Categories for Blog
January 10, 2017 9:29 am
Published by dylan
New year. New you. As we go into 2017, we’re all fired up to make improvements: diet, exercise, relationships, finances.
What do you want to accomplish this year—and in the future? It all depends…on your goals. Ever wonder why most new year’s resolutions fail? It’s because most people don’t go through the goal engineering process. (Yes, there is a science behind that.)
X person from the evening news suggests you should do this, you read Y in The New York Times, you heard Z on a popular podcast, and who knows what’s going to happen with the incoming administration.
The only thing to do is to take charge of your situation. Again, it’s about what you want to accomplish. It could be spending more time with family, getting up at 5 a.m. to exercise with a buddy or a trainer, learning a new language...or also figuring out what you want to achieve financially this year. Perhaps just pick one to start with.
There’s no time like the present to tackle whatever it is you want to do. Just like you have other advisors to help you in certain areas, begin the new year by taking charge of your finances. Base your future on what is important to you, not by a popular article you read or what you heard from an arbitrary commentator.
Instead, knowledgeable wealth advisors suggest that you take the following steps:
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Envision your goals and write them down. It helps you and your financial advisor to have a tangible document of where you want to go this month, the next six months, a year, and going forward. Some people jot things down on a legal pad, others prefer creating an Excel spreadsheet, while others are more visual and like to include pictures of their goals—such as a trip, a new home or their ideal retirement—into their yearly financial plans. It doesn’t matter what your method, only that you take it out of your head and put it on paper, Pinterest, or your iPad.
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Anticipate the obstacles. Any worthy goal has obstacles. Fleshing out the obstacles in advance and writing out how you will move through them will eliminate the excuse of not being able to achieve it. Think about potential roadblocks, like “impulse purchases” or expenses that you could have anticipated, which will derail a long-term savings plan.
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Enact your written plan. Whether it’s saving a certain amount a month for a vacation, putting money away for retirement, making sure school tuition is paid for, taking care of aging family…it all takes consistent action. Once you’ve envisioned your goals, how are you going to get there?
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Take control of your habits. Your habit to regularly save, your habit to maximize your tax advantages, and your habits to invest greatly influence your ability to make your financial plans successful. And, of course, have a habit to direct funds to what makes you happy—whether it’s giving to charity, helping a family member with college tuition, expanding your wine collection, or creating memorable experiences. Great investing and savings strategies are not temporary things you do at the beginning of the year like all those other resolutions. Simple things such as automatic deductions to your designated accounts can help you easily reach your goals without even thinking about them.
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Don’t try to time the market. Instead, think about what you want your future to look like. Then go beyond wishing and take action on your future plan. Over the years, financial advisors have found that using consistent asset allocation in your plan may help you to meet or surpass your financial goals.
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Create realistic expectations. No matter how thoroughly you plan your financial portfolio, even experienced investors have down years along with profitable years. In some years, you may need to make up for losses in certain investment or 401(k) accounts—and in others you may be experiencing significant growth. By talking with a financial advisor, you can make appropriate adjustments to help meet expectations.
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Monitor your goals. Few people have static financial situations. Which is why a quarterly review with your financial advisor can help keep you on track or give you informed guidance to fine-tune your plan.
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Be flexible to change. For some people, this is more easily said than done. However, we can’t control everything. Circumstances can alter, goals can adjust, markets can change. Working with a trusted advisor, you can work through uncertainties to keep working toward your goals.
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Don’t get discouraged. If one of your goals has been to lose weight, perhaps you’ve reached a plateau at some point; if you’ve ever remodeled or built a house, you’ve definitely run into unexpected delays. The same holds true for investing. There are bound to be highs and lows along the way. We live in a world of immediate gratification so it’s natural to want to give up the minute something doesn’t turn out as anticipated. But sage advice is like a good wine—it works over time and only gets better with age. Working with an experienced advisor can help you navigate your financial and life changes. Your plan is the glue that binds you to your future goals, and it will keep you on track and in a positive frame of mind.
The start of a new year is an excellent time to take stock of what you want to accomplish in 2017, and a big part of that includes financial planning. At JJ Burns & Company, we’re here to help you achieve your goals this year—and for the future. We hope you make 2017 your best year yet.
December 30, 2016 9:41 am
Published by dylan
This time of year is one of reflection. We go in and out visiting the ghosts of the past, present and future. Just as in the classic story, A Christmas Carol, we all face the decisions we’ve made—but even better, we also have the opportunity to reflect on how to improve ourselves and others.
As the end of the year nears, there’s no better time to take stock of what we want to do now—and what is in store for the future. It’s also a time to recognize the many “angels” we have around us. As much I would like to believe in fairy godmothers, or plump, pink cherubs who fly about on their gossamer, feathered wings granting wishes, there are real angels who live, work and love right here among us.
These angels include Mary*, a JJ Burns client, and her long-time caretaker Sophia*. Mary will be 100 years old in 2017. We have worked with Mary to set up and oversee her life and wealth management plan for almost 20 years.
