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Yes, there are good things about being older, such as increased happiness, less stress, better marriages and deeper friendships.
I’m in my early 60s and when my 20-something children tell me I’m getting old, my now familiar response to them has become, “Yes, that’s the plan!” While it seems true that what was defined as “old” as little as 20 years ago might not seem “old” now; regardless of our definition, though, we’re going to be slowing down physically. What is important to remember, though, is that our expenses don’t necessarily slow down with us. One of the biggest threats to a retirement nest egg, besides the possibility of outliving it, is the high cost of care for increasing health needs. Things Get Better With Age An article in Consumer Reports on Health found there are some things that actually get better with age: 1. You get wiser. Research conducted by the Universities of Texas and Michigan found that significantly more older people ranked in the top 20% in wisdom performance, and the group with an average age of 65 consistently outperformed younger participants. Maybe there's some truth to the joke about parents seeming to get smarter as their kids get older. 2. You have fewer difficult emotions. A Gallup survey found that people in their 70s and 80s reported less stress, worry, and anger than younger respondents. Stress peaks at age 25 and steadily declines, dropping rapidly from 60 to 73. Perhaps we have something to look forward to! 3. You become happier. A study by Stanford and Tufts University professors said that aging is associated with increased emotional well-being. 4. Your marriage gets better. The Journal of Social and Personal Relationships found that older couples experience greater satisfaction and positive experiences with each other. The report also says happily married older people have better health, quality of life, and relationships with their children and friends. This may well be a case of what statisticians call selection bias, as perhaps only the better marriages actually last into old age these days; but it does give one something to think about. 5. Your relationships get deeper and richer. While younger people have more friends, the quality of older people's relationships becomes richer. A study done by Case Western Reserve University found that volunteering was the most consistent predictor of cognitive well-being in people over age 72. Consult Your Team While there can be much to enjoy about a long(er) life, one key to keeping it as financially secure as possible is to keep in contact with your financial advisory team. Just like your physician and other medical experts can help keep your body working at its best (for its age), so too can your financial advisor and their team help you enjoy the security that can contribute to some of that less stressful living that awaits you! Please feel free to contact us at Grey Ledge Advisors if you think we can help you in any way.
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Since the beginning of the year, economists and pundits seem united in the belief that continuing tight labor markets, supply chain issues and outright shortages of certain products will continue propelling inflation and interest rates to levels that we haven't seen in years.
But higher rates and inflation portend peril for bonds and for stocks with high dividend yields. The yield on the 10-year Treasury bond soared from less than 1.0% in the summer of 2021 to close to 3.4% in mid-September 2022, causing the bond's price to drop. But who would blame you if you’re not a fan of Treasury bonds? Although they're very safe from a credit-quality perspective, they still pay too little and are highly vulnerable to rising rates, as their recent performance shows. Over in the stock market, the highest yielding stocks have lagged, as all other sectors not named Energy have as well. But are you selling your dividend payers and locating better alternatives? Remember this: dividend-paying stocks can reduce your overall volatility as dividends can often offset price declines. What Makes Dividends Attractive Why can dividend-paying stocks help reduce volatility and offset price declines? Well, consider that according to the Stock Trader’s Almanac, since 1945 reinvested dividends have contributed 33% of the total return in the S&P 500. In other words, maybe you could improve your performance by a third without doing a thing. You might also already own a lot of dividend-paying stocks too. Did you know that about 80% of the companies in the S&P 500 – that’s 400 companies – already pay some form of dividends? In fact, the current yield as of mid-September on the S&P 500 is 1.69% (in August the S&P 500’s yield was 1.37%). Other places to consider looking for dividends include utilities and REITs, which have historically (as a group) paid dividends. Remember, REITs must distribute at least 90% of their taxable income to shareholders as dividends. Perhaps the best recipe for the year ahead will be to mix growth with income. Finally, let’s not forget the power of compounding. As Ben Franklin famously said, "Money makes money. And the money that money makes, makes money." Your estate planning process involves a team consisting of your attorney, your Grey Ledge advisor, perhaps an insurance professional, and you. Whether you are establishing a new estate plan or revising an existing one, only you can provide the guidance, direction, and information your estate planning team needs to develop an effective plan.
