolio

Dec

14

Mike's "Rule of Thumb"

Creating an appropriate allocation in a portfolio can be difficult. Aside from utilizing a risk tolerance profile there are some other methods for determining an appropriate mix of stocks and bonds for investors. One we utilize is Mike's take on the standard "Rule of Thumb" – which uses a factor of 100 minus the client's age to determine the percentage that should be invested in equities (stocks). Mike's "Rule of Thumb" takes into consideration the fact that everyone now, for the most part, is simply living longer. With our longer lives, not only will we need to provide income for a longer period of time we will also have potentially more time to grow that money. With this in mind, Mike uses a factor of 120 minus the client's age to derive the equity allocation. This guideline creates an allocation that is slightly more aggressive to facilitate faster growth accommodating the need for the longer income needs. As an example, with a 48 year old individual&nb...

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Tips stocks retirement Portfolio risk

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Aug

23

"Don't Panic"

Michael L. Dalton, CPA Retired, CFP

Market Report

It appears as though the correction we've been anticipating and talked about for the last couple of quarters is now upon us. Since July there has been quiet erosion in the equities markets, becoming what many have called a 'landslide' or 'free fall'. As of Friday, the S&P was down 7. 7% and the Dow down 10. 3%. Although, we understand stock market declines are emotional and anxious periods of time we would like to remind you, this was expected. The market has gone 46 months without a correction which is substantially over the 18 month norm We urge you to not succumb to downside and sell, we have spent much time positioning your portfolio to mitigate the downside risk as much as possible based on your risk tolerance.We DEFINITELY don't think this is a prelude to another 2008-style market decline. Leading indicators are still positive and lower oil prices and interest rates should help stabilize growth. One key takeaway is that the downturn and the selling in the last 4+ days has res...

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Forecast Portfolio risk Trading

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Jan

15

Stop Awaiting the Fed

Michael L. Dalton, CPA Retired, CFP

Market Report

The first quarter of the new year has brought us small positive returns in many of the U. S. and global indices, and more than the usual amount of anxiety along with them. Meanwhile, global markets are showing signs of life. If you were watching the markets day to day, you experienced a mild roller coaster, what trading professionals refer to as a sideways market. One day it was up, the next down, each day (or week) seeming to erase the gains or losses of the previous ones. The best explanation for this phenomenon is that investors are still looking over their shoulders at interest rates, waiting for bond yields to jump higher, making bonds more competitive with stocks and triggering an outflow from the stock market that could (so the reasoning goes) cause a bear market in U. S. equities. However, investors have been waiting for this shoe to drop for the better part of three years, and meanwhile, interest rates have drifted decidedly lower in the first quarter.This inter...

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retirement Portfolio Federal Reserve Interest Rates Forecast