10 Thoughts on Investments for 2018
From Capital Conversations (Fall 2017) – View Newsletter
As 2017 draws to a close and we look forward to 2018, conventional wisdom suggests that New Year’s resolutions, although made with the best of intentions, will be abandoned as 2018 progresses. But perhaps you’ll find some of these investment thoughts worth the follow-through:
We can help by keeping your focus on those things you can control, rather than fixating on those you cannot. Here are 10 investment basics you can count on:
- If you are working, increase your contribution to your retire-ment plan. Even though a one percent increase sounds like a small amount, over a lifetime of saving and investing, even minimal increases can have a meaningful impact by the time you’re ready to retire. The compounding effect over a long period of time can be significant.
- Even better, if you’re working and receive a raise, increase the contribution to your retirement plan and keep a portion of the raise to boost your take-home cash.
- If you have contributed the maximum to your employer’s retirement plan, contribute any excess to an IRA, either Roth or Traditional. The contribution limits for 2018 have not yet been established, but for 2017 that dollar amount was $5,500 with a catch up contribution of $1,000 for those over age 50.
- If you have reached the contribution limits for your employer’s retirement plan and your IRA, and you are married, think about increasing the contributions to your spouse’s retirement plan or IRA. Even if your spouse does not have earned income, he or she can still contribute to an IRA.
- Pay attention to the costs of the assets in your retirement plan or in your investment portfolio. Costs can be a drag on investment performance, so your analysis should factor in the costs associated with your portfolio.
- Whether or not you are working, establish goals for your investments and reassess those goals regularly. Successful investors establish goals, make plans to achieve their goals, and then stick to the plans. Having a goal to save for retirement, a second home, or college for your kids is an excellent idea. However, in life, needs and circumstances change, and so does your investing acumen. Allowing for and adjusting to changes to your goals and in your investment portfolio should be a part of your financial life.
- Confirm that the asset allocation in your current portfolio is appropriate for your personal risk tolerance. A properly allocated portfolio for an aggressive investor is not appropriate for a conservative growth investor due to differences in the level of risk each is willing to assume. Ensuring that your portfolio is allocated according to your own risk tolerance should be a regular part of your investment review.
- Remain invested throughout the economic cycle. Determining your personal risk tolerance includes accepting risk as part of the investing process. Experienced investors know that the market goes up and down through the economic cycle. Being aware of your personal risk tolerance and confident that your portfolio is allocated accordingly will ensure you remain invested throughout the cycle. It is time in the market that is critical, not timing the market.
- Keep a long-term perspective when investing, regardless of where you are in the investing cycle. Also keep in mind that once you retire, a long-term perspective is still necessary due to longer life expectancies. Social Security has projected the following life expectancies:
- On average, a male reaching age 65 today can expect to live to age 84.3.
- On average, a female reaching age 65 today can expect to live to age 86.6.
- About one in every four 65-year-olds today will live past age 90.
- About one in every ten 65-year-olds today will live past age 95.
- If you are in good health and retire at 55, it is possible to have a 25 to 30 year retirement based on these projections. We have had 25 bull/bear cycles over the past century. Recoveries happen too.
Carefully choose an advisor you trust to work with in order to achieve your financial goals and objectives. That advisor should also be a fiduciary, who has no conflict of interest with you, puts your interests first, and works with you to achieve your goals – like the professionals with REDW Stanley.
As companies evolve, it’s essential that employees understand their company’s history and the vision behind its founding, so that these experiences and values may continue to inform and shape the organization’s future. Virginia (Ginny) Stanley established REDW Stanley Financial Advisors in the late 1990s and has been the guiding force of the company ever since. Recently, Ginny shared her company’s story with current REDW Stanley team members, who have used that information to define a set of principles that will serve to steer a clear course for the company through the present and into the future.
In an earlier newsletter (Spring 2017) we shared REDW Stanley’s Why, How and What messages, as well as our Vision. In this issue, we would like to share our foundational Belief Statements:
- We believe in your well-being.
- We believe in trusted relationships.
- We believe in peace of mind.
- We believe problems can be opportunities.
- We believe in happy families.
- We believe in placing our clients’ interests first.
- We believe in bringing integrity to everything we do.
- We believe your advisors should work for you and no one else.
- We believe in integrity, respect, service, dedication and trust.
- We believe in education for ourselves and our clients.
- We believe in listening and understanding.
- We believe in financial independence.
- We believe in objective and independent counsel.
- We believe in connection and genuine relationships.
- We believe in bringing clarity to a situation.
- We believe in providing advice and service you can trust.
- We believe in your best interest.
- We believe in providing great customer service.
- We believe in a comfortable retirement.
- We believe in managing risk.
- We believe in our relationships.
- We believe in making a difference for you and your family.
- We believe in supporting the community.
- We believe that, by putting our clients first, we add value to the relationship.
- We believe in thinking outside the box to answer our clients’ questions.
- We believe in the value of teams.
- We believe our team can be the cornerstone in our client’s financial lives.
- We believe that, in listening to and understanding our client’s needs, we can provide unique, individualized service.
- We believe an educated client is an empowered client.
- We believe in lifelong learning.
By establishing these beliefs, messages and vision, we at REDW Stanley hold ourselves to a high standard of service for our clients. We may occasionally fall short, but we do have the expectation that each of us will do our very best for our clients every day.
- Years ago REDW established the Sanford Rogoff Memorial Scholarship in honor of our founder, and in support of promising college students who are committed to entering into the practice of public accounting in the state of New Mexico. This year, the NM Society of CPAs has awarded the prize to two deserving students: Christina Solaequi (NMSU) and Katia Gomez (ENMU).Please join us in congratulating these deserving young women!
- While airlines may have hoped for improved checkpoint screening as a result of increased fees for checked baggage – totaling $4 billion in 2016 – the higher volume of carry-on bags from passengers trying to avoid fees has made screening more difficult. Source: Wall Street Journal.
- The economic impact of Hurricanes Harvey and Irma are stunning, with estimates of $150 to $180 billion dollars each. While we acknowledge these are large numbers, we are thankful that all of our clients who experienced the direct or subsequent effects of these hurricanes “weathered” the storms with just some or little damage to their homes and properties. Although repairing damage can be a challenge and an inconvenience, hearing from our clients and confirming they were safe was a huge relief to us at REDW Stanley.
Copyright 2017 REDW Stanley Financial Advisors, LLC. All Rights Reserved. This publication is intended for general informational purposes only and should not be construed as investment, financial, tax, or legal advice.