A | A | A

label1 label2

Lauren's Blog

Lauren’s blog covers topics that impact your finances, your family, and your future. Is there a topic you’d like Lauren to tackle? We’d love your suggestions and feedback.

In Your Best Interest: Our Winter 2018 Newsletter

Click here to view the full newsletter, including recent news, important dates, financial tips & tools, and more.


MARKET HIGHLIGHTS: Q4 2017

If we looked only at the numbers, 2017 was golden. The stock market hit an incredible 71 new highs this year (no, that is not a typo!) and closed the year up 21% on average. The S&P index gained 19%, the Dow Jones index of 30 stocks gained 25%, and the tech-heavy NASDAQ gained 28%. For investors, it was a year to celebrate. 

 

There was lots of other good news as well. Congress tried—and failed—to repeal the ACA, ensuring continued healthcare access for millions of Americans. If anything, the publicity around the repeal helped increase enrollment, with December enrollment breaking records and beating all expectations. The labor market added 2 million new jobs, the Federal Reserve raised interest rates three times during the year (a sign of a strong economy), GDP increased to an annual growth rate of 3.2%, and demand for new housing remained strong.

On the less favorable side, the US trade deficit increased (something that will only get worse under the new tax plan) and inflation rates remained below the Federal Reserve’s target rate of 2%. Today, there seems to be one question on everyone’s lips: How long will this market last? 

By now, most of us have invested our funds in the market. And as the numbers continue to climb, it’s easy to fall into the trap of trying to “play the market.” Instead, I urge you to stick to your long-term flight plan and accept that the market cycle will work through any volatility. Strong corporate profits, low interest rates, and positive investor sentiment provide good tailwinds, although rich valuations could provide a headwind. In this environment, your best option is to invest strategically and focus on your personal balance sheet, paying close attention to your cash and debts. Be sure you have cash reserves to insulate you from being a forced seller in a down market, and reduce your debt and other fixed obligations. Doing so will put you in position to face the future with confidence—no matter which way the winds blow in the year ahead. 

 

Continue reading
735 Hits
0 Comments

In Your Best Interest: Our Summer 2017 Newsletter

Click here to view the full newsletter, including recent news, important dates, financial tips & tools, and more.


MARKET HIGHLIGHTS: Q2 2017

 

“Global Stocks Post Strongest First Half in Years, Worry Investors.” That Wall Street Journal headline from the last day of Q2 caused more than a few investors (perhaps you included) to ponder “what’s next?” 

As we closed out the first half of the year, most indices were continuing to rise at a pace we haven’t seen since 2009. Despite certain political and global events that would have dampened investor exuberance in “the old days,” investors have been nothing but enthusiastic, and the economic data has certainly supported that fervor. Tumbling oil prices have driven down energy prices and inflation. The housing market seems to be gaining steam. And while growth in the GDP, inflation, and consumer spending has slowed, they are still showing modest increases. All of that, plus expected tax cuts, strong corporate balance sheets, and central bank support, seems to have outweighed any negative news and buoyed both the US and Global indices. The result: the Dow, NASDAQ, and S&P 500 are up 8.03%, 14.07%, and 8.24% respectively; and the Global Dow is up 9.54%. That strong economy spurred The Federal Reserve Bank to raise the Federal Funds rate another 1/4 point. 

So what can investors do to assuage their worries about the future? Jason Zweig’s interview with Peter L. Bernstein offers some answers. In the interview (which took place years before the Great Recession) Zweig asks: How can investors avoid being shocked, or at least reduce the risk of overreacting to a surprise? Bernstein responded with this wisdom: 

“Understanding that we do not know the future is such a simple statement, but it’s so important,” he said. “Survival is the only road to riches… I view diversification not only as a survival strategy but as an aggressive strategy because the next windfall might come from a surprising place. I want to make sure I’m exposed to it. Somebody once said that if you’re comfortable with everything you own, you’re not diversified.” 

Berstein then posed this question to investors: “Can you manage yourself in a bubble, and can you manage yourself on the other side?” 

I’m happy to say that our approach is consistent with Bernstein’s Yoda-like guidance. We continue to actively diversify our client portfolios, reallocating fixed income with international and global bonds, inflation-protected securities, and real estate. “Survival is the only road to riches.” And while no one knows what the future holds, we promise not to overreact—no matter what surprises come our way. ~

Continue reading
1344 Hits
0 Comments

In Your Best Interest: Our Q1 2016 Newsletter

Click here to view the full newsletter, including recent news, important dates, financial tips & tools, and more.

Market Highlights: Q1 2016

There are two distinct ways to partricipate in the stock market: speculating and investing. Speculators get paid when they sell something to someone else for more than they paid. Speculation involves trading and can deliver dramatic wins and losses. It is a zero sum game because for every buyer there is a seller on the other side of the trade. Investing, on the other hand, is rooted in economic fundamentals and analysis. Investors get paid when companies pay ever-growing dividends that are reinvested and compounded. Investing leverages lower-risk investments to deliver more predictable, consistent returns.

My goal is to invest, grow, and protect your assets. And while speculation is best left to those with a bigger risk appetities, every quarter I must act like a speculator and deliver the current “weather forecast.” But I do so with a caveat. Why? Because in investing, the short-term forecast doesn’t matter. Just like the laws of physics keep the world spinning, the laws of capitalism and economics (and the “miracle of compounding”) reward investors—no matter what the “weather.” The forecast may be wrong about tomorrow’s “big storm,” but surely spring will become summer.

That said, the first quarter of 2016 didn’t include any major storms (even if the seas weren’t entirely calm). The S&P 500 and the Dow Jones Industrial Index eeked out gains of .77% and 1.49% respectively after a late rally. NASDAQ tech stocks, international stocks, and smaller US company indexes all declined slightly, simply because supply is outpacing demand. 

The Federal Reserve’s March report delivered a snapshot of the current economy. It observed many positives: strong job gains and lower unemployment, rising household spending fueled by declines in oil prices, advancing business investminvestments, and slow but steady recovery in the housing sector. On the (slightly) down side, the strong US dollar has weakened exports, and inflation is below the Fed’s 2% target. In reponse, Yellen and the Fed chose to hold off on raising interest rates—a move they hope will encourage the desired upswing in inflation and work force participation.

There was also a variety of non-financial, but signficant global events that may impact the econonomic outlook. President Obama visited Cuba and announced a plan to open trade and tourism with the US. The Presidential campaign veered into the cult of personality, emotion, and violence. Millions of Syrian refugees fled their homes to escape civil war only to be denied refuge and a safe home for their families. Terrorist attacks shook the world again in Ivory Coast, Belgium, Pakistan, Iraq, and Turkey. And orders for the new Tesla 3 are beating all expectations as consumers strive to reduce their carbon footprints.

No quarterly market update would be complete without a forecast, so here it is: Expect longer days, rising temperatires, and a few storms and droughts. Just as predictably, stock prices will fluctuate, speculators will trade, and techonology will amaze us. Enjoy the change in the seasons and be a patient and confident investor!

Questions or concerns? Send me a note. As always, I’m here to help. 

 
Continue reading
2903 Hits
0 Comments

Index

Contact Us

4299 MacArthur Boulevard
Suite 100
Newport Beach, CA 92660
Phone: 949-477-4990
Fax: 714-464-4481
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Directions

Disclosure

All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >