2019 Third Quarter Newsletter


As we do before every missive is published, we sit down as a Group and talk about issues that could influence markets.  Usually the list is less than ten items but this quarter’s list went on for two pages.

For example, our list includes:

  • Trade war is not getting resolved (historically bad for stocks).
  • Will the trade war get resolved (should be really good for stocks).
  • Interest rates briefly inverted during the quarter, raising fears of a recession (historically bad for stocks).
  • Will there be a recession and if so, when (historically bad for stocks in about a year after it begins).
  • Escalation of activities in the Middle East (anticipated to be bad for stocks).
  • Politics, impeachment, elections (unknown).
  • manufacturing sector on a monthly basis through surveys of hundreds of companies.  Their report is widely followed because it is an early indicator of what the economy is doing in real time.
  • Stock market valuations appear high (historically bad for stocks).
  • Overnight credit markets for interbank borrowing are not functioning well, forcing the Federal Reserve to intervene to provide cash to banks (no impact yet for stocks).
  • Will the Federal Reserve start another “quantitative easing” program (historically good for stocks) to put more money in the financial system?
  • Will interest rates decline (historically good for stocks).

We could go on and on but what is not being recognized by most investors is the stock market has not gone down with all these issues right in front of their eyes.  In fact, it is less than one percent from its all-time high?  How could this be?

We think the answer is pretty simple: most of our list is noise to investors.  What the markets are focusing on is what they always have: valuation and interest rates. 

The S&P 500 is expected to earn around $178 per share in 2020 (Seven’s Report, 2019).  The S&P 500 ended the third quarter at 2,977; this is 16.7 (2,977 / $178) times 2020 earnings.  This multiple is slightly above a historical earnings multiple of about 15.5 times earnings.

We believe the key to this multiple is the validity of $178 per share earnings for 2020.  This is where the trade war may come in to play.  Should it persist, there is a high probability $178 per share is too high.  If resolved favorably, the U. S. economy could see a significant boost if tariffs decline or go away.  This should increase earnings and the $178 mentioned above could be too low.

If not resolved within the next few months, increased costs should become an issue for the U.S. consumer, perhaps lowering spending and causing the economy to meaningfully slow.  An earnings decline and a market pullback would likely ensue.

For example, the Institute for Supply Management (ISM) supplies an economic indicator that measures growth or contraction of the U.S.
Last week, its monthly measurement of the economy showed the largest contraction of industrial manufacturing since 2007-2009, raising recession fears.  The decline is widely blamed on uncertainty around tariffs. (Trading Economics, 2019)

For now though, investors still believe the $178 figure will be met, supporting the current U.S. stock market valuation keeping in mind this is a forward looking estimation for an index and is not guaranteed.  Indices are unmanaged and you cannot invest directly in an index.

Regarding interest rates, we always look at the ten year Treasury Note, or what we call the lowest risk rate of return.  Put another way, it is the rate of return that you can earn with the lowest risk.  Money follows rates, the lower the rate a T-Note offers, the more money that may flow to other investments and vice versa if rates are increasing.

Currently, the ten year T-Note rate is near an all-time low of 1.60%.  The S&P 500 index dividend yield is 1.96% (Standard and Poor’s, 2019).  Rarely is it higher than the ten year T-Note.  With this situation, investors are now willing to accept more risk in their portfolios to get extra return, supporting stock prices.

The other indicator we watch closely is cash available in the financial system.  This was the canary in the coal mine in 2008 - 2009 and with global debt levels higher than 2009, we believe it is still a valid indicator to watch going forward to watch for signs of trouble. 

For now it is easy for corporations to obtain credit.   While we can always have a ten percent market decline, until companies have a tougher time obtaining credit, we do not see any major (down twenty percent) market decline in the near future.  Our estimation supports stocks.

Combining all this together, there are good reasons why U.S. stock markets are near record territory. It is however one of the most uncomfortable bull markets in history because of all the news.  We choose to ignore the daily news for now.  One thing we are very confident in writing: expect recent increased volatility to continue as who knows what tweet is forthcoming.   

Paul A. Capeloto, Managing Director – Investments

The Meydenbauer Wealth Management Group
of Wells Fargo Advisors

Dividends are subject to change or elimination and are not guaranteed. Wells Fargo Advisors did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the author(s) and are not necessarily those of Wells Fargo Advisors or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results. Additional information is available upon request.

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Are Money Market Mutual Funds an Appropriate Alternative to Cash

in the Current Interest Rate Environment?


By Paul Capeloto and Sean McGowan


What is a money market mutual funds (MMF)?  A MMF is a type of open-end mutual fund that focuses on capital preservation and invests in short-term, high-quality, U.S. dollar-denominated securities that mature in 13 months or less.  Like all mutual funds, MMFs are a security sold by prospectus (A legal document issued by fund companies selling securities). 

MMF’s invest in securities such as U.S. Treasury Bills, commercial paper, and other short-term investments issued by the U.S. government, U.S. corporations and state and local governments. MMFs available to retail investors seek to maintain a stable net asset value at $1.00 per share although, there is no guarantee they will be able to do so and pay interest. 

MMF yields generally reflect short-term interest rates.  These rates are variable and tend to follow the federal funds rate; a rate established by the Federal Reserve (Fed) based on numerous economic indicators that show inflation, recession and other gauges of economic health.

With the federal funds rate now at 2.25%, many prime MMF's (that is, MMFs that invest in corporate securities) are now yielding over 2%.  Each time the Fed raises or lowers the federal funds rate, MMF rates tend to follow within a few months.

Currently, the Fed is indicating they may lower the federal funds rate in anticipation of a slowing economy.  If so, MMF rates will decline. But, if you are earning little or nothing on cash balances not expected to be used soon, current and future MMF rates are very appealing and could be considered as an alternative to cash, when appropriate.

We give no opinion on the funds to consider as your risk tolerance and asset allocation will dictate your choice of MMF.

Although money market funds seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. Money market funds may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the liquidity falls below required minimums because of market conditions or other factors. An investment in money market funds is not a deposit of the bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 

The opinions expressed here reflect the judgment of the author as of the date of the report and are subject to change without notice. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request.

CAR-0919-03312


Beyond Financial Literacy:

Inspiring Our Young Adults to Lead with Their Money.

By Tama Borriello


A recent comment by a financially prudent young adult inspired me to think about the next generation of clients whose parents had successfully educated them over the years on sound financial decisions.  The enthusiastic comment was, “As soon as I inherit, I’m going to just give it away!” While that is an extreme (with the other extreme being the well-known statistics and stories that point to inheritances being gone within a generation or blown on cars and vacations), we’ve realized over the years that teaching our client’s children about smart money practices is just an introductory step of financial literacy.

Over my career, I have found that taking the next step in financial stewardship involves learning what is important to your young adult children and helping them articulate their values.  We have had remarkable results when we let go of our assumptions and what we think their values should be and engage enough to listen to what the next generation has internalized as their definition of success.  We realized that many young people feel overwhelmed by the amount of options they have to honor their own socially conscious values which leads to difficulty in making thoughtful decisions.

To simplify this, we’ve focused on two items.  First, determining “touchpoint” words that reflect how our future community members wants to be perceived or remembered (aka Legacy).  And second, detecting “touchstone” words that symbolize the standard of values they hope to espouse.  This simple word exercise helps to unveil their larger purpose or mission and allows one to streamline their many different options without feeling overwhelmed.  By using words that define our values we can maintain consistency and purpose with action. 

There are other unique approaches we’ve applied as well.  We have worked with families to set up family foundations, both big and small.  This allows the next generation to participate in charitable giving based on their family values which can leave a lasting impact.  We believe that this has also enhanced the next generation as they begin to understand how to strategize for their own saving and planning in a meaningful way.

As for the young man whose parents were taken aback by proclaiming he was going to give away their estate; he came away with the realization that his value-based plans would be determined by his role as a steward.  While already fulfilling that goal through his chosen profession and lifestyle, he began to comprehend the impact he could have through stewardship of his family assets.  At the end of the day, this is what the Meydenbauer Group’s values encompass – the opportunity to guide the next generation to enriched family relationships and thoughtful impact.

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A Follow Up to Our Recent Market Update

By Ben Pawlak


On August 14th, the Dow Jones Industrial Average Stock Index was down about 800 points or a little over 3% for the day.  While there are obviously many financial news stories these days, the main culprit was what is termed “an inverted yield curve” in U.S. Treasury Bonds, specifically the two year and ten year Note market.

What is an inverted yield curve?  A little background first.  The U.S. Treasury issues debt from one month to thirty years maturity.  Historically, the further out you invest, the higher your interest rate because of the risk of investing long term.  Consequently, the ten year Note normally returns more than the two year Note.

However in some cases, the two year Note returns MORE than the ten year Note.  This is called an inverted yield curve.  Why do stocks fear this type of market?  It’s because it is widely viewed as an upcoming recession indicator and stocks don’t like recessions.

But what does history actually say about the 2/10 yield curve inversion?  While it is correct that each recession since 1950 was preceded by this inversion, it took fifteen months on average after the inversion for a recession to occur (Sevens Report, 2019).  In the last five occurrences since 1978, the S&P 500 has been an average of 13.5% higher a year later, 14.7% two years later and 16.4% three years after the inversion (Dow Jones Market Data, 2019).  The shorter term expectations are more volatile with the 90 day data anywhere from down 10% to up 13% and an average of +2.5% return (Barron’s, 2019).

In conclusion, bear markets historically do not begin immediately after an inversion occurs, however volatility picks up.  So make sure your long term investment plan and asset allocation is where you want it.

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Wells Fargo Advisors did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the Meydenbauer Wealth Management Group of Wells Fargo Advisors and are not necessarily those of Wells Fargo Advisors or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results. Additional information is available upon request.

Market Update: The Return of Volatility

By Sean McGowan, CIMA


In 1986, the movie Poltergeist II came out and there was one line that has stuck 3 decades later… “They’re back!”   It’s been over a decade since the Great Recession and there is one thing that has come back for sure, volatility.  Volatility does not mean negative returns, it just means more price movement. Today we are back at normal levels of volatility that have been absent for a considerable period.

Our team believes that volatility is here to stay, but market returns will still trend positive. Here are the 3 key drivers of future volatility…

Trade war with China – Expect the “tit for tat” to continue as the two largest economies of the world fight for the final word and upper-hand.

Geo-political conflict – It may be nothing more than a war of words, but North Korea and Iran will continue to grab headlines.

Election Cycle – Between the Tweets and the debates, we expect it to be a fight for 2020.

With those three points laid out, we also think it is imperative to give you what The Meydenbauer Wealth Management Group of Wells Fargo Advisors feels are the biggest positives that will keep this market moving forward…

The Fed – The Federal Reserve has shown in recent action that they are here to support the economy. We believe in the saying, “Don’t Fight the Fed”.  We expect the interest rate environment to stay conducive.

Low Unemployment/Low Inflation – We expect unemployment to remain at record lows and inflation to stay in check…. All supporting the thriving US consumer.

Earnings – While earnings growth is not as strong as 2018, it is still very good on a long term basis and well into positive territory. This will support equity valuations.

With that stated, in May we were concerned with global stock market risk and felt that the bullish returns at that point were too optimistic.  We decreased stock exposure across the board on all of our managed portfolios.  While we didn’t predict the particular scenario of the last few days, we were not blindsided by the vulnerability of a fully valued market to any bad news. This approach allows us the capability to proactively reduce risk within the portfolios that are under our active management.  While we are aware that we may have an opportunity to invest in the market at lower prices currently, we are also keeping in mind that Chinese currency issues were also a factor in the 11% pullback in August of 2015.

