Intelligent Investing helps you understand all your employer options to ensure you make wise and informed decisions, so you know how to rollover your employer retirement plan assets. In addition, you’ll get an array of portfolio planning tools, research and education, so we can design a portfolio that aligns with your retirement goals and your ability and willingness to accept risk. Whether you have a concentrated stock position or a simple 401(k), we minimize financial stress to maximize your life.
How to Prepare for the Solar Eclipse Video
Ever since I was a kid, I’ve been fascinated with astronomy (not astrology–big difference). My neighbors introduced me to the planets and moon’s craters using a telescope on their back porch in Pennsylvania. I used to wake up in the middle of the night to watch meteor showers, took Astronomy as an elective in college, and have even been to a star party. (but that is for another blog). OK, so I’m an official geek. Well, this year is a big year for astronomy. Unless you’ve been hiding under the shadow of a rock (see what I did there), you know a total solar eclipse is coming.
The Great American Total Solar Eclipse
A solar eclipse is when the moon is in between the earth and the sun, and the moon blocks the sun’s rays. The first total solar eclipse visible in the U.S. in nearly four decades is expected to dazzle on Aug. 21, 2017. During the so-called Great American Total Solar Eclipse, the 70-mile-wide shadow cast by the moon will darken skies from Oregon to South Carolina. During most solar eclipses, the moon takes just a “bite” out of the sun — these are called partial solar eclipses. However, the August event will go down as the first total solar eclipse whose path of totality stays completely in the United States since 1776. How patriotic is that?
Historically important eclipse
Ancient cultures tried to understand why the sun temporarily vanished from the sky, so they came up with various reasons for what caused a solar eclipse. Legends surrounding solar eclipses involved mythical figures eating or stealing the sun, and others interpreted the event as a sign of angry or quarreling gods. Though the following story relates to a lunar eclipse which is where the earth’s shadow appears on the moon, it still applies:
Columbus had on board an almanac and upon consulting the book, he noticed the date and the time of an upcoming lunar eclipse. He was able to use this information to his advantage. He requested a meeting that day with the leader and told him that his god was angry with the local people’s treatment of Columbus and his men. Columbus said his god would provide a clear sign of his displeasure by making the rising full moon appear “inflamed with wrath.”
On March 1, 1504, the lunar eclipse and the red moon appeared on schedule, and the indigenous people were frightened.
So what can the solar eclipse teach us about markets?
- There is a Cycle
- The Current Cycle Doesn’t Last Forever
- Don’t Misbehave Emotionally
There is a Cycle
Just as there is a schedule established for the location and time of eclipses, there are business cycles as well. The business cycle consists of four phases:
- Expansion– a period of economic increase or positive growth
- Peak– the highest turning point of a business cycle
- Contraction– a period of economic decline or negative growth
- Trough– the lowest turning point of a business cycle
The Current Cycle Doesn’t Last Forever
Columbus timed the eclipse with his hourglass, and shortly before the totality ended after 48 minutes, he told the frightened indigenous people that they were going to be forgiven. When the moon started to reappear from the shadow of the Earth, he told them that his god had pardoned them. Intelligent investors know that the current phase we are in doesn’t last forever. That doesn’t mean you should try and time the markets, but you should be prudent and be aware of where we are compared to historical averages. A diversified portfolio should be able to weather all phases of the business cycle. That doesn’t mean there won’t be losses, but the eggs shouldn’t be placed all in one basket.
Don’t Misbehave Emotionally
Many economists believe we are in the latter parts of the expansionary phases, while others believe this could be a new floor to new heights. It is important to not be fearful or greedy as we are likely in the mid to late parts of the expansionary phase of the current business cycle in the U.S. Below are some common emotions that people have when they face different market phases. Whatever your viewpoint, be sure to have an accountability partner who can help you weather the storms. Remember that behavioral coaching is one of the most important things an advisor can provide.
