FINANCIaL
FIELd NOTES
Planning For Unused 529 Funds
I recently met with a client whose grandchild has gotten a full ride for the first year of college and will may graduate without ever having spent a dollar or tuition, room, and board! While she was thrilled, she was also concerned that the 529 may go to waste.
Thankfully, there are several options with unused 529’s that provide incredible flexibility…
Why Most Investors Lose at Stock Picking (Even the Pros)
I’ve met with many clients over the years who own individual stocks – some have been huge winners and others not so much. Sometimes it makes up a meaningful portion of their net worth, other times it’s a tiny fraction. I can understand the allure of stock picking.
Check out the return of $10,000 over the past 20 years (2005-2024) in the following stocks. Nvidia turns $10k into $7.5mm, Netflix into $5mm, and Apple into $2.5mm. The stock market index (S&P 500), just $71,000…
How Retirees Can Turn Money Into Lasting Memories
If you’ve ever hesitated to spend your hard-earned savings on something fun, you’re not alone. Many retirees struggle to shift from saving to spending mode. I’ve seen this first hand many times. I’ve told many clients some version of “If we assume you spend at this level, you will likely die with significantly more than you have today.”
But there is a common mental barrier to spending that is incredibly difficult for prudent savers. For the clients that do make the shift successfully, I’ve found that they start spending one two things…
The Trouble With a Single Data Point
A single headline can move the market, but sometimes, the numbers behind those headlines are more complicated than they appear. The first quarter of 2025 offers a perfect case study. U.S. GDP declined by .3% in Q1, sparking fears of a looming recession. While that may certainly materialize, a closer look at the data shows a different story.
The decline was not due to changes in consumer spending or investments, it was due almost entirely by “net exports.” When the US imports more than we export to other countries, it is a drag of growth. We imported significantly more in the Q1 than we exported…
Why Even Perfect Market Timing During Recessions Fails
Despite the strong recovery of stocks over the last few weeks, many investors are rightfully concerned that we may be heading into a recession. While there has been progress with trade negotiations, there are still some tariffs already in effect and possibly more on the way. This has let to continued uncertainty and concern of a economic slowdown. I’ve fielded numerous questions regarding when I think the end of the cycle may be. The truth is I don’t know. And even if I did know, there’s not a whole lot an investor can do with that information. If I gave you a crystal ball and you could know the exact day that a recession would begin and end, do you think you could beat the market?
The answer, surprisingly, is “no.” From 1934-2024, the average return of the S&P 500 was 11.5%. If you sold at the start of a recession and bought at the end, you earned 10.4%…
Do Retirees Accurately Assess Their Long-Term Care Risks?
I recently met with a client whose close friend had just lost a parent after a 7+ year battle with dementia. Their friend had spent countless hours personally caring for their parent before hiring care and spending several hundred thousand dollars. It got them thinking about their care later in life and whether we had allocated enough funds for those expenses. I’ve also met with plenty of retirees who don’t have a plan for long-term care and haven’t given it much thought. There can be risks with planning too much or too little. If you fear the worst-case scenario, you’re more likely to underspend in retirement by putting away too much money for a low-probability event. If you don’t plan at all, you could put your spouse, children, or family members in a challenging position later on.
Long-term care (LTC) is a critical component of retirement planning, yet many retirees may not fully grasp the likelihood or implications of requiring such care. A recent study by the Center for Retirement Research at Boston College compared individuals' perceptions of their LTC needs with objective assessments…