Financial Blog For Busy Families & Impact Investors

Linda Rogers 11/16/23 Linda Rogers 11/16/23

When you don't have an obvious beneficiary for your money... [video]

When you don’t have an obvious beneficiary for your money…

transcript

At least a few times a year, I will get a new client who has a blank beneficiary form for their retirement account, or an ex-spouse listed, or someone listed who has since died.

Now, many times the clients know this. They're just not sure who else to list, so they're feeling stuck.

First of all, you're not alone. Not everyone has kids or family members or friends that they want to leave their money to. That's nothing to be ashamed of. What's worked for these clients is to talk about charities that might be a better fit.

So I've asked clients, where have you given money to in the past?

Where have you donated your time?

What are your values?

What is important to you?

From there we go to charitynavigator.org (not dot com!). I'll put the link in the description below and you can click on 'Discover Charities' and using that information, find charities that are doing great work that align with your values. You can read more about the charities there, read about their rating system, do your own due diligence, but that seems to help people just get over that hump and come up with a charity to go ahead and list on that beneficiary form.

Be sure to like this video, subscribe and stay tuned for more money tips.

My name is Linda Rogers, Owner of Planning Within Reach.

Schedule a Call to Talk to Linda

Linda Rogers, CFP®, EA, MSBA is the owner and founder of Planning Within Reach, LLC (PWR). Originally from New Jersey, Linda services clients throughout San Diego county and nationwide. She leads the design of PWR's investment portfolios which utilize broad, low-cost investments that integrate environmentally, socially, and governance (ESG) factors.

Planning Within Reach, LLC (PWR) is a fee-only and fiduciary wealth management firm offering one-time comprehensive financial planning, ongoing impact-focused investment management and tax preparation services in San Diego and nationwide. PWR is a woman-owned firm that specializes in busy professionals and impact investors. Planning Within Reach, LLC and their advisors do not receive commissions and do not hold any insurance licenses or brokerage relationships.

Linda Rogers 11/15/23 Linda Rogers 11/15/23

Digital Estate Planning

Many of us have a plan for our home, 401k, and IRAs in the event of our passing. What about digital assets, such as emails, texts, social media, airline miles, cryptocurrency, music files, and photos?

Ideally, these accounts should be closed after someone dies to prevent identity theft, but not before the assets with value are distributed according to the deceased owner's wishes. In practice, most people don't have information on their digital assets in writing, leaving their beneficiaries spending months trying to piece together what clues they can find and, in many cases, never getting all the answers.

How to organize your digital assets

(1) Create an inventory of your digital accounts. Save the username, password, and email addresses associated with the accounts in a password manager, such as 1Password. You can invite your Executor to share a vault with you on the password manager or leave instructions on how to obtain access to the password manager after you die.

(2) Stipulate if there is any value associated with each account and what you want to be done after you are gone.

(3) Review the terms and conditions for the services you use where possible. You can also start with the most important accounts and contact them individually - ask about the policy and process after users die. For example, Google has an Inactive Account Manager program where you can designate a person to receive an email (that you write ahead of time) after your account has been inactive for so many days. That person can then have the option to download certain types of data that you have chosen to give them access to.

(4) Reach out to your estate planning attorney to see how digital assets are integrated into your existing estate plan documents. Because estate planning is state-specific and digital estate planning laws are evolving, they can likely provide additional guidance on things you should be doing given your current location.

Schedule a call to learn more about financial planning

originally published 12/22/2014

Linda Rogers 11/8/23 Linda Rogers 11/8/23

It's Time to Check Capital Gain Distributions

Many people learn about capital gain distributions when they file their taxes. Rather than wait for the surprise, I show you how to proactively prepare for the tax impact or take action to avoid it.

You may have to pay capital gain tax, even if you didn’t sell any shares of a fund.

Many people learn about capital gain distributions when they file their taxes. Rather than wait for the surprise, I show you how to project your fund’s capital gain distributions and how to decide if you should prepare for the tax impact or take action to avoid it.

A realized capital gain versus a capital gain distribution

Realized Capital Gains

A realized capital gain results from a sale. When you sell a position in your portfolio for more than you purchased it for, that difference (the market value minus the cost basis) is the realized capital gain. It is “realized” because you sold it. Log into your investment account and you will typically see 2 tabs - “Realized gains and losses” and “Unrealized gains and losses”. Unrealized gains and losses are for the positions that haven’t been sold yet.

