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Ponderings For the Week of February 17 to 23, 2020

Stocks Reach New Records

Stocks gained for a second week as investors gained more assurance that the coronavirus is being contained. The obsession with the virus, however, has diverted attention from signs that the economy is beginning to face headwinds. For example, there are new concerns about lower demand for and insufficient supply of manufactured goods.

So far in the opening weeks of 2020 large-cap stocks are outperforming mid- and small-caps with technology continuing its stellar performance. Last week’s testimony by Federal Reserve Board Chair Powell reassured investors that the Fed was closely monitoring the economic impact of the virus.

 

20 Financial Resolutions for 2020 (Concluding Installment)

Here is the last round of my 20 financial resolutions for the New Year. Thank you for hearing me out.

  1. Buy into weakness and sell into strength.
    Successful investors have the ability, painful at times, of going against stock market trends. They are inclined to buy when the market is declining and sell when stocks are rising. Certainly this requires a lot of gumption, but this approach has always proven to be successful so long as you plan to hold onto most of your money for at least a decade. There’s a third strategy to employ if you’re so uncertain that you don’t know how to proceed. Do nothing. So long as your money is reasonably well diversified, standing pat is a perfectly sensible approach.
  2. Be vigilant about elder financial abuse.
    Elder financial abuse is a problem of epic proportions as our population ages. At least one family member or trusted professional needs to keep a close eye on the senior’s financial life. Sad to say that the most likely abuser is someone who is close to the senior – a child or caregiver. It may be desirable to have two persons monitor the financial life of the senior. If abuse is suspected, contact the state agency responsible for investigating these serious matters.

 

Smart Money Tips

 

  • How long has it been since you’ve reviewed your will?  Preparing a will is an important step forward in your financial planning, and once a will is done, you can pretty much sit back and relax, knowing you have provided for your loved ones in the event the unexpected – but inevitable – arises. Remember, however, that there may be changes in your life that require a revision in your will or durable power of attorney or advance directive. Changes in marital status, the arrival of children, or a change in your financial situation may necessitate a review of your will. On top of that, your will and other documents may need to be revised due to changes in the federal and state estate tax regulations. The only way to know for sure is to ask your attorney. That’s a good thing to do every few years. Incidentally, one reason I’m not very enthusiastic about do-it-yourself wills is that you don’t have an attorney to consult about the possible need to make a change in your estate plan.
  • Keep only one checking account. If you have multiple checking accounts, you can probably get by just fine with one. Eliminating any checking accounts you don’t need could save some money on those annoying monthly fees. While you’re at it, see how much you’re paying in fees and if you’re horrified, shop around for a bank or credit union that wants your business rather than one that just wants your money.

 

 

 

 

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