Most estate planning efforts begin with a questionnaire and an asset inventory. Although the process may seem cumbersome, the more complete the information you provide, the better equipped we will be to help you achieve your goals. Even questions that seem intrusive at first have specific purposes. Following are some examples of the kinds of estate planning information you may be asked to provide: Assets and Liabilities. A list of your assets, their estimated net value, and documentation of the form of ownership (individual, joint tenancy, tenancy by the entirety, and other forms of co-ownership). You will also need to identify your liabilities and those of your spouse. If you live, or have ever lived, in a community property state, you will need to provide information to separate your individual and community property and to determine who is responsible for the management and control of community property. Family and Other Beneficiaries. The names, ages, relationships, and special needs of family members and other beneficiaries. A copy of property settlements, other financial agreements, and court decrees from any prior marriages of both you and your spouse. Existing Estate Plans. A copy of your current will, along with information on any contractual or legal restrictions on the disposition of your assets. In addition, documentation of survivorship provisions and beneficiary designations on insurance policies, retirement plans, employee benefit plans, business buy-sell agreements, and other such assets. Health Status. Information on your current health status and that of your beneficiaries. Also, the average life spans of your ancestors and their ages at death. Objectives and Purposes. Your objectives, purposes, and hopes for yourself and each beneficiary, along with an assessment of each beneficiary’s ability to manage money. Benefits of Team Work Once fully informed, your team can assist you in several important ways. We can: 1) Analyze your assets to determine which you should dispose of during your lifetime, which you should retain, and whether any special expertise may be required to value and dispose of your assets; 2) Identify which assets may be subject to probate and estate taxes and estimate the potential shrinkage due to these costs; 3) Estimate and plan for the liquidity (cash) needs of your estate, your surviving spouse, and other family members and beneficiaries (for instance, cash may be needed to help cover estate taxes, probate costs, or for income replacement); and 4) Guide you in selecting the best domicile—assuming you have a choice—to help reduce the net effect of taxes on your estate. No Plan is Final Bear in mind that no estate plan is permanent. Marriages, remarriages, births, deaths, new employee benefits, and legislative changes may all necessitate adjusting an existing plan or creating a new one. Also, the composition of your assets may change over time. You can keep your estate plan up-to-date by notifying us of any relevant changes as they occur, and by responding when you are alerted to legislative changes that may affect your current estate plan. How do you get started? Call your Grey Ledge advisor and we will work with you to ensure that your final future, and that of your beneficiaries’, is aligned with your wishes. Brian Scott-Smith talks to GLA's Senior Vice President Scott Albraccio about saving your retirement. They discuss what products are out there and why we ALL need to be taking retirement saving more seriously. Plus, they take a look at other stories making the headlines from around the region.
Click this link to watch the interview: https://www.youtube.com/watch?v=g2UXn4MLxz8 Brant Walker, Chief Investment Strategist 10/1/2022
Grey Ledge Advisors Fixed Income Market: What We’re Seeing: The U.S. Federal Reserve (the Fed) continues to increase short term interest rates in 2022 to quell inflation. High inflation reduces purchasing power as prices of goods and services continue to rise. High quality, short term fixed income instruments (CD’s, Treasury bonds) can now be purchased with yields of 4% or higher. The Fed is telegraphing further rate increases in 2022 and early 2023 until inflation drops to a range of 2% to 3%. Long term interest rates have not increased in tandem with short term rates as the market believes an economic recession is likely to occur between now and early 2023. If such is the case, long term interest rates would likely drop from current levels as demand for goods and services decreases and the unemployment rate increases. What We’re Doing: As such, Grey Ledge Advisors is shifting some of our fixed income holdings from short term instruments to longer term instruments. This will lock in current yields and allow for price appreciation in the longer-term instruments should a recession occur, causing longer-term interest rates decline. Equity market: What We’re Seeing: The S&P 500 stock index is firmly in bear market territory closing in on a 25% peak to trough decline as of October 1st. Much of this downward movement is based on the interest