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Insights



February Planning Action Items

Review your W2 and 1099s with your Independent CERTIFIED FINANCIAL PLANNER TM. Your 1099s and W2s provide valuable information about your earnings and investing habits. If your salary has increased, have you also increased your savings and investment rates? Apply income/salary to living expenses, and bonuses and stock options proceeds to retirement goals. If your mutual funds made sizable capital gains distributions, would you be better off holding low cost, tax-managed institutional funds in your taxable account(s)? Bump up contribution rates
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2020 and Beyond – Where’s Your Focus

Welcome to “Projections Season” where every financial personality and even your friends and family will provide an insight into their crystal ball on how the “market” will perform next year. They will back up their projections with strong data and sound reasoning, yet history continues to show us just how futile it is to spend time predicting any future, much less that of how over 20,000 worldwide securities will perform over the short term. As we move into 2020, I
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How Markets Work and the FAANG Mentality

November 2019 The stocks commonly referred to by the FAANG moniker— Facebook, Amazon, Apple, Netflix, and Google (now trading as Alphabet)—have posted impressive gains through the years, with all now worth many times their initial-public-offering prices. The notion of FAANG stocks as a powerful group holding sway over the markets has sunk its teeth into some investors. But how much of the market’s recent returns are attributable to FAANG stocks? And does their performance point to a change in the
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Talk to Your Advisor

In addition to the usual resolutions, the new year is a great time to talk to your financial advisor, revisit your goals and your long-term plan, and discuss any changes in your life or circumstances. This way, you can make sure that your plan accurately reflects where you are now and where you want to be. A great place to start is the Financial LifeMap below. Your financial advisor — working in close partnership with other experts, such as your
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4 Charts Every Investor Should Know. #1: Let Markets Work For You

Sometimes a picture really can make things easier to understand. Many of the important ideas and concepts you need to know as a long-term investor don’t require lengthy explanations. They can be as simple as the four charts we’ll share in our upcoming Insights. Together, these charts illustrate foundational principles of investing such as focusing on the long term, diversification, and not letting emotions compromise your portfolio. Hypothetical value of $100 invested at the beginning of 1972 and kept invested
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What You Pay, What You Get: Connecting Price and Expected Returns

It has been more than 50 years since the idea of stock prices containing all relevant information was put forth. Information might come in the form of data from a company’s financial statements, news about a new product, a change in the regulatory environment, or simply a shift of investors’ tastes and preferences toward owning different investments. Information is incorporated into security prices through the buying and selling process. While fair prices may not depend on a certain level of
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Tuning Out the Noise

For investors, it can be easy to feel overwhelmed by the relentless stream of news about markets. Being bombarded with data and headlines presented as impactful to your financial well-being can evoke strong emotional responses from even the most experienced investors. Headlines from the ”lost decade”1 can help illustrate several periods that may have led market participants to question their approach. May 1999: Dow Jones Industrial Average Closes Above 11,000 for the First Time March 2000: Nasdaq Stock Exchange Index
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E+R=O, a Formula for Success

Combining an enduring investment philosophy with a simple formula that helps maintain investment discipline can increase the odds of having a positive financial experience. “The important thing about an investment philosophy is that you have one you can stick with.” David Booth, DFA Founder and Executive Chairman AN ENDURING INVESTMENT PHILOSOPHY Investing is a long-term endeavor. Indeed, people will spend decades pursuing their financial goals. But being an investor can be complicated, challenging, frustrating, and sometimes frightening. This is exactly
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The Perils of Trying to Avoid the Worst Days in the Stock Market

Financial markets ebb and flow, and although it is natural to feel excited when stock markets do well and concerned when stock markets drop, it’s not usually a good idea to let those emotions dictate changes to your portfolio. As you can see below, the third-best one-day return occurred only two days after the worst one-day return (stock market crash of 1987). Most investors who bailed out of the markets in response to the crash would have missed a significant
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Sailing with the Tides

Embarking on a financial plan is like sailing around the world. The voyage won’t always go to plan, and there’ll be rough seas. But the odds of reaching your destination increase greatly if you are prepared, flexible, patient, and well-advised. A mistake many inexperienced sailors make is not having a plan at all. They embark without a clear sense of their destination. And once they do decide, they often find themselves lost at sea in the wrong boat with inadequate
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