Financial Matters

Tips and news from the financial experts at Attentive Investment Managers.
Dec
15

Higher Rates: The Tempest in the Teapot

Higher Rates: The Tempest in the Teapot

Anybody who was surprised that the Federal Reserve Board decided to raise its benchmark interest rate this week probably wasn't paying attention. The U.S. economy is humming along, the stock market is booming and the unemployment rate has fallen faster than anybody expected. The incoming administration has promised lower taxes and a stimulative $550 billion infrastructure investment. The question on the minds of most observers is: what were they waiting for?

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Aug
05

Diversification

Diversification
So far, we have discussed the concepts surrounding building a financial pyramid, risk vs reward, and understanding your own risk tolerance. These ideas give you a clear path in which to create your ideal allocation of investments. Here is where diversification comes in. Whatever your risk tolerance level or what your goals are you must use diversification as part of your investment strategy. So what exactly is diversification? Diversification is allocating your assets across the major asset classes (stocks, bonds and cash) in order to make your best possible return within your risk spectrum. Each class then has a deeper diversification capability – you may take advantage of different investment styles such as growth or value stocks and even further by sector such as technology or healthcare. Diversification is a balancing act that encompasses your risk tolerance. All investments have a certain amount of risk and by utilizing diversification strategies your goal...
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Apr
13

2016 First Quarter Report: The Bear That Wasn’t

2016 First Quarter Report: The Bear That Wasn’t
The first quarter of the new year has brought us small positive returns in many of the U.S. market indices, which means that investors survived—for now, at least—the worst start to a calendar year ever for the U.S. stock market. The easy call at the beginning of the year would have been to bail out when the markets were declining and sit out the widely-predicted start of a painful, protracted bear market. Some analysts were talking openly about another 2008-9 drop in share prices. But 10% market declines are simply a part of the market's normal turbulence, and anyone who spooks as soon as they see a month of bearish sentiment is likely to miss out on the subsequent gains. Since hitting their 2016 lows on February 11, both the S&P 500 index and the Nasdaq Composite have gained roughly 13% in value. That doesn't guarantee that there will be gains going forward, however. The Market Watch website reports that half of the S&P 500 sectors are reporting declin...
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Feb
12

Don’t Try to Catch a Falling Knife

Don’t Try to Catch a Falling Knife

There has been much discussion over the last month and half about Bear Markets, Sell-offs, the Global economy and a possible Recession. The vast majority of analysts believe we are not in a recession (neither the U.S., China, nor Europe) and that most economic indicators seem to point to the fact that overall the U.S. economy is strong. In fact, most analysts indicate that there is only a 20 -30% chance of a recession in the making for the U.S. In addition, trucking and retail industries are showing signs of stabilization indicating that things did not get worse in January. The factors that are seemingly the 'cause' of this downturn are angst surrounding global growth, politics, oil and Euro banking woes and each day one or another have been blamed for the sell-off during this downturn. However, none of them should be a catalyst for the down market indicating a true disconnect between reality and what investors in the market are thinking. It is important to note that when investors are buying in huge rallies it's traditionally thought the market has created a herd mentality however, when they are selling in bulk during downturns there is an assumption they are right.

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Jan
11

2015 Year End Report:

2015 Year End Report:
​In the past year, we experienced many things—a prelude to a Presidential election, a renewal of terrorist concerns,—but in the investment markets, we will look back and yawn. Despite some entertaining ups and downs, particularly in the third quarter of the year, the markets ended pretty much where they began, eking out small gains and losses pretty much across the board. The final three months of the year provided investors with gains that were tantalizingly close to wiping out the losses of the previous three quarters. What's going to happen in 2016? Of course, nobody knows with any degree of certainty. But many professional investors are approaching the new year with an unusual degree of caution. By most metrics, U. S. stocks are slightly pricier than their historical averages. That doesn't mean they can't get more so, but it seems unlikely that people will pay a lot more for a dollar of earnings in the coming year than they will today. Meanwhile, economic growth is moderate at best...
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Dec
14

Mike's "Rule of Thumb"

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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Mar
15

Sound and Fury

Sound and Fury
For all the drama we've experienced in the past few months and disturbing but ultimately not harmful news in Europe, China and Puerto Rico, the second quarter of the new year has brought slightly positive returns in many of the U. S. and global indices,. For the second consecutive quarter, investors experienced a mild roller coaster of up and down days in the U.S. and global markets, small panics and surprising rallies that ultimately cancelled each other out in what trading professionals refer to as a sideways market. For the second consecutive quarter, investors are looking over their shoulders at interest rates, waiting for the Federal Reserve Board to finally take its foot off of interest rates, 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. But of course investors have been waiting for this shoe to drop for the bet...
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Due to renewed State orders for shelter-in-place we will be modifying our office operations. We will be suspending services at our physical office for the public. However, we are available to you via web meeting (zoom), email and telephone (Phone lines have been forwarded to our personal cell phones) during regular business hours. We will be able to fully service all your investment needs with no interruption.

You may drop contribution checks at our office through the mail slot or they may be mailed directly to TD Ameritrade (address listed below). Please be sure to notate your account number on the check.

TD Ameritrade
PO BOX 650567
Dallas, TX 75265-0567

Rest assured that we will continue to monitor your investments and market conditions on an ongoing basis with no interruption. Should you have any questions or concerns please feel free to contact us.

We will navigate this crisis as best we can, coming together and making shared sacrifices. We hope that we can help to slow down the effect of this virus together and solve this swiftly. We also wish everyone well and would like to extend our gratitude for your patience during these trying times. Continue to watch for updates from us.