Ponderings For the Week of April 29 to May 5, 2019

New Records Set Amidst Robust Week for Stocks

The Standard & Poor’s 500 Stock Index and the NASDAQ set all-time records last week, buoyed by surprisingly strong GDP growth and continued pleasing first quarter corporate profit reports. Stocks of all sizes shared in the advance, with technology shares once again attracting investor affection. Two perennial threats to the equity markets, inflation and rising interest rates, have taken a back seat. Muted inflation data for the first quarter has the Federal Reserve signaling that it is unlikely to raise interest rates this year.

Conditions are so positive that Wall Street pessimists are converting to optimists and the heretofore optimistic are becoming even more so. Is history once again being lost in the euphoria? Just as times of maximum pessimism have produced strong rebounds, so has pervasive optimism often heralded slumping equity values. This doesn’t suggest the need for excessive caution, but adding significantly to stocks in expectation of more of what has been enjoyed so far this year is unwise unless you have a long time until you will need the money.      


You Might Want to Consider Completing an Ethical Will

An “ethical will” is a way for someone to share personal information to family members. Ethical wills are often written by people at turning points and transitions in their lives and when facing challenging life situations. There is no prescribed content to an ethical will, but some topics that might be considered include:

  • Important family traditions
  • Family or religious ceremonies that have been meaningful
  • Things that were learned from older and younger generation family members and others
  • Values that the author wishes to pass on to the next generation
  • Meaningful changes in the world that have occurred over the author’s lifetime
  • Major changes that occurred in the author’s personal circumstances
  • Important decisions that were made that made a difference
  • What the author might have done differently
  • What the author hopes people will remember about him or her
  • Feelings that the author has had that might not have been shared with others
  • What has not been accomplished that the author had hoped to accomplish
  • Hopes for the future

You may want to specify who should and should not read the ethical will and may choose to prepare different versions for different family members. The contents of an ethical will, which have no legal standing, are often shared with loved ones before death, or the writer may prefer that it be read posthumously. If you prepare an ethical will that is intended to be read after death, be sure to make family members aware of its location, perhaps as a part of a letter of instruction. Our “Lifetime Financial Organizer” includes a section with suggestions and space for completing an ethical will. Visit www.mylifetimefinancialorganizer.com.



Smart Money Tips

What’s your number? Do you know your "number?" Americans love a shortcut, and when it comes to putting money away for the future we can become fixated on our "number." That is the amount of money you will supposedly need to amass in order to be able to afford to retire. The media and many investment companies like to use numbers to scare the daylights out of you. They suggest that people who are about to retire need at least $1 million in the kitty in order to have any hope of averting deprivation later on. Of course, $5 million is better; it will allow you to be, in the words of one publication, "beer and pretzels rich." Talk about sleep depriving.

First, don't conclude that if you don't achieve the number that someone else asserts you need to achieve that you'll be consigned to an impecunious retirement. Most retirees, including a large majority of current retirees, can retire quite nicely on far less than what some news article or TV talking head says you’ll need. Second, rather than obsessing over what you need to do to achieve some number, focus instead on the basics of sound financial planning.

Bring your lunch to work. Rather than go out for lunch, consider bringing your lunch to work. This can save a lot of money. While you’re at it, rather than stopping for coffee and whatever on your way to the office, bring your own and save even more. Special note to millennials: if you can get into this habit now, the savings (if you put them away for retirement) could add hundreds of thousands of dollars to your retirement kitty.










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