Advice for Savvy Retirement Planning

Snapchat Stock

Snapchat parent company Snap Inc. (SNAP) initiated their public offering on Thursday amid a flurry of interest in their stock. According to their IPO documents filed Thursday, Snapchat lost roughly $514 million dollars in fiscal year 2016.

Company Founder and CEO, Evan Spiegel, indicated that it is possible that they “may never achieve or maintain profitability,” due to the financial effort involved in re-investing in their business.

Snapchat StockIn their filing, SNAP indicated that “We began commercial operations in 2011 and for all of our history we have experienced net losses and negative cash flows from operations. If our revenue does not grow at a greater rate than our expenses, we will not be able to achieve and maintain profitability.”

The loss of $514 million in 2016 comes against revenues of roughly $400 million. So they are still losing FAR more than they are bringing in on an annual basis. Despite increasing revenues from $58 million in 2015 (compared to a net loss of $372 million), their losses continue to widen.

By comparison, when Facebook launched their IPO in 2012, the company was already profitable, to the tune of $1 billion a year (against a $100 billion+ valuation for it’s IPO).

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About Robert Henderson and Lansdowne Wealth Management

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog, The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

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The British Are Leaving!

Brexit!

Markets around the world on Friday are reeling from the historic vote that will launch the U.K. back into independence from the European Union, and saw British PM David Cameron resign his position. In a tightly contested vote, having originally been projected as a “Stay” outcome, currencies and stock markets across Europe and all over the world are opening sharply down this morning. The vote was followed by the single worst crash of the British Pound against the U.S. Dollar in history.

BrexitIn pre-market trading, U.S. stock market futures were down across the board over 3%, with 10-year Treasury yields down nearly 8%. European markets are all across the board, with the German DAX Index down over 8%.

Not unlike many short-term market setbacks, what is driving the currency and market drops worldwide is the intense level of uncertainty surrounding the British exit. Separation from the European Union would take years to accomplish, and could face many hurdles along the way. It is quite possible that British leaders could renegotiate terms of the deal, and even present a new vote, which could cause citizens to switch their vote.

The short to mid-term implications for the markets are increased volatility, on a significant scale. However, there is no indication that this is any reason to panic or begin selling positions in response to the vote. While there may be tremendous uncertainty and volatility in the short-term, this is unlikely to have long-lasting implications for the global economy.

This morning we are looking closely at cash positions in portfolios, eyeing opportunities to enter quality stock positions at very good prices. In addition, this is a great opportunity for adjusting stock/bond allocations, as the substantial drop in Treasury yields will precipitate a rise in bond prices. This could potentially set up a situation allowing us to sell bonds at high prices, and enter quality stock positions at distressed prices. Much will depend on how markets behave throughout the day.

We will keep you updated as the Euro situation unfolds.

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About Robert Henderson and Lansdowne Wealth Management

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog, The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

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An Important Market Update – Is the Sky Falling?

The Sky is Falling

Well, not quite. In the past week, we have seen the S&P 500 (the broad U.S. stock market, generally speaking) drop roughly 7%. This represents nearly the entire drop in the S&P on the year. Prior to this past week, the market was more or less flat year-to-date, oscillating up and down after a strong start to the year. Foreign markets are faring no better, and in many cases dropping precipitously. Such is the case with China’s Shanghai Index, down more than 40% from its peak in June. On an intra-day basis (prior to intra-day recoveries), the S&P actually dropped into correction territory (down 10% from peak).

What’s Causing the Corrections?

Unlike major corrections, the current drop is being fueled by a number of factors. But the primary drivers seem to be weakness in the Chinese economy, concerns about the Fed raising interest rates, and the current weakness in oil prices. But the reality is that, despite all the speculation, nobody really knows why the market moved the way it did the past several days. Realistically, it was nothing more than pent up market emotions coming to a head.

Moments like this demonstrate the importance of a well-diversified portfolio. Over-reliance on any particular asset class, sector, or “theme” can wreak havoc on a portfolio. At the same time, significant selloffs create an opportunity for investment managers to buy quality investments at a discount, or at least at a reasonable price.

What’s The Outlook?

While the continued global economic recovery has been slow and gradual, it has also been consistent (and persistent). From the perspective of most economists, virtually nothing has changed about the overall economy to prompt any type of bear market scenario. Employment continues to improve (albeit slowly), consumers are continuing to spend, and debt levels are not considered a problem.

Fortunately, unlike recent bear markets, there is no major impetus for concern. Oil prices could certainly be a problem, but the upside of low oil prices is more cash in consumers’ pockets to spend. We’ve been talking about Fed rate adjustments for years, so most of that concern should be emotionally priced into the market. Of course it all falls back to China. A major downshift in economic activity in China could have wide implications. But despite that, the US economy still looks robust.

The bottom line is that there is no tech bubble bursting like we saw 15 years ago, and no subprime mortgage crisis to contend with. What we have is a fear about prices. Investors are concerned about being caught with over-priced assets in an over-priced market. But other than during market bubbles, high stock market prices are generally not a cause of major stock market declines. What we CAN expect is continued volatility, well into the fall.

What it Means for Portfolios

Not a lot. It’s important not to make knee-jerk reactions to what are periodic and normal market drops. The markets has gone up relatively uninterrupted the past seven years, with a handful of material drops along the way, most notably in April 2010, August 2011, May & October 2012, and September 2014. So this drop seems right on schedule. While it may prove to be nothing more than a routine pullback, it could certainly evolve into something a bit more sinister. History would not suggest that, but it’s not beyond possibility.

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

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Connect with me on FacebookGoogle+LinkedInPinterest and Twitter.

 

 

Market Update for May 2015

Robert HendersonMAY 2015 ECONOMIC COMMENTARY AND CAPITAL MARKET UPDATE

Recap: The U.S. economy grew at a 0.2% annual rate in the first quarter. It was the worst economic performance in a year, with evidence of a slowing international trade sector and anemic business investment. A sharp deceleration in hiring in March also ended a year long stretch of heady job creation, raising concerns about broader economic growth amid mounting evidence of a slowdown. Closely watched indicators of consumer spending, capital investment and manufacturing output have all slumped in recent months. A strong dollar has restrained U.S. exports and could continue to drag down broader growth. Much of the recent sluggishness may be chalked up to harsh winter weather across much of the eastern U.S., but the signs of weakness don’t end there. The spending boost from cheaper gasoline appeared to have faded or at least not materialized yet. Low oil prices have led to oil-field layoffs.

Despite these poor numbers, the weakness in consumer spending can be chalked up to weather related effects since underlying economic fundamentals remained on solid ground. Monthly employment figures have averaged 275,000 jobs a month over the last twelve-months – its strongest pace in 15 years – while the unemployment rate has steadily edged lower. Helping to accelerate employment gains have been the number of job openings that have reached new cyclical highs with each passing month. Moreover, as employment opportunities have become increasingly plentiful, the number of people leaving positions for new opportunities has also hit new post-recession highs, highlighting the impact that improving labor market conditions have had on overall sentiment.

This confidence has manifested in consumers, as evidenced by the Conference Board’s Consumer Confidence index, which surged to 101.3 in March before dropping slightly in April. This rise in consumer confidence alongside gains to household income appeared to have filtered through to vehicle sales in April.

Housing data has also started to show signs of a spring thaw. Pending home sales have increased while mortgage applications have also turned decisively higher in recent months. And while housing construction data has remained soft so far this year, building permits – a leading indicator for housing starts – has continued to point to a pick-up in building activity in the months ahead. Putting all of these factors together makes a solid case for an uptick in economic growth over the remaining three quarters of 2015.

GDP: Real GDP grew by just 0.2% (annualized) in the first quarter of 2015. The downturn in economic growth reflected a number of one-off factors. Harsh winter weather had its impact on consumer spending as well as the delivery of equipment and inputs to production. Second, the West Coast dock workers’ strike disrupted supply chains and again altered the strength of consumer spending and production. Third, the one-time shock of lower oil prices influenced the pace of business investment for equipment and structures as well as energy sector hiring and, ultimately, corporate profits. More lasting has been the impact of the rising dollar, which continued to weigh on net-exports and likely will do so in the quarters ahead.

Q1 2015 GDP Growth

Q1 2015 GDP Growth

 

Going forward, economic activity is expected to pick up in the second quarter as the adverse impact of temporary factors, such as poor weather and the West coast port disruptions subside.

Retail Sales: Retail sales rose 0.9% (month-over-month) in March. Gains were broad-based, with 9 out of 13 sub-components rising in the month. Besides autos, sales of building materials and garden equipment also delivered sizable gains. After rising in February, sales at gas stations fell 0.6%. Reflecting declining prices, sales at gas stations have fallen for 9 out of the past 10 months.

Following three consecutive monthly declines, consumers staged a comeback in March, with both headline and, more importantly, core numbers posting gains. Given the rebound in March, consumer spending should continue to rise in the months ahead, supported by robust real income growth, high consumer confidence and improved household balance sheets.

Q1 2015 Retail Sales

Q1 2015 Retail Sales


ISM manufacturing index:
The combination of harsh winter weather, the West Coast port stoppage, plunging oil prices and the soaring dollar has proven to be a devastating mix for the nation’s factories. The Institute for Supply Management (ISM) manufacturing index fell by 1.4 points to 51.5 in March, marking the slowest pace of expansion since May 2013. Eight out of the index’s ten subcomponents edged lower in the month. The backlog of orders, employment, exports and imports led the declines. New orders and inventory also retreated with inventories falling more than the new orders. The spread between the two—which tends to be a leading indicator of future activity—has widened ever so slightly, increasing from 0.0 to 0.3 points.

This is the fifth decline in the ISM manufacturing index in as many months. While the index still remains above the 50-point threshold, which corresponds to expanding manufacturing activity, ongoing declines suggest that the pace of expansion has continued to taper. However, the steady rise in real disposable income growth in the United States—supported by robust job growth and low inflation—will induce higher spending in the month’s ahead, providing support to American manufacturers.

