Tempted to Make Big Changes in Response to Short-Term Volatility?
Read this First!
Staying the course amid economic turmoil can be a daunting proposition. As markets ebb and flow in response to world events as well as earnings reports and data releases from the Federal Reserve, it can be tempting to divert course away from your long-term objectives and financial planning goals.
What Is GDP?
At a high level, let’s first observe that gross domestic product (GDP) is 70% consumption. Said another way, consumption is simply you and I buying things. These things can be daily routine staples, a new car, or a household appliance, as well as any services and other non-tangible items. Clearly, in order to consume you must have income, or otherwise have the capacity to spend. Fundamentally, inflation erodes that capacity through rising prices that increase faster than your income.
We are furthermore witnessing one of the most visceral supply chain disruptions in economic history – if there was ever a time for a passive, hands-off approach to financial planning or portfolio management, this is certainly not it.
Uncertain Times Underscore the Importance of Retirement Planning and Having a Sound Financial Plan
While the development of a financial roadmap will not negate these concerns, it can help by addressing the question of “What happens if?” What happens if I want to retire early?
For anyone who has not worked with a Financial Advisor, this question has likely crossed their mind at least once. According to Statista,* 65% of Americans in 2020 indicated that they do not work with a Financial Advisor.
Updated October 1st, 2021
I believe that we are at a point of inflection where risks of various types are weighing on the market as we remain relatively near all-time record high levels.
What Are the Main Areas of Risk for the Financial Markets?
Broadly, I would suggest that the three main areas of risk that are of concern today. The following areas of risk will be covered in detail below:
geopolitical risk
economic risk
political risk
Geopolitical Risks:
China’s Trade Tensions
China remains to be a relevant geopolitical concern. Neither the U.S.
Is The Economic Cycle Shifting?
I believe that the most pressing concern on the minds of my clients at the present time is inflation, and the evidence that is beginning to suggest a slowing of economic activity. On Wednesday of last week, Brandon and I had the opportunity to meet Brian Wesbury, the chief economist at First Trust, while attending a half-day seminar here in Birmingham.
As you know, we have been discussing the potential for economic softness since the beginning of the year. Recently, we’ve reviewed many individual metrics that are beginning to show a correlation that reflects the weakness that we anticipated, and I believe this affirms the decisions that we made months ago to significantly reallocate our model portfolios.
Now, you’re beginning to hear the main stream mass media talking about inflation that can no longer be ignored, including rising prices for gasoline, and materials.
We constantly monitor changes in many economic metrics so that we might better understand trends, and this improves our ability to manage investment portfolios to the objectives of our clients. While today’s commentary will be very high level in nature, I would like to encourage everyone to visit my website where I have posted a 28-minute podcast within which I have offered a much deeper discussion.
Seasons Change…
Think of economic cycle changes as the changing of seasons.
PRINTABLE PDF AVAILABLE HERE:
Wealthscape-1099-Instructions Download
FOLLOW THE INSTRUCTIONS BELOW TO PRINT YOUR 2020 TAX DOCUMENTS.
STEP ONE: LOGIN
LOGIN TO WEALTHSCAPE: https://investor.wealthscape.com/ameritas/investor
“What if I don’t have a login?” CLICK> “Register”
Seasons Change
In our last two monthly editorials, we offered a high-level discussion about how economic variables might change under the new federal administration. Among other things, we discussed how a weaker dollar might characterize the coming economic environment, and how it also might create opportunities for investors going forward. Understanding this is crucial as you look at your own financial stability and engage in portfolio management.
Weakening Currency
Newly appointed treasury secretary Janet Yellen has spoken on many occasions in recent weeks about the need for increasingly greater amounts of stimulus. On Monday, Feb.
Keystone Financial Group’s ultimate goal is to help exceed your expectations in the area of financial planning and investing. Working within the parameters that you provide, we seek to eliminate financial inefficiencies, and plot the most suitable route for moving from point “A” to point “B”.
Keystone Financial Group is here for you when you need us. Please feel free to fill out the form for general inquiries concerning our products, support, or help with purchasing our products. Thank you for your interest in our services!
Hours of Operation: 8am-5pm M-F
Phone: (205) 655-7526
Address:
Objective-driven strategies are about the achievement of goals, and not only about making money. This implies a balance of risk with other factors such as tax-advantaged thought, time, and the characteristics of products that may be most suitable for you and the application at hand.
David is a Registered Financial Consultant, Registered Financial Specialist, and Chartered Asset Manager, and is a member of the American Academy of Financial Management. He graduated from The University of Alabama in 1991 with a BS degree in Finance, and began his career with Nowlin and Associates. In July of 2006, David formed The Keystone Financial Group, and relocated his practice to Trussville, Alabama. The focal point of David’s practice is the design of both qualified and non-qualified retirement strategies for small and medium sized corporations. Other areas of practice include the structuring of retirement income, and estate strategies.
David believes activity to be important within one’s industry and community. He serves the City of Trussville as a member of its Park and Recreation Board, and upon the Advisory Board of the Trussville City Schools Foundation. He coaches youth league basketball, and serves Clearbranch United Methodist Church as its finance committee chairman. He serves Ameritas as a member of its National Field Advisory Committee. David and his family live in Trussville, Alabama. David is a native of Florence, Alabama.
David R. Guttery & Seth Edgil offer products and services using the following business names: Keystone Financial Group – insurance and financial services | Ameritas Investment Company, LLC (AIC), Member FINRA/SIPC – securities and investments | Ameritas Advisory Services, LLC (AAS) – investment advisory services. AIC and AAS are not affiliated with Keystone Financial Group or any other entity mentioned herein.
Products and services are limited to residents of states where the representative is registered. This is not an offer of securities in any jurisdiction, nor is it specifically directed to a resident of any jurisdiction. As with any security, request a prospectus from your representative. Read it carefully before you invest or send money. A representative will contact you to provide requested information. Representatives of AIC and AAS do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.
**Securities and investment advisory services are offered solely through Ameritas Investment Company,LLC (AIC), member FINRA/SIPC.
*** The opinions and views stated in this publication are solely those of David R. Guttery and should not in any way be considered to be an endorsement by Ameritas Investment Company, LLC.
**** AIC, Keystone Financial Group, and KeystoneFinGrp.com are not affiliated. Additional products and services may be available through David Guttery or Keystone Financial Group that are not offered.
Keystone Financial Group’s ultimate goal is to help exceed your expectations in the area of financial planning and investing.