Mary worked for many years as a college professor in psychology and had a successful private practice. She never married and had no children. Early on she shared with me that she needed a financial partner to help her make choices to give her a life that she can enjoy.
As a philanthropic person, Mary always looked to help others before herself. Whenever she could give and still be able to afford a comfortable life, she did so. She contributed to children’s education programs, religious causes and medical care in less fortunate countries. I’ll always remember when 9-11 occurred, she made a contribution to the local firehouse and they came to her home to acknowledge the gift. It was uncomfortable for her and she felt it was unnecessary. Nonetheless, the fireman showed up at her door and it was they who were honored. Mary taught me that no matter how much or little you have, you should try to help others because every bit makes a difference. She shared many life experiences with me over the years I have known her and I walked out of every meeting with her reflecting on how much I learned.
We mapped out a financial plan that detailed how Mary would enjoy her life, and when she needed care, what her treatment would look like. As time progressed and her health began to deteriorate, Mary needed more care. What became a few hours per week, eventually progressed to a full-time aide. We evaluated each aide together with written expectations of what we wanted them to do.
When we hired Sophia there was a magical connection that occurred. To see her in action and the love she has for Mary is something I have rarely witnessed. Sophia cares for Mary in every way. She shops at natural food stores so Mary can maintain a healthy diet. Her meals are home cooked and made with large doses of love for another human being. If Mary is sick, Sophia researches herbal remedies that have brought her better health.
Over the last couple of years as Mary’s mental and physical health declined, Sophia has been with her every step of the way. She arranges for a yoga instructor, physical therapy and for friends to come by and visit. Getting her hair and nails done, having lunch, going shopping or simply looking at the holiday windows are all part of their weekly activities. Mary has continued to travel to Florida and the west coast to visit family members with Sophia by her side.
I have witnessed how Sophia cares about Mary in every way. And Mary recognized early on what a special person Sophia is. Together we developed a part of Sophia’s compensation that is based on Mary living… not dying. Additionally, without Sophia knowing, Mary established an educational trust for her so that when the day does come of Mary’s passing, Sophia can live her dream of becoming a registered nurse.
As I reflect on the stories of these “angels” I recognize that setting goals and planning were the key to Mary’s success. She knew she wanted to age comfortably at home while having a trusted caretaker help do her shopping, chores, and cooking, while continuing to travel and be the adventurer she always was. Living life on her terms was vital to her.
Of course, everyone’s financial situation is different and you probably have individual goals for how you want to distribute your finances. Investing and minimizing taxes were the original contributors to Mary’s personal and financial success. Sure, she had the past—some well-earned funds to invest. She has the present—the one she enjoys with her caretaker “angel” Sophia. And now she also has a future of income security thanks to good financial planning, which allows Mary to live her life as a centurion to the fullest.
You don’t need to be 100 like Mary to appreciate a generous life. No matter what your age, you also have some “angels” in your midst. At JJ Burns, it’s always been a privilege to help our clients create the lives they wanted for themselves, for their families, for charities and for those closest to their hearts. This is what it really means to be an advisor—to be of service in the best way we know how. In this year and the upcoming ones, take some time to plan the life you want and if you have already, check in for a progress report.
From all of us at JJ Burns, we wish you a Happy and Healthy New Year!
*Not their real names.
November 4, 2016 7:11 am
Published by dylan
Everyone is afraid of something. It’s true. The visceral reaction to threats, real and imagined, has driven human behavior for millions of years. As time has passed, our species has evolved from fearing simple threats from predators and harsh climates to fearing more sophisticated threats. We have mostly conquered our ‘lizard brain.’ The lizard brain (so called because it is believed that reptiles survive almost solely on its impulses) is the amygdala, which controls emotions such as fear, our survival instincts, and memory. Controlling fear is how our ancestors emerged from the cave and conquered predators and darkness. Now, millennia later, what are we most afraid of? According to Chapman University’s 2016 ‘Survey of American Fears,’ Americans are most afraid of government corruption than any other of the additional 79 topics in the survey. That’s right: we are more afraid of our own government than we are of death, disease, loneliness, war, climate change, going bankrupt, snakes and public speaking. This year, it appears, we are also afraid of our future.
Some of our recent discussions with clients have surfaced their biggest fear: the outcome of our national elections on November 8. As we might expect, investors are worried about the future because of heightened dislike for many of the candidates and an uncertain future for the economy, the markets, and their portfolios. Their collective lizard brain says sell stocks and hide, much like our primitive ancestors, and emerge when the perceived threat has passed. As we often say, we understand this reaction. We know that the markets, like people, hate uncertainty. We also know that managing our emotions – especially conquering fear – in trying times is the key to success in any endeavor. So it is today.
Remember that the market has weathered many crises since 1900: two world wars, the Roaring ‘20s, the Great Depression, the first big market crash in 1929, oil shocks, wars in Korea, Vietnam and the Middle East, the 1987 flash crash, the Tech Bubble, high inflation, low inflation, terrorist attacks on U.S. soil, the Financial Crisis, a government debt downgrade, landing a man on the moon, the Ebola and Zika scares, ISIS, the beginnings of climate change, banking crises, the rise of the internet, the rise—and fall—of communism, and so on. Through all these events, capitalism has survived and adapted and moved forward. We believe it will again regardless of Tuesday’s election results.