Unfortunately for the indigenous people, they didn’t have the knowledge about the eclipse and acted emotionally out of fear. However, you are now aware of the market cycles and with some help can protect yourself from the next downturn in the markets.
Reading Time: 3 minutes
As many of you already know, I joined Intelligent Investing, LLC as a partner in May. I can’t think of any way to give a greater vote of confidence than that.
Hans Blake, founder of Intelligent Investing, is not only a CPA, but also is a CFA® charterholder. CFA® charterholders or Chartered Financial Analysts®, is the highest distinction in the investment management profession. Hans’ wife Amanda is an incredible resource herself and provides professional support that helps make the client experience seamless and satisfying.
I’ve known Hans a number of years now, as we have spent a significant number of hours in professional seminars together having CPA backgrounds. As we visited over the years, I came to appreciate his philosophy of how money should be managed, and as my friends and family know, I can be a harsh critic.
With my CPA background, and experience as a Certified Financial Planner® we feel we have the best credentials possible to serve our clients well. We think it is important to understand the “financial alphabet soup” of credentials as there are new credentials coming to the scene every year. As a member of the American Institute of CPAs Personal Financial Planning Section, I achieved the PFS, or Personal Financial Specialist designation as well, a financial planning credential only available to those with a CPA background. Hans is also part of the South Carolina Association of CPAs.
Our family has been blessed to have started financial planning early in marriage, along with a thoughtful and aggressive approach to individual investing. As someone who is extremely goal-oriented, I’m excited to work with clients and client families who seek clarity in these these areas.
Chick-fil-A® of Wealth Management
Hans worked at Chick-fil-A for four years growing up and was trained by the leadership teams at the corporate headquarters. Hans’ goal is for Intelligent Investing to be known as the “Chick-fil-A® of wealth management.” We want people to have a wonderful experience in the onboarding and ongoing relationships that make the wealth management a byproduct of our client service.
Whenever you walk into a Chick-fil-A® restaurant and say, “thank you” to an employee, you will hear them reply “It’s my pleasure.”
One way that client service shines in organizations is when the workers enjoy what they are doing. I can tell you that it is a joy to be able to help others at this time of life. We work with clients of all ages, but as you can imagine, retirement transition is a passion of mine. As individuals, we work for decades to make money, and as Hans is quick to point out: “people know how to make money in so many ways, but once they have made it, they often don’t know what to do with it”. As we near retirement, we are faced with many one-time decisions, for which we have no experience, and these decisions have a huge impact on whether or not we have a successful retirement.
Fee Only Transparency
As a 100% fee-only RIA firm we bring complete transparency to our client-advisor relationships, and the client can rest assured we are on the same side of the table with them. Every commissions sales agent on the planet is pushing products at retirees, who are often not well versed in how to evaluate if these products are appropriate for them or not. As we make these one-time decisions, it is especially important to have professional and unbiased advice. When couples enter their retirement and “Golden Years”, one thing we don’t want is a “regret period” in which to reflect on mistakes made during this very important life transition.
As a firm, we are independent from outside pressures. This independence allows us to not only be unbiased in all that we do, but to be completely unconstrained in sourcing the best investments and economic research to serve each client best. Similarly, peace of mind and financial freedom are hard earned rewards for decades of work and savings. It is our goal to take the worry and anxiety out of the retirement transition period, so the client can focus on “what’s next”, not personal finances. Entering retirement with a thoughtful financial plan and the right portfolio helps a client to build a life in retirement that is every bit as rich and rewarding as when they were raising a family and working professionally.
Stay tuned to the many exciting events on the calendar for 2017, and consider joining our newsletters below, if you haven’t already!
Intelligent Investing is able to stress-test your existing portfolio to determine what raising rates may do to your portfolio. We’d be happy to let you know what hidden risks may be lurking in your portfolios, and whether you are in an appropriate portfolio based on your risk tolerance. See the article below for what rising rates could mean for your money.