In conclusion, we feel our portfolios remain diversified with an eye always on mitigating risk.  We continue to feel positive about the markets and assess the temperature of the global markets on a daily basis. 

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2019 Second Quarter Newsletter

Goldilocks is back in the house (not too hot, not too cold, just perfect) as both stock and bond markets had a great second quarter and continue to have a great year through June.  The S&P 500 had its best second quarter return since 1997 and it was the best June since 1964!

But it wasn’t easy as the S&P 500 significantly declined in May only to roar back by quarters end to near new highs (Wells Fargo Investment Institute (WFII), 2019).  The S&P 500 finished up 4.3% for the quarter and 18.54% for the first half of the year (WFII, 2019).

U.S. bonds returns were equally impressive as the U.S. ten year Treasury Note went from 2.60% on April 16th to 2.03% at June 30.  In the bond world, that is one of the sharpest declines within a ninety day period on record (Barron’s, 2019).  You can thank one source for a great six months for all investors:

The U.S. Federal Reserve (the Fed).

You may remember the Fed was indicating two or three interest rate hikes as recently as December 2018.  The S&P 500 declined 19.9% from high to low in the fourth quarter of 2018 on this news.  They went to a neutral stance on rates in January, 2019 and stocks advanced (Wall Street Journal, 2019).  In April, they indicated rate cuts may be in the works and stocks were off to the races.  In the span of four months, instead of two rate increases, markets now believe there will be two rate cuts by year-end to combat a potential slowing economy.  This gave an all-clear indicator for investors to accept risk.  There was a noticeable jump in cash leaving money market funds into stocks, bonds and real estate.

This major decline in interest rates is also happening elsewhere.  The Fed’s equal in Europe, the European Central Bank came out and said they too would lower rates in the near future.  Europe’s rates are already significantly below ours to the point that over thirteen trillion dollars are now invested in negative interest rates throughout Europe and Japan; meaning you pay the bond issuer money to hold your money.  

Think of that…, for safety of principal, you will pay a government to hold your money.  We have not seen this in the U.S. but it is commonplace in Europe.

So, even though our rates appear very low, on the global stage they are not.  As an example, our ten year Treasury Note yields about 2%, Germany’s ten year note yields about -.40 of 1%.  That 2.40% difference is a very large historical spread which draws a lot of international investors to invest in our T-Notes and Bonds (Barron’s, 2019).

What is unusual is our economy is growing at over 3%.  Historically, you would have U.S. interest rates above the growth rate to prevent the economy from growing too fast. But, global growth is much lower than the U.S., so the Fed finds itself in a very difficult spot (The Seven’s Report, 2019).  The economy is doing fine and it does not want to add fuel to the fire by adding the stimulus of lower rates to increase borrowing.  Yet, if they don’t lower rates, they run the risk of putting the U.S. economy at a disadvantage to those countries that are lowering rates, perhaps causing the one thing they are trying to prevent: an economic slowdown as U.S. sales overseas decline.

You might think this is an awful lot of commentary about bonds but stocks are one of the largest benefactors of lower rates because their returns compete against bond returns. For example, at a 3% risk free return through investing in a long term Treasury Bond, an investor might say that return is high enough for what is needed so there is no reason to take on additional risk of buying stocks.  But at 2%, that same investor may say that return is not high enough so I will accept risk by investing in stocks.    

With all this information to digest, here are our thoughts.  We do believe the Fed will lower rates once or twice later in the year to prop up our slowing economy.  This is what investors expect and we believe these moves are already factored in current stock valuations.  If this comes to pass, then the major stock market catalyst of lower rates will flip to neutral as further rate cuts may not occur.  Under this scenario, the hope for stocks then is lower rates spurring on the economy and growth and earnings accelerate.  On the other side are issues like conflict in the Middle East, tariffs worsen or President Trump tweets the wrong thing. 