Realized capital gains and losses are reported on your tax return. You pay tax on capital gains at either short-term or long-term rates. Short-term gains are for securities that you held for less than a year and the tax rate is the same as your ordinary income tax rate. Long-term capital gains are from securities held for more than a year and their tax rates are more favorable.

Capital Gain Distributions

Capital gain distributions are not the result of you selling a position in your portfolio. It is a gain that is passed onto you by a mutual fund that you own. It is also sometimes described as “phantom” income because you pay tax on it, but you don’t actually receive a check. It increases your basis when re-invested, but your position’s value is the same. With a mutual fund, the manager and his/her team are buying and selling positions throughout the year. When these transactions generate realized gains, they are required to pass the gains onto their shareholders by the end of the year - that’s you!

Capital gain distributions are not a surprise - don’t miss the planning opportunity.

Run an analysis right now (and every year in late November) to pro-actively look up the estimated distributions for the fund’s in your taxable portfolio. This will provide the information needed to help you decide if you should prepare for the tax impact or take action to avoid the distribution. Even if you held the mutual fund all year, if you sell it before it pays the distribution, you do not pay tax on it.

How to project this year’s capital gain distributions.

Fund companies typically post their preliminary distributions in mid-November. If you have Vanguard funds, for example, you can search “Vanguard preliminary year-end distributions”. The list will show the projected capital gain distribution per share for each fund and the percentage of NAV (net asset value). It also lists the “ex-dividend date”. You need to sell by that date to avoid the distribution.

Vanguard, American Funds, Janus, etc. all list their projected distributions on their website. Another source for preliminary distributions is CapGainsValet. This site was started by a fee-only advisor and it includes a free search tool.

Create a spreadsheet with every fund you hold in taxable (non-retirement) accounts.
Go to the fund’s website or CapGainsValet to look up the projected capital gain distribution.
Calculate the dollar amount of the distribution given the value you have in the fund or the number of shares.

Just because you can sell the fund to avoid the gain, doesn’t mean you should.

When you sell, you may be avoiding the capital gain distribution, but you still have to pay tax on the realized capital gain. It would not make sense, for example, to sell a fund every year before the distribution and re-purchase it after the distribution because of the transaction fees, capital gains, and wash-sale issues. If you are holding a fund that you want to hold long-term, look up the capital gain distribution to prepare for your tax bill, but don’t sell.

Here is a situation where you may be a good candidate for selling before the ex-div date:

You have a taxable account with active funds. You are transitioning to index funds that have lower turnover and lower costs. You have been making the transition slowly because you have realized gains and will owe tax when you sell. You determine that one of your active funds is planning to pay a large capital gain distribution this year in December. If you sell, you will move the proceeds into a fund that is not paying a distribution.

In this example, selling to avoid the distribution will save you money in taxes and get you closer to your ideal long-term portfolio of index funds.

Here is an example that I worked through with a client:

JACNX was a mutual fund that was in a taxable account for a client. The client wanted to sell it and move it to a Vanguard index fund. They were slowly transitioning their portfolio from active fund to index funds.
If she sold JACNX, she wanted to move the proceeds to VTSAX. VTSAX was not planning a distribution.
While she would have to pay tax on the sale of JACNX (market value minus cost basis), if she sold before the distribution, she would end up paying less in taxes than if she held onto JACNX.

Make sure that you work with someone who understands tax planning.

You don’t have to worry about capital gain distributions if all of your money is in retirement accounts because those accounts are tax-deferred. And if most of you taxable money is in index funds, you can look up their distributions, but they are likely very small or non-existent because index funds have less turnover than active funds.

Tax planning is an extremely important part of financial planning. Work with an advisor that can help you with investments, but who also has a good handle on the tax implications of your actions (and non-actions). Sign up to learn more about financial and tax topics.

Here is a video I did on this topic if you want to learn more.

Schedule a Call to Learn about Tax Planning Opportunities

originally published 11/12/2020

Linda Rogers 9/19/23 Linda Rogers 9/19/23

Ask Linda: What does "rising yields" mean?

Dear Linda, I keep reading that bond yields are spiking. I am curious about what that means. Is it a good or bad thing?

Dear Linda,

I keep reading that bond yields are spiking. I am curious about what that means. Is it a good or bad thing?

You are correct - this 10-year U.S. Treasury chart shows that yields have spiked recently to a level we haven’t seen since 2007.

A bond’s yield is the return an investor receives on the capital invested.