rate scenario discussed above. Simply put, when interest rates rise, the future value of corporate earnings and dividends diminishes. The fear of a possible economic recession is weighing heavily as well as recessions temporarily reduce a corporation’s earnings power. Grey Ledge’s focus on high quality investments has acted as a ballast in many portfolios and we would expect this to continue should the stock market continue to struggle. At the same time, many high- quality companies in more cyclical industries, think technology and consumer discretionary companies, have seen their stocks decline by 50% or higher since late last year. What We’re Doing: We will be looking to shift, on the margin, away from some of the stable earning companies (food and beverage, health care, etc.) that have held value relatively well in favor of more cyclical companies in the technology and consumer discretionary sectors. Our focus will continue to be on the highest quality companies when making any tactical changes. If you would like to learn more about our rotation to the Tech Sector, please listen to our latest Thoughts from The Ledge podcast https://www.greyledge.com/podcast.html RAMP Conservative Portfolio
The conservative portfolio is the most risk averse of the four RAMP platforms. The asset allocation approximates 55% fixed income, 40% common stocks and 5% gold. The year-to-date total return for the portfolio is minus 10.6%. The S&P 500 stock index is down 21% this year and the Barclay’s aggregate bond index (a high- quality bond index owning bonds maturing from five to ten years) is down 11%. The RAMP conservative portfolio has fared slightly better than the Barclay’s aggregate index despite having 40% in common stocks. Due to the conservative nature of this portfolio, close to 40% of the portfolio is invested in utility stocks, gold, consumer staples stocks and short- term high quality bonds. These have all buttressed the portfolio having negative returns in the single digits as opposed to the -11% return of the Barclay’s bond index and the -21% return of the S&P 500. RAMP Balanced Portfolio The balanced portfolio takes a further step out on the risk spectrum with an allocation of 60% common stocks and 40% fixed income. The year-to-date return for the portfolio is minus 12.7%. This makes sense as the balanced portfolio is more exposed to equities compared to the conservative portfolio. A 60% common stock / 40% fixed income portfolio could be expected to be down closer to 17% based on the numbers stated above for the markets. The balanced portfolio has also benefited from a weighting of 25% in utility stocks, consumer staples stocks and short- term bonds. These areas have held value well and helped insulate the portfolio, to some degree. RAMP Growth Portfolio The growth portfolio further steps out on the risk spectrum having essentially 100% of the portfolio invested in common stocks. The portfolio is well diversified having exposure to US large company stocks, mid cap stocks, small cap stocks, International developed stocks and emerging markets stocks. The year-to-date return for the portfolio is minus 18.4%. Mentioned earlier was that the S&P 500 stock index is down 21% this year and the growth portfolio has fared somewhat better. Exposure to emerging market stocks, clean energy stocks and large cap US value stocks has buffered the return compared to the S&P 500. These same areas underperformed in 2021 and are showing some improvement in 2022. RAMP Aggressive Portfolio The aggressive portfolio is also invested in 100% common stocks, but the weightings differ somewhat from the growth portfolio. The aggressive portfolio is down 17.6% this year, which is slightly better than the growth portfolio due, perversely, to a higher weighting in the more volatile sectors. We would generally expect the aggressive portfolio to be down in value somewhat more than the growth portfolio in a market environment similar to 2022. However, the more volatile sectors performed relatively poorly in 2021 and thus far in 2022 have held up relatively well. Financial markets around the world closed out the first half of the year with the weakest investment performance witnessed in decades. The combination of rising interest rates and persistently high inflation has been a sharp turn- around from record low interest rates and mild inflation present just over two years ago when Covid 19 first set in. In retrospect, the massive amount of liquidity the Federal Reserve injected into the economy post Covid stoked demand in an environment where supply chains were becoming disrupted. Companies and factories were struggling to keep up with demand, and in many cases continue to do so. The US stock market, as measured by the S&P 500 index, is down 21% through June 30. Normally, when stocks sink to such a degree, fixed income investments (high quality bonds) come to the rescue and provide ballast to diversified portfolios. Such is not the case this year as high quality, intermediate term bonds (those maturing in five to ten years) are down 11%.
The Federal Reserve’s quest to tame inflation via short term interest rate increases has contributed to the double digit decline in bond prices. There have been few places to hide. Looking ahead to the second half of the year we can expect more volatility as the tug of war between inflation, interest rates and economic growth plays out. The Federal Reserve will play an important role in the back half of the year as commentary from the Fed has become more hawkish regarding fighting inflation. Fed Chairman Jay Powell has recently altered the Fed’s script from “inflation is likely transitory”, to “we would like to lower inflation without creating an economic recession and higher unemployment” to “we need to get inflation under control”. Grey Ledge Advisor’s rigorous investment approach and bias toward high quality stocks and bonds acts to provide a buffer when conditions are challenging. The stock market decline year-to-date has affected just about every sector of the market. Many stocks in the technology area have been decimated with declines in value of 50% to 80%. Many of these companies came public in the past few years and soared in price mainly based on speculation and the massive amount of liquidity created by the Federal Reserve that was looking for a home. Grey Ledge largely avoided these investments, preferring to rely on proven companies having long track records, consistent earnings streams, and high levels of profitability. As in past economic and market cycles over the decades, high quality investments transcend the near- term challenges and come out the other side intact, increasing earnings and paying cash dividends as they have for decades. We expect this to be the case again in the cycle. Please reach out to your advisor or any of the staff here at Grey Ledge Advisors should you like to have further discussion regarding your portfolio(s). Brant Walker, Chief Investment Strategist Brant Walker, our Chief Investment Strategist addresses the market fluctuation January has brought to investors. As this note is being penned, the stock market, as defined as both the S&P 500 index and NASDAQ composite index, has entered “correction” territory, defined as a 10% drop or more from recent highs. The Dow Jones Industrial index was down 1,000 points in early trading on Monday recovered and finished in positive territory. There is a tug of war going on between those who feel interest rates are going to need to be increased faster than the Fed has telegraphed to combat inflation, and the other side of the ledger which believes recent inflation numbers will recede on their own once industrial production gets back to normal and supply chain bottlenecks are resolved. Hence the “tug of war” and intraday volatility in the stock markets. After three solid years of stock market gains averaging over 20% per annum ending calendar year 2021, the markets can be expected to take a rest or experience a correction equal to 10% or more of market value. Looking further back, the NASDAQ index and S&P 500 have logged cumulative gains of 1000% and 585%, respectively, going back to the financial crisis lows of March 2009. The root cause of recent stock market weakness is the potential and telegraphed tightening of momentary policy as laid out in recent missives from the Federal Reserve. Higher than expected inflation has become imbedded in the economy and as a result the Federal Reserve has telegraphed at least three future interest rate increases in increments of .25%. That should not and would not be a shock to the markets or the economy, but several economists and market strategists are suggesting four (or more) interest rate increases may be in the offing to get inflation under control. COVID 19 has produced side effects that the economy hasn’t seen in recent memory, from production bottlenecks (witness ongoing shortages of various products at grocery stores) to labor shortages to the unwillingness of some individuals to re-enter the workplace for fear of contracting COVID. As a result, inflation, as measured by the consumer price index, is at a level higher than anytime witnessed since the 1980’s. To put things in perspective, recent market losses have brought the NASDAQ and S&P 500 index back to levels they were trading three short months ago in October of 2021. Market corrections are to be expected from time to time and the period from the March 2020 COVID lows to the first of January 2022 witnessed a market that was essentially going straight up. The old adage “markets take the escalator up and the elevator down” seems to apply once again, as unnerving as it may be. Our portfolios are constructed of high-quality securities allowing us to stay the course and stick to long term established client objectives. Please feel free to reach out to your advisor if you have any questions or concerns. Brant Walker, Chief Investment Strategist We believe there are currently five major economic trends reflected in asset prices, about which investors should have an understanding or some perspective. We believe these trends, while discussed in the following letter separately, are intimately related and feed into one another through both intended, and unintended, consequences. Click here to read the entire article
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Categories"Wisdom is not a product of schooling but of the lifetime attempt to acquire it." ~ Albert Einstein |
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NOT A DEPOSIT | NOT FDIC INSURED | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY | NOT GUARANTEED BY THE BANK | MAY GO DOWN IN VALUE
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