Here’s our brief summary of the main issues to consider when thinking about the election and the post-election markets:
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The U.S. economy is chugging along in a low-growth/low-inflation environment. A recession is not on the IMMEDIATE horizon, interest-rate hikes are expected to be modest and drawn out, and the job and housing markets are stable. Preliminary Q3 GDP came in at +2.9%. As we write this, October’s payrolls number was good and included prior-month positive revisions, unemployment dropped to 4.9% and wages showed their highest year-over-year increase since 2009 (ending at +2.8%). Even market news is good: S&P 500 earnings results thus far for the third quarter of 2016 are showing improvement over the past six quarters. These data show expected improvement for the current quarter and into 2017.
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The Fed is expected to use the calm after the election storm to raise short-term rates by 0.25% in December, with two additional +0.25% hikes expected next year.
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The markets, and a narrow majority of the electorate, appear to favor the Democrat candidate. Mrs. Clinton has proffered a platform of change, but nothing that we see as too radical. We expect that, should she win and the U.S. Senate change control, that modest incremental legislation will be enacted to (among other things) change the tax code, work on regulatory and immigration reform and review U.S. trade pacts. The markets have, and should continue to, respond modestly.
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Many of our clients have stocks and bonds in their portfolios. The stocks are expected to provide long-term growth to keep ahead of inflation; the bonds provide income and act as ballast when markets are especially volatile and investors seek safety. Adjusting this mix by using rebalancing opportunities is our best tool to keep our strategic focus and avoid costly tactical mistakes. This is what we do.
Investors need to battle their lizard brains and keep their focus on the future, not the short term. The initial fear trade is to sell and go to cash; a tried and true short-term palliative, selling stocks and sitting in cash is good for short-term peace of mind but not a long-term planning strategy. Our clients know that we believe in globally diversified portfolios, that we focus on the long-term, and consider strategy over tactics to ensure that portfolios are built to stand the weather of time rather than simply avoid today’s storm.
As always, we appreciate your confidence and would be happy to discuss any of the issues raised here or answer any questions you may have.
September 27, 2016 9:28 am
Published by dylan
Have you ever been out to a great dinner, or on a great vacation, or perhaps at a great show, really enjoying yourself, yet knowing in the back of your mind that the bill for this great experience would come due, and it might be a doozy? Think about that experience and feeling, apply it to today’s markets, and ask yourself: how will investors feel when it’s time to pay the bill?
We’re not writing this to imply that a market crash akin to the Financial Crisis is just around the corner; far from it. We see ourselves in a slow-growth world that is a result of the experimental monetary policy by governments and central banks (CBs). They are manipulating interest rates without providing comparable fiscal stimulus to recover from a financial downturn, and as a result, these easy rate policies around the globe have lulled investors into a false sense of complacency.
Just looking at this small sampling of market returns gives us some idea about the effects of the CB’s policy of low rates:
During the period when the U.S. Fed embarked upon its Quantitative Easing programs (QE) and Operation Twist, the stock and bond markets earned much of the total returns since the low of the Financial Crisis. Other central banks, particularly in Europe, chose different paths that focused initially on austerity and had less robust results (e.g. a ‘double-dip’ recession in the U.K.). Across the globe, however, it appears that the ability for continued monetary policy stimulus to drive growth is limited. We are left with stagnant growth levels, negative interest rates in many countries, market uncertainty and growing populist movements that promote nationalism over growth.
Central banks are not united in policy goals, governments and corporations are not engaging in enough (if any) fiscal stimulus, and the world’s growth engine for many years—China—is retrenching and transforming. All of this leads to a suspicion that stocks and bonds are overpriced, particularly on the part of income-seekers driving money into utilities and other high-dividend stocks. This is clearly an important inflection point. We must accept that issues that have become political ‘hot button’ talking points—global trade, immigration policy, tax reform and populism—are perhaps now more important drivers of future growth than furthering the low interest rate policies that have dominated the past seven years.
Investors have asked us, are we worried about a bear market? A combination of several indicators turning bearish would cause us concern, such as much higher interest rates and inflation, an inverted yield curve and stock overvaluation. Recent market gyrations seem to be overreactions at this point; U.S. economic data do not currently predict a recession or an inflationary environment that would require the Fed to quickly raise rates. This does NOT mean valuations are at relative discounts—low rates are pushing some investors to equities, and areas such as utilities will be the first to sell off as rates move.
We’re seeing a lot of investment suggestions for private equity, private or second-market debt funds, real assets and options-hedged equity products. All are expected to provide better risk-adjusted returns than conventional stocks and bond portfolios. Our evidence doesn’t support many of these ideas. As we learned eight years ago, and can see in the table above, the traditional relationships between stocks and bonds provides the insurance and low correlation we need. In times of crisis, U.S. Treasurys and public-market liquidity (such as U.S. large-cap equities) are the prized investments.