For now, the phrase “never fight the Fed” holds.  If you have not done so in the last year, we suggest now is a good time to rebalance your portfolio.  This will take you back to whatever your original investment allocations were which we hope matches your risk tolerance.

Paul A. Capeloto, Managing Director - Investments
The Meydenbauer Wealth Management Group
of Wells Fargo Advisors

The views expressed by The Meydenbauer Wealth Management Group of Wells Fargo Advisors are their own and do not necessarily reflect the opinion of Wells Fargo Advisors or its affiliates.

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The Meydenbauer Group welcomes Cyndi Childs and Edward Madalina


2019 has brought about many positive changes for our group, and among them is the wonderful news that we have two new associates that have joined our team!  We are proud to introduce Cyndi Childs, Senior Registered Client Associate and Edward Madalina, Client Associate to The Meydenbauer Wealth Management Group of Wells Fargo Advisors.  They will be helping our clients with their service needs.

Cyndi brings almost 30 years of professional experience and wisdom to the team. Her entire career has been engaging clients and supporting to Financial Advisors. Cyndi provides excellent client service through her warm and exuberant personality. Cyndi lives in Bothell with her husband, two daughters and two dogs. Cyndi stays true to her Brooklyn upbringing with a passion for cooking, wine tasting, traveling and family time.

Edward has supported financial advisors and their clients for over 7 years.  He has a background in banking and tech from years of employment with Wells Fargo and AT&T and brings a unique skillset that should benefit our team goal of outstanding client service. Edwards’s interests include traveling, soccer and attending car shows.  When he is not at work he enjoys spending time with his better half, Nadia and 2 year old son, Elijah.

Please join us in welcoming them to our team!

0219-02229

Four Ways to Give with the New Tax Law

By Ben Pawlak

This year we saw market headlines dominated by politics, tax reform and the US trade war with China.  All in all, it has been a volatile year, but one thing that has flown under the radar is, if you file a joint tax return, how tax reform may affect your charitable deductions in 2018 and beyond.
Itemized deductions include such things as real estate taxes, certain medical expenses and charitable contributions.  Before 2018, if your itemized deductions were more than the standard deduction amount of $12,700 per couple, you itemized.  Put another way, if itemized deductions are greater than the standard deduction, you receive a greater tax benefit by itemizing your deductions.
In 2018, the standard deduction jumps from $12,700 per couple to $24,000 per couple (and $26,600 if you and your spouse are both over the age of 65).  This means that if your itemized deductions do not exceed $24,000 per couple, you will most likely take the standard deduction.
The new tax law limits state and local tax deductions to $10,000 thereby reducing the likelihood that you will itemize your deductions.  A little planning may help.  If you were to donate $10,000 per year and only have a $10,000 deduction for real estate taxes, you are below the $24,000 standard deduction.  In essence, unlike prior years, you receive no tax benefit for your contributions.
At the Meydenbauer Group, we encourage philanthropic giving, so we've listed four ways to donate and receive a tax benefit for doing so:
Every other year, bunch your donations so that your itemized deductions exceed your standard deduction for that year.
Donate directly to a charity through a direct IRA distribution. (must be over 70 ½ to exclude the IRA distribution from taxable income)
Donate highly appreciated stock or other assets to avoid capital gains taxes.
Set up a Donor-Advised Fund to receive your charitable gifts.
What is a Donor-Advised Fund you may ask?
A donor-advised fund lets you make a charitable contribution and receive an immediate tax break for the full donation. You can then select specific grants from your fund to the charities you are most passionate about over time.  For example, if you give $10,000 to a local food bank each year, you could instead donate $50,000 this year to a donor advised fund, receive the full deduction, allowing you to itemize for 2018 and distribute $10,000 each year over the next 5 years to your favorite charities.
FYI, some of our favorite causes this year are:
Paul: Virginia Mason, Northeast Helpline, Roosevelt High School Foundation and the Humane Society
Tama: Youth for Understanding and Snoqualmie Valley Community Network Mentors
Sean: Evergreen Mountain Bike Alliance (to preserve trail maintenance and health)
Ben: World Relief Seattle, DADS, and Seattle Against Slavery


