By: Richard Hitchcock CFP® Our earliest memories probably contain some reference to money, how to handle it and some basic ideas on spending. We get these memories from watching our parents live their lives. Subconsciously we pick up clues of which we may not be aware. That’s why it’s important for couples planning to […]
By: Ian M Maddox, CRPS® ENJOY (60+): The Planning Phase Not too many people enjoy paying taxes. Of course, we value the services they provide: schools, fire and police protection, judicial systems and our military. But, since I am as guilty as the next guy or gal, my pen hesitates on that IRS check […]
By: Richard Hitchcock, CFP® (This article is mainly addressed to those in the middle years of their life. What we call the GROW phase.) It’s not uncommon for people in their middle age years to still have debt carried over from college and from their early years of beginning a family. Priorities of life left […]
By: Ian Maddox, CRPS® This may not come as a surprise, but many 20-somethings in the U.S. have not saved a single dime towards future needs. There are many reasons for this, but the simple fact of the matter is that if this trend does not reverse, it could be devastating for an entire generation […]
We have just completed the most contentious presidential election in contemporary history. Thank goodness it’s over (I know you agree)! Whether you were pleased with the outcome, devastated or somewhere in between, we have begun a new era with Mr. Trump at the helm. Yet to be determined are the actual policies this new administration will have success pushing through Congress, and the subsequent impact of those policies in shaping our nation, state and community.
As Financial Advisors, our task is to help guide clients through various financial and investment decisions. For that reason, policies with economic impact are of greatest concern. The question to ask is whether the president of the United States has all that much impact on the economy. In reality, the influence of presidential action and policy is often delayed and difficult to define.
There are certainly examples of presidents taking economic action with immediate impact. A recent and real example of these types of actions was experienced during the extreme economic downturn of 2007-2009. Sweeping financial and industry bail-outs during those years, along with a highly accommodative interest rate policy, laid a foundation which provided economic stability when it was needed most. To a lesser extent, presidential action facilitated an economic lift after the “Dot Com” bubble burst in the early 2000’s and again after 9/11. Nearly three-quarters of a century earlier, Presidents Hoover and Roosevelt supported massive legislation in an effort to pull us out of the Great-Depression. These are, however, all unique and isolated events.
Through a broader lens we see that most economic actions taken by a president have much less immediate impact. An excellent example of this would be the substantial economic growth experienced during the Clinton administration. While President Clinton, as any other president would have done, took credit for robust U.S. growth, most economists point to policy that was put in place by President Reagan and continued by President H. W. Bush. It also works in reverse. President George W. Bush oversaw the housing market implosion, but the seeds of that storm were partially laid by his predecessor.
So, in a handful of weeks President Elect Trump will be sworn into office. That’s when the real work begins. It would be prudent for all of us, and in particular those that have been Mr. Trump’s greatest advocates, to remain sober minded and realistic. History proves that after the bluster and exuberance of the election ends, the reality of governing this great nation, including passing legislation, begins literally overnight.
We certainly love the idea of repatriation of corporate dollars back into the U.S. banking system. We also like an intelligently designed infrastructure bill which would put many people back to work. Consumer spending is the largest portion of our economy, and people need jobs. These big idea programs will take time to implement. So in the immediate future, our suggestion is that we remain focused on our financial goals, invest appropriately, avoid speculation and adopt a “wait-and-see” approach. Maintaining discipline in your financial plan may allow you to experience economic growth, whether that growth is now, sometime in the future, based on presidential policy or just good old fashion capitalism.
Ian Maddox is the managing member of Hitchcock Maddox Financial Partners, a comprehensive wealth-management firm founded in 1999. For more information please visit www.retirementcenter.us or call (205) 201-1401.
No strategy, including asset allocation, ensures success or protects against loss. The opinions voiced in this material are for general information only and are not intended to provide specific investment advice or recommendations. All performance referenced is historical and is no guarantee of future results.
By: Ian Maddox, CRPS®
You thought work was complicated? Try retiring. During your working years your financial well-being was tied to your employment: your paycheck, your health insurance, your life insurance. Maybe even your social network and gym membership. Unfortunately, when your employment stops much or all of these benefits disappear. If they do continue, they don’t come cheap. In many ways you are left to fend for yourself. So what do you do? Read more
By: Richard Hitchock, CFP®
In the financial investing world, it is a well known observation that investors rarely match the performance of the market averages, year in and year out. What is little known is why. When it comes to seeing just how well an individual investor actually does—when looking at the effects of investor decisions to buy, sell and switch into and out of various investments over both short and long-term timeframes, it is startling to see that investor behavior is a culprit in below average performance as well as the actual returns of the market averages. Read more
By: Ian Maddox, CRPS™
When it comes to investing, there are countless strategies. Some of these strategies come with fancy names like Arbitrage, Absolute Return, Market Neutral, Active, Passive—the list goes on. Investment professionals and academics often argue the advantage of one approach over another. A particularly heated debate, between two broad strategies, has run for the better part of thirty years: active management versus passive management. Some of our readers might be familiar with this “investment lingo.” However, for the benefit of our entire audience, let’s establish a few definitions. Read more
By Richard Hitchcock
With the current equity markets and bond markets in record high territories, it may be timely to review your current investment strategy.
Let’s say you have been talking with some friends about investing and one of them starts bragging about how much they have made recently in the market. You don’t think much about it until you turn on the TV that night and see that the markets have reached another record high. So you begin thinking that, while you’ve never really thought much about the market, you want your assets to grow like that (took out comma) too. After deliberating awhile, you jump into the market.
By: Ian Maddox, CRPS®
Letting emotions control our financial plans might not yield the outcome we hope for in the long-term. The late Jim Morrison (The Doors) once said, “I think of myself as an intelligent, sensitive human being with the soul of a clown, which always forces me to blow it at the most important moments.” Morrison got it right. One of the things that makes us human—the ability to experience complex emotions—can also be our unraveling. Read more
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