Podcast

Financial markets have posted notable gains month to date.  And market optimism concerning the US elections has been amplified this week by hopes for a COVID vaccine.  A key question for investors now is whether news of a vaccine will be enough to push risk assets higher through year-end, even as accelerating COVID infection rates threaten an already fragile economic recovery.

Without a doubt, the news of a means to quell the spread of this year’s deadly virus is a positive development for our healthcare system, our economy, and the markets.  However, of particular concern remains production and distribution obstacles related to getting the vaccine out to those who need it most.  These enduring questions mean that the healthcare crisis is likely to intensify before it gets better.

Even so, we believe that the recent vaccine news combined with prospects of a concerted national response to the pandemic and potentially trillions of dollars in additional fiscal spending signals that light is beginning to shine at the end of the tunnel. If hope holds out, and the economy largely remains open, then the current market rotation into cyclical sectors could continue ahead of an economic recovery next year.

The outcome of next month’s Presidential Election is likely to be of great consequence for the US economy and financial markets. Given former Vice President Joe Biden’s recent gains in the polls, it’s possible that the market narrative driving markets could turn if Biden clinches a victory in November.

This narrative shift means that investment strategies that may have worked over the past six months could struggle to maintain their momentum as we move into the coming year. That’s why regardless of your political leanings, we believe that it is critical now more than ever to consider how a change in the White House might affect your investment portfolio in the coming years.

In either case, in the days leading up to the election, markets are likely to ebb and flow along with a host of unknowns. As an investor, you may be rethinking your market risk exposure or even contemplating exiting the markets altogether before election day. In this week’s podcast, we discuss why whatever the outcome might be, November 3rd is likely to mark a turning point for the next chapter of the dominant market narrative.

How certain are you that you’ll achieve your crucial financial goals? Even if you’ve had the most basic experience preparing for the long-term, you likely know that having the right financial target in mind for retirement, financial independence, or a big-ticket purchase is vital to a successful planning outcome. But did you know that basing your financial allocation decisions on a static, unchanging view of the world might leave you gambling with your financial future?

Indeed, understanding how your financial target may rise or fall based on shifting financial and economic conditions or varying lifestyle preferences is vital to the success of achieving your long-term goals. So, how can you sift through these varying factors and identify the right savings target for you? That’s where two techniques – scenario analysis and Monte Carlo simulations – play critical roles.

Rather than coming up with one fixed solution, you can use these tools to choose from a host of possible outcomes, enabling you to make more informed planning decisions and likely increase your chances of success as you prepare for the future.

Is US dollar dominance poised to end, and what might it mean for your finances?  Uncertainties surrounding US dollar strength have been top-of-mind for some individuals for many years and for a good reason. A significant decline in our nation’s currency could lead to higher prices for the goods and services you consume and make it more expensive to borrow money for big-ticket purchases like a house or a new car.

Today, there is a sensible argument to be made for a diminished worth of the US dollar. Ballooning government borrowing, massive central bank money printing, and the decline of US geopolitical influence suggest to some that the end of the dollar’s global dominance may have finally come.  Some individuals even point to a near-term rise in gold prices and a falling exchange rate as evidence for such a move.

That being said, the dollar’s role is more nuanced than such simple near-term explanations would presume. For now, evidence suggests that the dollar’s prominence is likely to remain in place for many years to come.

Even so, the growing importance of the euro and Chinese yuan over the long-term could reduce the world’s dependence on the dollar.  So, what does this mean for your money? A structurally weaker US dollar might lead to higher future living costs and is a vital reason why your savings should account for rising inflation.

Cash is king. During times of uncertainty, having cash on hand can make the difference between financial stability and the host of issues that come with insolvency. That’s why regardless of your current financial situation, having cash options can not only help keep you solvent, they can also ensure that you stay on track right toward your crucial life goals. So, what can you do to raise cash if you have little money in the bank?

Without a doubt, there are many tools and techniques that you can utilize to generate cash and boost your emergency reserves. Today, we’ll outline five practices that you can apply to come up with a few hundred or a few thousands of dollars when you need it. It’s crucial to note that each option has its own set of benefits and tradeoffs. Even so, keeping track of the resources available to you before you need them can help ensure that your finances stay on track, no matter what issues life throws your way.

Should emerging markets have a place in your investment portfolio? In today’s low yield, low growth environment, some investors are looking outside of the US to generate extra returns on their savings. For some individuals, emerging markets appear attractive on the surface, given their historically robust economic growth rates and higher bond yields. Indeed, there’s a strong fundamental case to be made for investing in emerging markets.

Yet the task of finding the right opportunities can seem daunting, given the overwhelming differences between markets and risks in this space. Given these issues, you might be asking yourself if emerging markets are right for you. Well, finding the right opportunities likely won’t be easy. Even so, if you have a long investment time horizon, a higher tolerance for risk, and a willingness to learn more about this increasingly relevant part of the world, then investing in emerging markets might be one way to diversify your investment portfolio

The road to retirement is not as straightforward as it used to be. There was a time when simple metaphors, like the three-legged stool of retirement, captured how you could achieve retirement security with ease. This concept illustrated how securing a good pension, obtaining a solid return on your savings, and relying on social security might have paved the way for financial comfort in your golden years. Relying on just one leg could lead to failed retirement goals, while relying on two legs requires a delicate balancing act.

Unfortunately, for many individuals, this seemingly secure approach to retirement planning has all but disappeared. And today, few simple metaphors exist to describe an easy path toward retirement security, leaving many people scrambling to figure out how to plan for their future thoughtfully. Now, with a little extra work and some creativity, you might be able to repurpose the components of the simple three-legged stool framework to suit your individual goals in this complex and challenging economic environment.

Eliminating student loan debt can put you on the fast-track to achieving your essential life goals. If you’re one of the millions of Americans struggling with this vital issue, you know first-hand the challenges of student loan debt. As student loan balances continue to balloon from one year to the next, what can you do to conquer this overwhelming debt load? Well, many people are waiting for an act of congress to make their student loans disappear.

Yet, chances are that it will be on you to forge a path toward financial liberation. If you’re serious about freeing yourself from student loan debt, you’ll need to take steps that you might not have considered before. In this week’s podcast, we’ll discuss how evaluating how much minimum payments on your student loans cost you, curbing unnecessary interest expenses, and finding simple ways to come up with extra cash to pay down loan principal can put you on the fast track to financial liberation. Making these steps a priority might enable you to eliminate debt sooner and give you the ability to focus your efforts on your most essential life goals.

Many investors know that managing volatility is central to achieving essential financial goals. But how much should you worry about volatility, and what can you do to prepare for it? Volatility represents the ups and downs of asset prices over time. And quite often, it’s not the volatility that you should be worried about as it is periods of heightened market volatility.

What’s more, human expectations about the future tend to influence asset price movements. And it’s during periods of changing expectations and uncertainty that asset prices swing wildly. In this week’s podcast, we discuss how being aware of the narratives driving the markets and having a plan in place before they change is central to financial success. The bottom line is that if you’re unprepared for periods of heightened volatility, you might be exposing your savings to unnecessary losses.