The Federal Reserve has been raising its benchmark interest rate to try and combat high inflation. This has filtered down to investors in a variety of ways - from higher mortgage and car loans to higher interest rates at your local bank.

Higher interest rates also have an impact on the bond market. When a bond is issued, it is assigned a coupon rate - a fixed percentage the bond will pay out each year. The coupon rate is largely determined by interest rates at the time the bond is issued. Since interest rates are higher, coupon rates on newly issued bonds are also higher.

Are higher yields a good thing?

It depends. Higher yields are just a symptom of other things going on in the market and economy - both of which are complex and likely affect you in different ways. That being said, there are opportunities and drawbacks to be aware of.

Opportunities in higher-yielding environments.

Cash and cash equivalents earn a relatively high return.

After years of earning 0% in your savings account, you can finally get a decent yield - over 4% right now. Don’t assume your money is in a high-yielding account. Check your statement to verify and contact your bank about better options if needed.

Bonds are more appealing to investors.

Investors who hold bonds will see higher income from the portfolio and have the potential to lock in higher-yielding bonds long term.

Cash buyers may be able to grab real estate more easily now.

The real estate market is complicated and still highly competitive, but the lucky few who don’t need a mortgage may have an easier time getting a home now than when mortgage rates were at all-time lows.

Drawbacks with higher-yielding environments.

It is more expensive to borrow.

Borrowing is much more expensive now than in recent years. Taking on debt (and refinancing old debt) is less appealing. Make sure you can afford any debt you acquire.

Bond prices will go down in the short term.

When bond yields go up, bond prices go down. Let’s say a couple of years ago you purchased a bond with a 3% coupon rate. Today, investors can buy a bond with the same characteristics at a 5% coupon rate because interest rates have gone up. If you need to sell your 3% coupon now, you will have to offer it at a discounted price, otherwise, nobody will buy it.

What does this mean? Investors may see unrealized short-term losses on the bonds they hold (assuming they don’t sell and realize the loss), but over the long term, those bonds will mature, reinvest at higher yields, and earn more income than if interest rates remained low over the same time period.

Keep a long-term perspective.

Spiking bond yields are making headlines because it is an important factor - bond yields affect so many things in our market and economy. Instead of trying to predict where everything is headed, focus on what you can control such as keeping debt down, making sure your cash is earning a high yield, and locking in longer-term bonds at higher rates than we have seen in almost two decades.

Linda Rogers 7/27/23 Linda Rogers 7/27/23

Know a teenager working their first summer job? Tell them to do this... [video]

If you have a teenager in your life that is working their first summer job, talk to them about this money strategy.

transcript

If you have a teenager in your life that is working their first summer job, talk to them about this money strategy.

I remember my first summer job and getting that first paycheck. My dad told me to walk down to the local credit union and put half into a Roth IRA. I did it. I didn't fully understand what I was doing, although he probably explained it to me - it just didn't sink in at the time. Of course, now I really appreciate how good that advice was for a couple of reasons.

Why a Roth IRA is a good option for teenagers

First of all, the money that goes into a Roth IRA is after tax.

It grows and is distributed tax-free (if used appropriately). Making that contribution when your income is really low, like when you're a teenager, perhaps the lowest it will be for decades to come, is smart.

Secondly, you're getting started saving early.

You're giving that money more time to compound.

Setting up a Roth IRA

To set up a Roth IRA, you may have to do a custodial Roth IRA, which is the same as a regular Roth IRA, you will just have a parent or other adult be listed as the custodian until the child reaches the age of majority in their state. So let's say they're 18 or 21 and then it will convert to a regular Roth IRA. Not a big deal, just something to be aware of.

The amount you can contribute to a Roth IRA

The amount you can contribute into a Roth IRA is the lesser of $6,500 in 2023 or earned income. So if they just earned $2,000, that is what can go into a Roth. Especially important to remember if you are willing to gift that contribution for the child. I have clients that will say - keep your summer money and I will gift the Roth contribution for you. Great idea. Just make sure that you know how much the child earned.

There are also income limitations to be able to save to a Roth that you yourself may have bumped into when you looked into it. Most teenagers this is not an issue, but you can talk to your tax person if you have any questions.

I will also put in the description below a link to the IRS site that talks more about the Roth IRA and everything you need to know.

https://www.irs.gov/retirement-plans/traditional-and-roth-iras#:~:text=Roth%20IRA,and%202022%20and%202023%20limits).