The Meydenbauer Group Launches its Longevity Luncheon Series

By Tama Borriello and Ben Pawlak 


Have you thought about how you want the next phases of your life to be as you get older?  We think about this subject all of the time.  As many of our current clients can attest, thoughtful planning, both financially and for personal fulfillment, can shed light on the balance between enjoying life to the fullest when you are at your healthiest and planning for ever increasing life spans.

Over the past twenty years, we have found that our favorite part of creating a life-centered investment plan for our clients are the stories of lives well-lived in alignment with personal and family values.  Lives full of fun and adventure.

We've also witnessed many creative approaches to the idea of retirement both for personal fulfillment and financial reasons.  Unlike generations before us, “retirement” has changed from a sedentary and relatively short period to an entirely new stage of one's life.

With that in mind, The Meydenbauer Group has been hosting our longevity luncheons and classes with local experts on everything from Medicare planning to maximizing how to navigate each stage of retirement and even finding a retirement mentor.'  If you have any questions please email Diane Manterola, Senior Registered Client Associate or call (425) 646-4871 to coordinate.

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Navigating Concentrated Stock Positions

By Ben Pawlak and Paul Capeloto



On July 26th, Facebook's valuation declined by over 20% in one day as their earnings disappointed the market.  A few days before, Amazon reported earnings above market expectations and the stock rose to an all-time high.

We have been hearing from many of our clients involved with both companies, explaining to us they have a high percentage of their net worth tied up in company stock.  They are inclined to hold the stock because it has done so well in the past, why would it not do so in the future?

Every investment decision comes down to one element:  how much risk are you willing to accept?  If you hold a highly concentrated position and you do not sell any of it, then you are accepting the fact you can create significant wealth if the company succeeds and have little wealth if it does not.  But with many technology stocks near all-time highs, we suggest you take a different course.

This recommendation comes from our past experience with Microsoft.  Microsoft hit an all-time high in 1999.  We remember talking to clients about lowering their concentrated positions, particularly if they had an upcoming cash need.  In virtually every case, these holders believed the stock would go higher and did not sell.  When it started to decline in price, they believed the stock would get back to where it was at year-end and then sell.  In essence, now they would sell at where it was.

Fast forward to 2016 when Microsoft finally topped its 1999 valuation.  That was a very long sixteen years for these people.  Now, will that happen again with Amazon, Microsoft, Facebook and Alphabet (Google)?  We don't know but here is what you should consider:

Identify your upcoming cash needs.For example, do you want to buy a house in the next few years?If so, consider selling some of your stock now and set the proceeds aside.
Once you have your set aside, then identify your risk tolerance level; are you willing to take the extreme risk of your net worth tied up in one stock? If so, you have nothing more to do and we hope you are worth many millions. But...
If you want to lower your risk, consider selling a certain percentage every 90 to 180 days (perhaps 10% to 15%?) and invest in a more diversified portfolio.This would help you create a long term portfolio.
The one thing you want to avoid is: making a sell decision after your stock has fallen.  Odds are you will feel terrible selling below the high of the stock but using the Microsoft example above, those people who sold Microsoft 20% below the high still came out way ahead of those who did not for the next fifteen years.  Point is, identify a price where you say no more and unemotionally step aside from part or all of your holding.

We can help you navigate these rough waters through planning.  Please let us know if we can help.

 

0818-02010


Responsible Values for Our World and Your Pocketbook

By Tama Borriello

Is it possible to invest in socially responsible growth while keeping your investment plan healthy and growing?

