Market Alert March 4th, 2019: Who’s Right? The Stock Market or the Bond Market?
As a firm that specializes in Retirement Planning, our two goals for you are:
- For you to have Financial Peace of Mind and
- For Your Money to Last As Long As You Do.
Our investment philosophy of Buy, Hold, and PROTECT! is designed to give us Unlimited Upside with a Tolerable Downside.
Although the S&P 500 Index Has Rallied, Interest Rates Have Fallen This Year.
The stock market and the bond market seem to have a different opinion of the future.
With the rally in stocks that we have seen this year, we could surmise that the market sees growth and prosperity ahead. The bond market, as measured by the 10-year treasury note, has seen interest rates drop from 3.0% to 2.75%. From that move, we could surmise that the bond market sees bad economic times coming as interest rates tend to fall as the economy slows.
So who is right? Generally speaking, the bond market is a more accurate predictor of the future than the stock market because many investors buy or hold stocks because they love them and bond investors are investing based on the borrower’s ability to pay. When you lend money, you usually are making a business decision not falling in love.
Despite the rally, we have not reached our buy signal, and we are not yet believers in the current trend. If the trend stays positive, we could reach a point where our buy signal tells us that the tide has changed and we need to participate in the potential continued upside.
As we have reported to you in previous emails and videos, we will be very cautious when going back into equities as we always want to protect your finances from any risk of loss.
We are not out of the woods yet, and we will not panic and start buying prematurely. This could still turn out to be a Bear Market before all is said and done.
If you are not a client of Money Matters, we want to visit with you! Let us worry about all this so that you don’t have to.
- Do you know if you have enough money to retire on?
- Do you have a plan for what to do when the next market crash comes?
- What are 5 strategies that you can use to reduce your income taxes?
- How do you plan for your retirement cash flow?
- What should you do to maximize your Social Security benefits?
- Are you diversified the way you should be?
We would love to review your retirement plan with you and see if we can help you. If we can help you, that’s terrific, if not that’s fine too. Either way, there is no charge, there is no obligation, and we will part friends!
We are thankful that we have a sell strategy.
Our strategy enables us to participate in the upside as long as it lasts; it is also designed to get us out with tolerable losses when the trend changes.
And we all know that the trend can change quickly and precipitously.
Do not get complacent. Overconfidence is dangerous when it comes to investing.
Look at the chart below: what do you think is going to happen next?
I would like to invite you to come to one of our seminars. They are designed for those of you who are retired or retiring soon, and they are free.
At the free retirement seminar we will answer these burning questions:
- How do I protect my retirement from the next market crash?
- How do I avoid three basic “pitfalls” of retirement distribution planning?
- Am I on track to be able to retire?
- When should I take Social Security? 62? 66? 70?
- Am I diversified the way I should be?
- How much can I afford to spend during my retirement?
- How can I fight inflation?
- How do I determine how much risk is appropriate for me?
- Do I take my pension or a lump?
- How do I avoid having 85% of my social security getting taxed?
- Should I rollover my 401(k)?
- How do I reduce my income taxes in the future?
- You Pulled Out Too Soon!
- Is 4% Income Still OK?
- How To File For Spousal Social Security
- Buy & Hold Because You Are A Long Term Investor… Wrong
- Estate Tip: The Dynasty Trust
We believe that the risk that we have today is different than anything we have had in history.
The hundreds of trillions of dollars of global debt put a significant strain on government’s ability to do anything about the next recession. In fact, we see all of this debt exacerbating the effects of any economic slowdown. The worst recessions that we have had around the world have mostly been the results of governments taking on too much debt.
It is our singular goal to keep our clients from becoming poor. Preserving the wealth that they have built is job number one for us. I encourage you to join the Money Matters family!
I believe that avoiding large losses is the single most important thing that we should be concerned about as investors.
Perhaps you were given a package by your employer. Perhaps you sold an asset and want to know how to properly invest the proceeds. Perhaps you inherited money and want to keep it safe and grow it if you can. Perhaps you just want a second opinion. These are all reasons for you to take advantage of all of the resources that we at Money Matters have to offer you.
We want to help you to achieve your retirement goals.
Thank you for subscribing to this newsletter. I hope it finds you and yours in good health and spirits.
Ken Moraif, CFP®, MBA