So find that teenager in your life soon before they spend all their summer earnings, be a tiny bit nosy - just ask what they're doing with it, talk to them about a Roth IRA, and let me know how it goes.

My name is Linda Rogers, Owner of Planning Within Reach.

Linda Rogers 7/25/23 Linda Rogers 7/25/23

Ask Linda: Is it safe to have all of my money at one Brokerage firm?

I remember being told that I shouldn't keep more than $250,000 at one bank since that is the FDIC insurance limit. What about my money at a brokerage institution, such as Schwab, Vanguard, or Fidelity? Should I spread my money out across brokerage firms as well? Should I spread my money out across brokerage firms as well? How do I best keep my money safe?

Dear Linda,

xxx

Protecting your money in the bank versus the brokerage firm are two separate things. Let's review the process for both as well as some real-life identity theft cases that we can all learn from.

How to protect your money in the bank

This includes your checking, savings, money market deposit accounts (MMDAs), and certificates of deposits (CDs).

1) Confirm these accounts are being held at an FDIC-insured bank.

The Federal Deposit Insurance Corporation (FDIC) is an independent US Government agency that protects your deposit accounts if the insured bank fails. Your coverage is automatic as long as your bank is insured by the FDIC.

2) Confirm you are within the coverage limits.

Each "category" of account is covered for the principal plus interest up to $250,000, per bank. For example, if you have an Individual account and a Trust account, they will each be covered for up to $250,000. View the list of categories here or use the FDIC's tool, EDIE. EDIE allows you to enter your bank's name, account categories, and balances to identify any gaps you have in coverage.

The most common reasons I see people exceeding the limit without being aware is an inheritance or house sale. They receive that influx of cash and are exposed while figuring out what to do with the money.

Three banks have failed so far this year, including the high-profile Silicon Valley Bank (SVB) collapse. If it happens to your bank, the FDIC typically pays out the insurance within a few days of the bank closing. You will either be reimbursed with a check or your funds will be moved to a new account at another FDIC-insured bank. As the bank gets liquidated, there may be additional available assets that can be distributed pro-rata to those with accounts in excess of the FDIC insurance limits. These payments, though, are not guaranteed and can take several years to be fully distributed.

How to protect your money in a brokerage firm

This includes cash and securities, such as stocks, bonds, Treasury securities, certificates of deposit, mutual funds, and money market mutual funds.

1) Confirm this money is being held at a registered brokerage firm that is regulated by the SEC and under the supervision of FINRA.

Registered brokerage firms are required to keep customer assets segregated from the firm's assets. Therefore, even if the brokerage firm fails, the customer’s assets are safe. Periodic examinations are conducted to ensure the registered firms are financially sound and that their annual filings are accurate. They are also required to maintain a minimum level of reserves and be a member of the Securities Investor Protection Corporation, which offers SIPC insurance.

2) Confirm you are within the coverage limits.

SIPC insurance is invoked if a brokerage firm shuts down and assets are missing due to theft, fraud, or unauthorized trading. Notably, this is not protection against market loss, being sold worthless securities, or bad advice from a broker. Also, SIPC insurance, just like FDIC insurance, does not come into play unless the brokerage firm is already shutting down and in liquidation mode.

SIPC protection is further limited to $500,000, which includes $250,000 in cash, per account "capacity", per firm. Examples of separate account capacities include an individual account, joint account, IRA, and Roth IRA. A comprehensive list of all capacities can be found here.

Because brokerage firms are required to keep customer assets separate, you do not need to spread out your money across multiple brokerage firms as you do with banks. If your brokerage firm fails, your accounts would remain intact and be transferred to another SIPC-insured firm.

Two Real-Life Money Theft Stories Involving Banks

While being aware of the above information is important, equally important is identity theft prevention. There is a much greater likelihood that you will encounter fraud than a bank failure.

Account Takeover Fraud

We had a client with an old savings account at a bank. She decided to close the account and consolidate it with her other assets in an effort to simplify. Upon arriving at the bank, she learned that someone else took over the account and withdrew the money. She was referred to the bank's fraud department, which originally denied her claim. They stated that she did not check her account frequently enough and should have noticed the missing money. While they eventually approved her claim and restored her account, it was not an easy process.

Unauthorized Transfer Fraud

Another client was one of the many victims of the Equifax hack. Equipped with his social security number, thieves opened a brokerage account at a small online firm in his name and initiated an ACH transaction from his checking account. Similarly, the bank first refused to pay the client back, saying he should have caught it faster. Only after threatening to write about his experience and share it with his online following did the bank make him whole.

