Have you ever noticed the auto-fill feature in a Google search? You start typing your search and Google tries to predict what you're looking for and attempts to save you some keystrokes by filling it in. When typing "planning for", the search engine prompts me with:
... retirement ... a baby ... the future ... burial
What an odd mix! "Planning for retirement" yielded about 15mil results but there were 602mil for "the future" and 128mil for "a baby". "Burial" had less than 1mil, but that's understandable, right?
As I've written in recent weeks, being diversified with your investments is often hard to do but it's incredibly important. The reason is that diversification helps us to not get caught off guard by the inevitable shifts of the stock market.
The VIX, an index referred to as the stock market's "fear gauge", is at a very low level. The index is based on options trading and is meant to provide a real-time look at how investors think about market volatility over the next month or so. A low VIX means investors are anticipating a smooth road ahead. This, of course, can turn on a dime and often leads to sudden jarring bumps of volatility that can spook unprepared investors. Continued low VIX levels can also indicate complacency.
While many of you have already filed your tax return, today marks the real deadline for 2017 unless you're filing an extension. Tax returns are typically due on April 15th, which has been true since 1955. Prior to that it was March 15th and before that, March 1st. When the 15th falls on a weekend, "Tax Day" is the following business day. This is usually a Monday except that this year Monday was a D.C. holiday, Emancipation Day, celebrating Lincoln's freeing of local slaves in 1862 which ultimately led to his Emancipation Proclamation.
Sell in May and go away. Have you ever heard that market maxim? An old saying believed to stem from British aristocrats who fled the summer heat of London, "Sell in May" is a popular adage. Investors should sell at the end of April and then buy back their investments in the Fall, or so the saying goes.
The idea is to skip the stock market's summer doldrums, when traders, just like the aristocrats before them, leave town for long vacations and presumably lose interest in investing. This lack of attention slows things down a bit, often leading to flat markets during the summer.
May you live in interesting times. That's the saying sometimes known as the "Chinese curse" and it's often repeated these days with the required hint of irony. Whether it's politics at home or abroad, geopolitics and warmongering, globalism versus nationalism, possible government shutdowns, or how the stock and bond markets react to it all, these certainly are interesting times.
When we think about the American Dream, visions of prosperity and social mobility through hard work, smarts, and determination are often wrapped by a picket fence. For many, owning a home is the ultimate symbol of success. This makes sense because home ownership implies self-determination, a bedrock principle of American idealism.
But is owning a home right for everyone? And, more specifically to the financial planning world, is a home an investment like stocks and bonds, or something else entirely? Is it just shelter? Is it a safe asset or is it risky? What role does it play in your personal balance sheet as times goes by and debt turns into equity? How do you access the equity once it's there? How does owning rental real estate factor in? The list of planning questions is long.