Our clients know, too, that we preach diversification, patience and a focus on the far horizon, not the next step. The market data we review indicate that the U.S. economy is still healthy (but not robust), and few signs of the high rates, high inflation, excessive stock valuations or a recession are present. We expect some volatility in the period ahead, but our long-term growth outlook remains positive.
August 31, 2016 8:21 am
Published by dylan
Whether you’re in the Trump or Hillary camp—or for the possible candidate in between—some have been asking, ”Are there financial strategies to take to protect your investments before, during and after election day comes around?”
We understand that it’s fun to banter with your friends around the dinner table about the merits of this or that candidate, what’s even more interesting is to examine how investors react to political change. Behavioral researchers have found over the years that if an investor’s favored candidate becomes elected, the investor experiences an increased market confidence and tends to take on more portfolio risk. Conversely, if the candidate-of-choice loses, investors expect fallout from the new administration and look for investment safety.
Take the recent Brexit vote for example. Investors needed to be prepared for market risks if the vote went either way. Thankfully it didn’t create the significant market losses many predicted, but the impending vote had people on edge for a bit.
In the case of the U.S. presidency, researchers from the University of Miami, Brigham Young University and the University of Colorado at Denver conducted a study on how politics impacted investor behavior, reviewing three presidential-election years from 1991 through 2002.
Their behavioral research found that after the 1992 and 1996 elections when Bill Clinton won the presidency, Democratic voters tended to invest more in domestic stocks and to stay invested for a longer time. Conversely, Republicans felt less confident at that time about the economy and invested in foreign stocks and traded more frequently.
Then when George W. Bush won the presidential election in 2000, Republican voters did the same thing the Democrats did when their party representative was in office—they took on more risk, invested in domestic companies and traded less frequently.
The outcome from the researchers’ study was that both Republican and Democratic voters seemed to be influenced more by their political beliefs to help guide their investment choices than by listening to the logic and the advice of a financial advisor.
Voting—like investing—is a very personal act. And there’s no right or wrong way to cast your vote. The only thing that’s certain is it’s going to be quite a journey leading up to November.
The takeaway from studying investor behavior during election seasons is identical to why many investors fail to achieve reasonable returns…their own behavior is their most significant risk. We believe that investors who have a “true” diversified asset allocated portfolio will experience the variable returns from each asset class. Don’t be swayed by popular opinion or what you hear from the media about a certain candidate’s platform to make immediate portfolio changes.
Your financial situation is unique and needs an individual review to cover all potential scenarios. No matter what is happening in the world, a solid financial strategy should have the foundation of objective analysis. Whether you lean toward the Republican, Democratic, Independent—or any other political philosophy—our role is to help you create a solid financial plan.
July 27, 2016 9:54 am
Published by dylan
“Till death do us part” has now been replaced with “till debt do us part.” Therapists, divorce lawyers and financial professionals often cite money issues as a main contributor to the demise of a marriage. But it doesn’t have to be the case.
While everyone’s situation is different, there are some common financial issues that can derail a relationship.
1. Opposing values
If one partner wants to acquire a lot of possessions or live a certain lifestyle—expensive cars, the latest fashions, luxurious vacations and regular visits to the top restaurants—and the other partner prefers a more toned-down existence, then there may be areas of conflict. It doesn’t matter how much net worth you have—materialism can decrease happiness.
Researchers at Brigham Young University and William Patterson University found in a study that in one in five of 1,734 couples, both partners admitted a strong love of materialistic things. While these couples had financial means, money was often a bigger source of conflict for them. Not surprisingly, these couples were rated at the bottom of the survey’s happiness scale.
2. Not seeing eye-to-eye about money
This differs from values, as it’s more of a day-to-day allocation of funds. According to experts, foolishly spending money is the number-one financial cause for divorce. Of course, “foolish” is a matter of opinion.
Some spouses may want to save to meet goals such as paying for college, buying a second home or investing in a business. While others believe that spending money on hobbies such as gambling, restoring cars or remodeling homes is a good way to relax or to increase income. The take-away is to decide what amount of money you, as a couple, are comfortable allocating toward discretionary spending.
3. Maintaining traditional relationship roles
Gone are the days when women turned the earnings and financial planning responsibilities over to their partners. Many women earn more than their husbands; some wives—or husbands—choose to delay an income to care for their children.
The bottom line: Someone in the household is usually more predisposed to managing financial matters—and if no one is, consider working with a Certified Financial Planner. There are also many online tools you can use to help keep track of your finances.
4. Having different money philosophies
Often in a marriage, one is a spender and the other is a saver. It’s not a deal breaker, but these differences can cause tension in a relationship. It is not uncommon to see financial opposites gravitate toward each other.
Recognizing this and consulting a neutral third party can help alleviate tensions. Perhaps it means allocating a certain amount for the spender to have each month and an amount that the saver feels comfortable with, as well as a common fund that the couple contributes to that meets mutual goals.