Prevention will save you time and money

Do everything you can to make yourself a hard target.

1) Freeze the credit for everyone in your household. This prevents anyone from opening an account or buying a home in your name.

2) Ensure 2-step verification is set up for all of your accounts.

3) Check your statements every month. From what I was told from both victims above, catching the transaction within 30 days makes it much easier to get your money back.

4) Follow a security expert. I am not a security expert and the landscape continues to evolve. I get a lot of my information from Brian Krebs and his blog. Check him out or find one you prefer to make sure you are doing everything possible to keep your money safe.

originally published 6/19/2018

"Ask Linda" is a periodic post where the founder of Planning Within Reach, LLC, Linda Rogers, picks one question from her readers and publishes a detailed answer with the hope that it may benefit others. If you would like to ask Linda a question, email linda@planningwithinreach. For advice on your personal situation, schedule an initial call to learn about our services.

Linda Rogers 6/9/23 Linda Rogers 6/9/23

Looking to upgrade your EV charger? Don't forget about this tax credit. [video]

The EV charger federal tax credit is back.

transcript, condensed for clarity

The EV charger federal tax credit is back.

It was set to expire at the end of 2022, but the Inflation Reduction Act extended it another 10 years through 2032. So if you recently got an EV and you're looking to upgrade your charger, this could save you some cash.

EV charger federal tax credit amount

You can take a credit for up to 30% of the hardware and installation. It's a one-time credit, non-refundable, and up to $1,000.

How to obtain the credit

If you're doing your own taxes, the form you'll be completing is Form 8911, so you might want to review that form or at least read the instructions, which I link here. The instructions are helpful to just make sure that you meet all the requirements to be able to take the credit.

The steps are easy.

#1 Buy a Level 2 charger.

#2 Contact an electrician to install the charger.

#3 Save the receipts for both the charger and installation.

#4. Send the receipts to your tax person or file it with your other tax records so you don't forget about it.

#5 Check with your state and local energy company to see if they offer any additional incentives as well. For example, my local energy company offers an additional $125 rebate, so not insignificant, and definitely worth your time to look into.

My name is Linda Rogers, Owner of Planning Within Reach.

Linda Rogers 5/10/23 Linda Rogers 5/10/23

The Stock Market and the Economy are Related, but not the Same

The stock market had a rough 2022 with the S&P losing close to 20%. While the stock market and the economy are related and often discussed together, they are not the same thing.

The stock market had a rough 2022 with the S&P 500 losing close to 20%. While the stock market and the economy are related and often discussed together, they are not the same thing.

The Stock Market versus The Economy

A stock market is an exchange where participants can buy and sell shares of public companies. Markets are forward-looking - shares are valued based on how they are expected to perform in the future.

The economy is everything related to the production, consumption, and trade of goods and services. To measure the health of the economy, we look at unemployment claims, inflation, new home construction, gross domestic product (GDP), etc. Economic data is backward-looking - the newly released numbers tell us what happened during a previous time period.

When are we in a recession?

One of my favorite podcasts is NPR’s ‘Planet Money’ and I love this episode where they talk to a past committee member of the National Bureau of Economic Research (NBER), which is the organization that defines business cycles. Most of us know the definition of a recession as 2 consecutive quarters of declining GDP, but in reality, the NBER makes the official call and they take more of a holistic view. They look at GDP but also a variety of other economic factors to make the determination.

How the stock market behaves during a recession.

The stock market typically has negative returns at the beginning of a recession and recovers months before it is over. According to this Forbes article: “In almost every case, the S&P 500 has bottomed out roughly four months before the end of a recession.”

For a visual, this chart shows the S&P 500’s relationship with Bear Markets and it is apparent that yes, the forward-looking stock market tends to recover before the bear market is complete.

What should an investor do when the risk of a recession rises?

There is talk of a recession in the coming months. Whether that comes to fruition or not, the plan is the same.

Stick with your investment strategy and don’t try and time the market regardless of what is going on with the stock market or the economy.
If you are still working, confirm that you have an adequate emergency fund in a high-yield, liquid account in the event you lose your job or face reduced income.
Consider meeting with a financial planner to get a solid financial and investment strategy in place.

