Insights

Two different belief systems serve as the basis for investment decisions: the modern portfolio theory (MPT) and behavioral finance (BF). A basic summary of the two schools of thought: the MPT focuses on the optimal state of the market, while BF is more focused on the actual state of the market. While an understanding of both ways of thinking gives you a better understanding of the market, as well as your role as an investor, a primary focus on modern portfolio theory tempered by behavioral finance may enhance your overall investment experience.

Did you know you may be able to take your 401(k), 403(b), or 457 plan and roll it into another type of retirement account while you are still working? Let’s look at how these rollovers can happen and the pros and cons of making them.

Healthcare is one of the essential parts of life's financial and personal journey. Many have not yet utilized all the financial tools that may help. An HSA gives you a tax-exempt savings account to pay for your healthcare expenses. The money you don't spend in one health plan year rolls over to the next. You are also enrolled in an HDHP (High Deductible Health Plan), in which your insurance company will only pick up the tab for significant healthcare expenses (including types of preventive care, maternity care, and pediatric primary care).

As the market closed for 2021, the S&P 500 was up about 25%. This is on top of a 15% rise in 2020 and another 25% in 2019. Needless to say, not one of the several dozen “expert” prognosticators I checked came close to forecasting this. Their collective record in forecasting the equity market and interest rates over the past decade has been abysmal – they make your average TV weather person look downright psychic!

January is Financial Wellness Month, a time to remind people to plan and update their financial strategy. It’s a great time to connect with your financial professional to discuss your financial situation and aspirations for their future. It’s also a good time to connect to see if your financial strategy needs any adjustments or changes based on your lifestyle.

In February 2019 we asked, “Where is inflation?”, and discussed the many wrong forecasts over the prior decade touting its re-emergence. We also discussed some of the reasons it had remained so tame over the prior two decades. But heeding Milton Friedman’s dictum that “inflation is everywhere and always a monetary phenomenon” predicted that continued expansion of the money supply would eventually saturate the market and the excess would drive inflation up. Well, the Fed has finally found that limit and proposals now before Congress threaten to speed us past it. Recently, the Labor Department reported inflation over the prior 12 months of 6.8%, the highest in 39 years.