5. Neglecting to plan
As John Lennon said, “Life is what happens to you while you’re busy making other plans.” Things happen—and sometimes you look back and wonder where the years went.
Marriage, kids, houses, businesses, caring for loved ones, health issues—no one is immune from life’s challenges. Which means having a plan as a couple—from the day you say “I do” is key. If you have significant assets, consider a prenup from the start. If you forgo a prenup, consult with a financial planner to develop a roadmap for moving forward.
Money is a difficult subject for most people. Combining funds, philosophies, and spending and savings habits can add to the pressure. Whether you’ve been married for decades—or are simply contemplating marriage—consider professional advice about how to make a financial plan that you both can agree upon. Talk to us today about how to develop a personalized financial plan that meets your mutual goals.
July 11, 2016 9:28 am
Published by dylan
Melville, NY – Nationally recognized wealth management expert JJ Burns announced this week that the company he founded has acquired Syosset-based Emmes Wealth Management. Emmes founder and CEO, Barry Goldberg, will join JJ Burns & Company as a Director. The acquisition represents a significant step toward JJ Burns & Company’s long-term strategic plan of building a leading wealth management team.
Founded in 1994, JJ Burns & Company focuses on comprehensive wealth management based on an individual’s unique vision and goals. This boutique, high touch approach to planning incorporates all areas of your financial life including retirement planning, investment management, estate planning, and legacy planning. With the acquisition of Emmes Wealth Management and the joining of Barry Goldberg to the team, it gives JJ Burns & Company more time to focus on their mission of making a meaningful difference in the lives of the families they work with and their strategic partners.
“We serve our clients with openness and unparalleled attention to detail,” explained JJ Burns, CFP®, CEO/President. “And we’re excited that Emmes Wealth Management embodies those same principles that JJ Burns & Company is known for. Barry’s expertise and shared values formed the foundation of this acquisition.”
Emmes Wealth Management was built on the principal of taking a whole life view of clients’ financial situations and providing broad-based, integrated strategies. “We are excited to join JJ Burns & Company. Their team planning approach, analytical and evidence driven investment strategy, and powerful client service model will enable us to provide even more value to the families we serve,” said Barry Goldberg.
Going forward, Mr. Goldberg will continue to manage his base of clients while becoming part of strategic business development initiatives and strategic partnerships at JJ Burns & Company.
About JJ Burns & Company
JJ Burns & Company is a leading wealth manager for high-net-worth individuals and families. As an SEC-registered independent Registered Investment Advisor, the company is a fiduciary advisor making recommendations that are solely based on the best interests of clients. JJ Burns & Company uses a team approach with a focus on fostering long-term client relationships. The company works closely with other professional advisors to develop a holistic plan covering every aspect of a client’s financial life. For more information, visit https://jjburns.com.
June 29, 2016 9:53 am
Published by dylan
It’s not that women are from one planet and men are from another. It’s just that women tend to end up with different life circumstances than men. Top that off with lower salaries, and there’s a greater need for taking a closer look at financial strategies.
In my 25 years’ experience serving women clients, I find that they can multitask far more than men. They make the family’s social plans, maintain relationships, take care of kids, parents and in-laws—all while juggling their careers. This presents enormous challenges to their time.
It’s true that women control about half of household finances. That means they are watching the bank account, paying the bills, making large purchases, putting something in the savings account, and paying off the credit card.
But they often don’t understand the inner workings of investing. Some of them do, but they just have a lot on their plates. Looking from the outside, investing can appear to be a world of complicated strategies and men making deals.
Seeing Things Another Way
Of course having kids changes everything—finances and all the other aspects of your life. But even without kids, women can have cultural biases toward money, who handles finances, and how to save.
When attending financial workshops, our firm has noticed many men often ask about the best tips for investing. Many women, however, ask about balancing saving for retirement, sending the kids to college, and taking care of elderly parents.
They want to enjoy life while their kids are younger. Women feel some of the most precious gifts are right now in the present.
We often see men wanting tips on when to buy and sell. Women want to know how to support their daughter who’s moving home from college, and their elderly father who needs assistance to stay in his home a few more years. They wish to live a richer life, and at the same time successfully manage the relationships that are important to them.
Saving More, Having Less
Women tend to save a larger percentage of their salaries. They also contribute to their 401(k)s in greater numbers than men.
Despite putting more money away, we often see women ending up with less at retirement. Salary disparities can take a toll on investing over the long run.
But for those women who started saving early, the benefits of compounding can help make up some of the difference in the total amount saved.
Life Happens
We have found women who have children might take some time off during pregnancy or after the kids are born. For some families, they’ve had to make the difficult decision of balancing childcare vs. going back to work. Re-entering the workforce can often lower wages and position.
When parents get older and need help, women are often the ones to take on the added responsibility. When kids are also in the mix, that makes those women part of the “sandwich generation.”
Life expectancies are increasing for men and women, but women still tend to live longer. That means women need more money for living out their retirement dreams.
Women also are usually the ones initiating divorce. They’re willing to be on their own, and want to know what they can get for themselves and their children, and can they be happy with that.