Linda Rogers 3/31/23 Linda Rogers 3/31/23

What to do with your Old Employer Plans [video]

So you've moved jobs a few times, you have a bunch of old employer plans, and you don't know what to do with them. Here are your options.

transcript, condensed for clarity

So you've moved jobs a few times, you have a bunch of old employer plans, and you don't know what to do with them.

Here are your options:

#1 - You can keep the money where it is if it meets certain balance requirements.

#2 - You can roll it over to a different type of account, such as an IRA.

#3 - You could potentially roll it over to your new employer's 401K plan if they allow for that, or

#4 - You could cash it out, but there would (likely) be tax consequences for doing that.

If you have a bunch of plans, it can be confusing and overwhelming. This is how you get started evaluating which of those options is best for you

Step 1 - Grab the statements for all of those old employer plans and open up an Excel spreadsheet.

Make a list of all the accounts that you have, the names, and the type. It's really important you confirm the type. Sometimes I've had it where clients think they have a certain type of account, but they actually have a different type. You want to confirm, yes, it is a 401k, 457, 403b, Simple IRA, whatever it is, to make sure you are clear on that.

Step 2 - Look at the holdings within the account and document the expense ratio.

These are the fees that are associated with the holdings. I'm going to link in the description below a video on how to do this. Next, you want to look at the plan fees. So an employer plan typically also has admin fees, asset-based fees, and maybe even management fees. So document those. We want to get a picture of what having that account is costing you.

Step 3 - Look at the IRS Rollover Chart, which I will link in the description below.

I love this chart because it shows you the type, each type of retirement plan account, and where you can move it into. And it tells you the tax consequences for doing that. And it also tells you if, for example, you need to wait 2 years before you can roll this account over. So it's just a good double-check to be clear on what your options are. And this is also why it's really important to know what type of account you actually have.

Step 4 - Come up with a plan to simplify.

Maybe you've decided to move everything into an IRA rollover. I recommend diagramming out what you have and where it's going. I just do something like this, where I list all of the accounts. One is staying and these three are moving to an IRA - just to be able to keep track of what's happening. When money starts moving, it's a great way to confirm, yes, it got there. Once it's where it is going to be - in its new home, confirm that the asset allocation is as you want it.

Reach out to a fee-only advisor if you need help.

Any of these steps they can help you with. They can also help you just confirm that, yes, it makes sense to move it, or maybe there's a compelling reason to keep it, such as net unrealized appreciation or the age 55 exception. So there are important factors to consider before moving any money.

Reach out with any questions. My name is Linda Rogers, Owner of Planning Within Reach.

Linda Rogers 3/31/23 Linda Rogers 3/31/23

4 Pictures for when Markets Start Swinging

The stock market is cyclical and subject to periods of volatility. While being told to ‘stick with your long-term investment strategy’ is simple advice, it isn’t always easy. I love incorporating these 4 pictures into meetings – here’s why.

#1 - Your emotional response to market volatility is normal.

Nobody is hesitant to invest when the stock market is at record highs (the gold bar). I wish I could say the same about the bottom (the green bar). By the time you tell yourself “this time is different” and swear off the stock market forever – the painful recalibration is likely almost over.

#2 – Being out of the market for just a few days can significantly lower your long-term performance.

We all know someone who sold out of the stock market during the 2007-2008 financial crisis. They sold and perhaps watched the market go down a little further, patting themselves on the back for a well-timed move. The reality is, even if they guessed perfectly on the way down, they didn’t guess perfectly on the way up. The days you are waiting on the sidelines will seriously cost you.

#3 - Build a resilient, well-diversified portfolio to reduce volatility and risk.

Source: Bloomberg, FactSet, MSCI, NAREIT, Russell, Standard & Poor’s, J.P. Morgan Asset Management. *Guide to the Markets – U.S. Data are as of February 28, 2023.*

We can’t predict which asset classes will outperform in a given year. An asset class that is at the bottom of the chart one year could be at the top the next. Build a portfolio that includes a variety of asset classes and stick with it long-term or until your goals change.

#4 - Recessions are a lot shorter than bull runs. It just doesn’t feel that way.

For the period 4/29/1942 - 12/30/2022, the average bear market lasted 11.3 months with an average cumulative loss of -31.3%. The average bull market lasted 4.4 years with an average cumulative total return of 155.7%. Some periods of volatility that were front-page newsworthy look like tiny blips when you zoom out and put the numbers in perspective.

What pictures and graphs help you make smart investment decisions through periods of volatility?

Send me an email and share your favorite chart.

Originally published 9/2/2015