Socially Responsible Investing (SRI) can be a profound solution for those that care deeply about the environmental and social sustainability of the world, yet also need to responsibly plan for their own financial future. 

Effective socially aware investing has evolved from just investing in “feel-good” companies to actively engaging with all types of corporate leadership in pursuit of positive change.  Many socially aware fund managers are taking the the tact of working with corporations directly to document the positive financial results of lowering environmental impacts and having happy employees.  Several recent studies have hinted that companies with diverse leadership have better long-term performance and that companies that are considered the best employers also tend to have consistent stock returns over time.

For those concerned with the impact of fossil fuels on our environment, most active SRI funds initially screen out such companies.  The next step of choosing to reward good corporate behavior through research, education and collaboration is where real change begins to occur.  Recently, one SRI manager was able to meet directly with a Fortune 500 company to illustrate to them the fiscal advantages of changing fuel sources.  The corporate leadership team was open to the meeting and interested in the results as it was an issue that impacted their bottom line.

Corporations will continue to seek to maximize their profits and efficiency while taking the cost of environmental and social impact into the equation if shareholders continue to make their voices known.  More and more, corporate behavior is becoming part of the calculation when evaluating future profits and investment potential for traditional investment managers as well. 

Socially responsible managers have a renewed focus on illustrating that investing consistently with one's values is also consistent with sound investment and retirement planning.   There has been an increasing awareness that the screening process that filters for corporate citizens with environmental and social goals often tends to equate to high performing companies that merit long term investment ownership.

Just like any well-planned project or retirement, one can meet personal and financial goals by doing the homework on SRI Managers and creating a thorough and disciplined personal investment plan.  This includes evaluating performance and impact track records of socially responsible investment companies that share one's values and practice transparency.  At the end of the day, one can vote with their money for responsible practices for our earth and human kind while planning for a healthy retirement.

0518-01238 

Spring Training Overview

By Sean McGowan



Spring training 2018 was a busy time with our clients spread out amongst many teams across the Cactus League. It was wonderful hearing how offseason training went and how excited all our players are for this summer.  I spent time helping clients plan for in-season expenses and busy travel schedules as well as deposits and cash flow. Once the opening day starts, these players don't have time to come up for air; that's why planning is so important.  The Meydenbauer Group wishes our guys in the game an exceptional year of baseball!

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The Most Important Financial Decision for Millennials

By Ben Pawlak



Over the course of my career, I have met with many Millennials regarding their investment planning.  Ironically, I have had pre-established biases regarding millennials despite being one myself.  We have all heard stereotypes calling my generation entitled, lazy and idealistic.  I truly thought this would be the case when I started meeting with people my own age (33) and younger, but I have found that we are no more likely to be these things than other age groups I have met with; especially when it comes to money. 

Millennials I have met with come prepared with a good handle on their current financial state.  They usually worry about the same things as older generations such as debt, not investing enough, buying a home and family planning. 

The one thing that really jumps out to me as different from the previous generations is that Millennials want to get to specifics first.  We want to know how we stack up to our peers.  Are we saving enough for our age?  What is a good percentage for someone my age to put into my 401(k)?  How much should I be putting toward student loans vs. saving for a down payment on a house? 

The first thing I always say is; the most important thing for young investors is simply this: be in the habit of saving.   It can be overwhelming with all of the financial advice that comes at us from different sources such as our parents, friends, YouTube, etc.

Because I get a peek behind the curtain of generations of people who have reached retirement in different ways, I can tell you that the single biggest differentiator is that those that have reached financial freedom in retirement were in the habit of saving from a young age.  They put money away and invested it.  It's that simple.  So whether you're saving $50/month or $5,000/month it's a good start.

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The opinions expressed in this communication are those of the author(s) and are not necessarily those of Wells Fargo Advisors or its affiliates.
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