Risky Business
Getting help from a professional can help in many situations. Developing a financial strategy is one.
Women are often not as comfortable taking risks with their investments. Sometimes this is because they view money a little differently than men. Other times, they haven’t spent as much time learning about investments.
It’s been our experience that women often take fewer risks with their money. They want to remain in a position of control. They might not mind our assistance, but they want to feel in charge of the situation. Circumstance like being in debt can weigh heavily on a woman’s conscience. She might feel like she needs to get that paid off before taking what she could perceive as the risk of investing.
It can be easy to let a husband take care of the household finances. It can be nice to let someone do the worrying, researching and planning for you. But if something happens and he is no longer there, some decisions will need to be made—and that will fall on her.
Worry More, Plan More
Many women have more control over the well-being of the family. This can make them worry more about finances. The balancing act of life can fall heavily on women.
Seeking advice from a professional can help teach her about investing, planning for retirement, and even saving for the kids’ college education. Seeking help from someone who has been trained can help alleviate uncertainty in many situations—whether the advice is from a financial advisor, lawyer, or accountant.
Getting help from the pros can help women feel like they are placed back in control. They can learn about investing strategies, plan for contingencies, prepare for retirement, set goals, and balance all the financial elements of life.
Despite often being good planners, we’ve seen many women don’t seek advice until something major happens. But once they engage our help, they tackle the plan like the other aspects of their life.
Someone “Gets” Me
You’ve decided you’d like to talk with a financial advisor. Don’t be afraid to ask them questions. When you start your search, you want to make sure it’s a good fit. When a match “clicks,” you feel more confident and ready to take what comes your way.
Don’t be afraid to explore how your relationship with an advisor would work. You may want lots of contact or just a little. You may want your financial advisor to give you a couple of choices to choose from, or a wide range.
See how comfortable you are with the way they explain things to you. Are things clear, or do you need more information?
You are building a relationship, and not just with an advisor but also a team. Make sure it feels good to you. It may be one of the most important decisions you make regarding your family’s future.
June 24, 2016 1:35 pm
Published by dylan
In an expectedly close but surprising vote, the U.K. has completed a referendum to endorse a withdrawal from the European Union (EU). Today’s market reactions are the usual result from market uncertainty around economic issues—sell-offs in “risk assets" such as stocks and currencies and a flight to quality in “safe-haven” currencies and bonds (e.g. the U.S. dollar and Treasuries). Early analysis of the results indicates, however, that the LONG-term results may not be as severe as feared.
HERE’S WHAT HAPPENED
U.K. and Commonwealth voters, by a slim margin, voted to leave the EU. Prime Minister David Cameron immediately resigned, and a new government will be installed in the fall.
WHAT HAPPENED IN TODAY’S MARKETS?
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Stocks and other assets such as currencies, have sold off around the globe. The U.K. and other EU countries have been hard hit, while the U.S. decline has been muted. Leading up to this, the global markets were rebounding over the last couple weeks.
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The U.S. dollar and Japanese yen have strengthened; the Euro has declined a bit, and the sterling has substantially declined against the dollar.
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There has been a flight to quality in bonds, particularly U.S. Treasury Bonds.
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Gold has been priced up, while oil has declined.
WHY WERE MARKETS VOLATILE?
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Many believed that Britain would remain in the EU and short-term traders made heavy bets in currencies and other “risk assets.” In fact, markets rallied into the vote as the DJIA was up over 250 points yesterday. Interest rates were moving higher.
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The markets were surprised once the votes were tallied and markets reversed their trend, giving back most of these gains. The behavior was violent as Britain leaving the EU is a significant event.
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The U.S. markets declined as the thought process that European companies are trading partners of the U.S. This could be negative for some businesses.
WHAT ARE THE LONGER-TERM EFFECTS?
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Britain represents 4%-5% of global GDP. Net results may not be that significant.
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The U.K. will need to implement policies to provide liquidity and ease interest rates.
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The sterling will fall, U.K. inflation will increase due to increased import prices, and U.K. GDP will likely decline in the near-term. A recession is possible in Britain.
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The U.S. will be relatively insulated. The Fed will likely delay interest-rate hikes.
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Global growth may be affected to some degree. This event is not a ‘Lehman moment’ that accelerated the global Financial Crisis. As one pundit noted, “…markets adapt. Policymakers adjust. Businesses will change course while they continue to seek profits. Prices will reset. Opportunities will emerge.”
WHAT SHOULD BE DONE IN MY PORTFOLIO?
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Our principles of portfolio construction are based on each of our client's unique personal goals. Their plan is well thought out and balanced by diversified asset allocation.
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Changing your portfolio based on a reaction to market events rarely leads to productive long-term results.
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All of our plans are built upon the certainty that we will go through negative events and market fluctuations.
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All of our portfolios contain an anchor of high quality bonds and bond funds, which help to limit declines in significant market events, and did so during the Brexit vote today. Our bonds are doing exactly what we want in uncertain times.
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We expect short-term stock volatility and will be partially offset by bond and commodities gains. Today’s market moves are short-term reactions, and most currency and bond markets have moved in orderly fashion (i.e. no extreme drops). And, as our pundit notes, “The long-term political, economic and financial repercussions of the ‘Leave’ vote are incalculable at this point.”
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While the Brexit vote has been surprising and unsettling, most of the effects will be felt in the U.K. and Europe. We don’t see any required portfolio moves at this point; most of the trading is just that—trading. Long-term investors should stay focused, and we’ll update you as events progress.
As always, if you have any questions or wish to speak to us directly please feel free to call us.
June 22, 2016 10:21 am
Published by dylan
Securities markets around the world have been reacting to the politically charged environment in the U.K. over the fierce debate about whether it should leave the European Union. A so-called “Brexit” referendum vote will be held on Thursday this week. British citizens 18 years of age and older, citizens abroad who have been registered to vote in Britain within the last 15 years, and residents of Britain who are citizens of Ireland or the Commonwealth (53 countries) are eligible to vote.
A vote in favor of leaving the EU would likely trigger further volatility in stock, bond and currency markets around the world. U.S. stocks already proved they were sensitive to the situation in the U.K. when they gapped down at the opening two Fridays ago after a poll conducted by The Independent suggested that 55% of Britons were in favor of a Brexit. The result surprised many investors, and the murder of Minister of Parliament member Jo Cox last week by a man shouting “Britain first!” stunned people around the world.
Candlelight vigil in London for Jo Cox
During the mourning of Minister Cox, tensions eased and additional polls were conducted, many of which suggested that The Independent poll was inaccurate. One betting shop put the odds of the U.K. leaving the EU at just 27%, or about 1 in 4. If accurate, it appears that the conservative groups that support leaving the EU will not have enough votes.
Nonetheless, we find it interesting that the U.K. is dealing with many of the same political issues that are being hotly debated in the U.S. presidential election. Jobs, immigration, and reclaimed sovereignty are the main issues for Britons who favor leaving the EU. These issues are very similar to the “Make America Great Again” slogan of the Trump campaign.
The global boom over the past two decades has eliminated many manufacturing jobs in both the U.K. and U.S. Meanwhile, immigration into both countries has caused concerns for conservative groups ranging from perceived increased competition for domestic jobs to increased healthcare costs and a threat of terrorism. The long-term effects have resulted in rising wealth inequality and chronic under- and unemployment among the middle and lower classes in both nations.
On the flipside, many voters in the U.K. appear to be supportive of remaining in the EU, as do most independent economists and large corporations. If history is an accurate guide, the referendum vote this Thursday could be similar to the last referendum held in 1975, when Britain considered leaving the European Economic Community. Back then tensions were running high as well, but more than 67% voted to remain. That’s an indication of how difficult it is to change the status quo.
Regardless of Britons’ EXPECTED intentions to remain, it’s important to be aware of market risks that could develop this week if the vote goes the other way. U.S. investors are clearly in favor of the U.K. remaining; that’s why U.S. stocks surged on Monday after many news outlets suggested that the votes to remain would significantly outnumber votes to leave. That said, market risk would likely surge if U.K. voters decide to leave the EU. The reason is there are many more unknowns associated with Britain leaving the EU than there are for remaining. Also, risks to GDP in the U.K. and the EU after a vote to leave have been estimated to be as low as a 3.2% decline within the next few years before moderating in the next decade.
In fact, the governor of the Bank of England said the prospect of a Brexit is “the biggest domestic risk to financial stability because, in part, of the issues around uncertainty.”
It has been estimated that negotiations about how the U.K. would divorce from the EU will take up to 2 years. Ironically, some of the most disliked EU economic policies may end up remaining in force in the renegotiated trade and economic treaties with former EU partners.
Some influential business people still believe that leaving the EU is a better option than remaining. Edward Atkin, one of Britain’s most successful manufacturers, was quoted by The New York Times as saying, “Customs duties are completely irrelevant compared to fluctuations of the currency.” Interestingly, most economists believe that a Brexit could be devastating for the pound. They also believe that it would take 10-15 years to recover from leaving the EU.
Regardless of how the referendum turns out, we believe that investors who are diversified in long-term strategies will experience some volatility in their portfolios in the short term. If voters decide to remain in the EU, we wouldn’t be surprised to see stocks around the world enjoy a relief rally. Deutsche Bank provided this handy chart to help illustrate how currencies, interest rates and stocks could respond after the vote.
We are also interested in how this week’s referendum affects the Clinton and Trump campaigns and other conservative movements in Europe. This may be the subject of a follow-up post.
June 16, 2016 8:38 am
Published by dylan
Whether you're beginning to plan for your financial future—or have found yourself smack dab into making significant decisions that you didn’t anticipate—at some point you’ll need to consult with a financial advisor. However, it can be difficult to always know who the best person is to trust your finances to.
Choosing a financial advisor goes beyond working with someone who has the backing of a large brokerage firm or an impressive list of credentials behind their name. When you look around, there are a lot of alphabet-soup designations out there. Anyone can call themselves a financial advisor, but that doesn’t necessarily mean that they are highly qualified to advise you.
What to Look for in an Advisor
Professional credentials do not tell you everything you need to know about an advisor. You should also look at an advisor’s experience, investment style, and type of clientele. Use the following questions to help you in evaluating an advisor.
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What are your qualifications? Advisors must be registered with the Securities and Exchange Commission (SEC) or Financial Industry Regulatory Authority (FINRA) in order to provide investment advice. It’s important to understand the two standards of care that advisors are held to by each. The fiduciary standard requires that an adviser put the clients’ interest first and is enforced by the SEC, while the suitability standard is enforced by FINRA and requires that a broker make recommendations that are suitable based on a client’s personal situation. You should also do your due diligence to find out if a potential advisor has ever been investigated or found guilty of an infraction.
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How does your firm operate? No great advisor goes at it alone so discover all you can about the team behind the principal advisor. The mix of the team speaks volumes about the firm. Ask what licenses, certifications and/or credentials members of the team have. For example, many top advisory firms will have a Certified Financial Planner (CFP) and a Chartered Financial Analyst (CFA) on their team. Go deep and investigate other members on their team as stated in the above. Ask what role they play and how this will benefit you.
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What services do you provide? Some advisors only offer investment planning, while others take a whole life approach. As an example, Certified Financial Planners (CFP) have a process that looks at your overall goals and creates a written plan that addresses the wealth gaps to get you where you want to go.
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What does a financial plan look like? Of course every plan is different and should be tailored to the individual investor. However, ask to look at a sample portfolio or investment plan. Find out how the advisor approaches the planning process and communicates with clients. Ask if or why you need a plan, you may not depending on your needs. Also be sure to ask for client references—and then check them.
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What is your investment approach and how do you choose investments? It’s important that advisors have a process of how investments are chosen and deployed in an asset allocation. Your advisor should be able to explain how and why a particular investment is chosen. Discover their buy, sell and rebalance disciplines. It’s easy to buy investments, it’s the discipline of when and why to sell that are keys to better performance.
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What is your communication style? Some clients are very financially savvy while others appreciate a bit of hand-holding and education. Will your advisor and his or her team take the time to thoroughly explain the markets, the investing rationale—and any other questions that you may have? At times of market stress, how does the advisor communicate?
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How are you compensated? Some advisors are strictly fee-based, while others earn their living by commission or from selling an investment product. Ask if there are any conflicts of interest which would motivate the advisor to do something that’s not in your best interest. Be sure all fees are disclosed and if you’re unsure about something—ask!
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What makes the investment team unique? We ask these questions when we buy a car, hire a contractor, or work with a personal trainer. An investment advisor should be no different. Ask them how they define a successful relationship. If your advisor can’t explain in clear language why they are different and how you will benefit from becoming a client, move on.
Know When It’s Time to Change Advisors
You may have been with an advisor for many years and have not been particularly satisfied. But sometimes it seems easier to stay with them because change can be just as difficult. Stop and take a minute to see if any of these points apply:
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Lack of communication: A good advisor is always available for clients—by phone, email or appointments. If your advisor isn’t keeping you in the loop, it’s time to look for someone else.
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Pushing products instead of giving advice. One size does not fit all. Your financial plan should be tailored to your specific goals. Avoid advisors who recommend cookie-cutter products or plans.
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Not being proactive—or reactive. A year or two of lackluster performance isn’t cause for alarm. Those are things that an advisor cannot completely control. However, if your performance returns continue to be out of line with your risk tolerance or goals, be sure to discuss re-vamping your investment strategy. And, if you come away feeling that your advisor isn’t listening, consider making a change.
At JJ Burns & Company, we believe a good advisor is truly your partner in your long-term financial success. Talk to us about how we can help you reach your goals.
June 1, 2016 2:38 pm
Published by dylan
[Update: For those who couldn't attend, you can watch the webinar video here.]
Will the Fed raise interest rates in June? How will the U.S. presidential election affect the market and your portfolio?
After a challenging start to 2016, the markets have improved. Issues surrounding a potential interest rate hike, U.S. elections, Brexit, and China continue to influence economic and corporate earnings growth. Find out how these challenges will impact investment portfolios in 2016.
Join JJ Burns & Company on Wednesday, June 8th at 1:00 pm EST for a complimentary webinar to discuss the 2016 Mid-Year Economic & Market Outlook. During this live presentation, CEO JJ Burns, Managing Director Anthony LaGiglia, and Chief Investment Officer Steven Mula will review our outlook for the next 6 months.
Bonus: All registrants will receive a link to the on-demand version of the webinar following its completion.
In this 30-minute webinar we'll talk about:
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The recent market correction and our economic outlook for the rest of 2016
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Issues affecting the stock market such as potential interest rate hike, U.S. elections, Brexit, and China
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How we construct investment portfolios to take advantage of volatile markets
Plus we’ll also answer questions from attendees.
Don't miss this informative event! Reserve your spot today.