Q1 2015 ISM Manufacturing

Q1 2015 ISM Manufacturing


ISM non-manufacturing index:
The ISM non-manufacturing index edged slightly lower in March to 56.5. However, as the value remained well above 50, it is in the expansion zone and indicates moderate economic growth. There was an increase in new orders and backlogs and the employment index. Prices paid rose for the first time in three months, suggesting some firming in inflation.

The modest decline in the non-manufacturing index over the past few months indicates that the manufacturing sector has taken the brunt of the dollar’s appreciation and port-related disruptions, while the service sector has been affected much less.

Q1 2015 ISM Non-Manufacturing

Q1 2015 ISM Non-Manufacturing


Inflation:
Underlying U.S. inflation appeared to be firming despite slower economic growth, a potentially reassuring sign for the Federal Reserve as it weighs when to start raising interest rates. U.S. consumer prices increased for the second consecutive month in March after falling through much of the winter. The CPI increased 0.2% in March from a month earlier that matched the increase the previous month, which was the biggest rise since June.

The overall price gauge has trended downward since last summer when oil prices began to tumble. But the momentum appears to have shifted. Stabilizing energy prices have helped recent headline inflation measures move higher. This shift is expected to continue in the coming months as the early effects of low oil prices wane further. On the other hand, the core prices, excluding the volatile food and energy categories – have climbed 1.8% over the past year, reflecting higher costs for housing and medical care.

Small Business Optimism index: The NFIB’s small business optimism index unexpectedly declined in March, falling by 2.8 points to 95.2. All 10 of the major sub-components recorded declines in the month, with the largest deterioration coming from the percent of firms expecting the economy to improve and current job openings. The net percent of surveyed firms expecting to increase employment make new capital outlays and boost inventories over the next several months all recorded sizeable declines

The pullback in the percent of firms planning to hire is particularly discouraging, especially coming on the heels of last month’s weak payrolls report. Given the forward-looking nature of this subcomponent, the decline in March suggests that there may be more than lagged weather effects weighing on last month’s slowdown in employment.

Going forward, the overall economic backdrop should remain favorable for small and medium sized businesses. This is because of favorable accessibility to credit, a low interest rate environment and low commodity prices. These factors should provide a boost to overall household income and, in turn, support future sales growth.

US Dollar: For most of 2015, the dollar continued to rise rapidly. According to the Wall Street Journal SJ Dollar Index, the U.S. currency strengthened 12% against rivals in 2014, and gained more than 8% through the end of April. But the dollar’s rally has faltered in recent weeks. Despite the recent pullback, we still expect the dollar to appreciate as the U.S. economy maintains a faster growth rate than that of Europe and Japan though the rate of ascent should slow. The euro and yen will continue to struggle under powerful monetary easing measures, ranging from low – and even negative – interest rates to massive government asset purchase programs.

Trade: The U.S. deficit in trade in goods and services surged from $35.9 billion in February to $51.4 billion in March. Both exports (0.9% M/M) and imports (7.7%) rose in the month, with far greater movement in the latter. March’s sharp decline in the deficit was impacted by the port disruptions on the West Coast. However, there were also other reasons for lackluster export growth. Specifically, slow growth in some of the country’s major trading partners and the appreciation of the dollar, which rose more than 15 percent on a trade-weighted basis between the end of June 2014 and mid-March 2015.

In terms of the second quarter, this trade number starts the economy on a very poor footing. Even with a large upward turn in monthly indicators, second quarter real GDP growth could come in at a relatively subdued level, which would mean a weaker first half of the year than in 2014.

Fed: The Fed has attributed the economy’s sharp first-quarter slowdown to transitory factors, in effect signaling an increase in short-term interest rates remains on the table; although the timing has become more uncertain. The Fed now needs time to make sure its expectation of a rebound proves correct after a spate of soft economic data. The chances of a rate increase by midyear have diminished.

The Fed sees the risks to the economic outlook as balanced—an important sign that they aren’t at this point alarmed about the first-quarter slowdown. They believe that conditions are ripe for consumer spending to pick up in the months ahead, in part because employment, incomes and confidence have risen and falling gasoline prices have boosted household purchasing power.

International: So far, the European Central Bank’s quantitative easing program appears to have been successful at shoring up confidence and boosting economic activity in the Eurozone. Much of the impetus has been related to the sharply lower euro, which has declined over 20% in the past year. The lower currency has boosted exports. With imports unchanged, this has left the trade surplus higher for the single-currency area. Industrial production also surprised to the upside in March. The lower euro has helped inflation, which has remained slightly negative on a year-over-year basis as a result of lower energy costs, but appears to be turning the corner in light of stronger core measures.

The rest of the global economy is still adjusting to a new, more challenging, economic scenario created by the continuous slowdown in growth of the Chinese economy and by the recent collapse of the price of crude oil. The economies that are suffering most are those that have relied heavily on exports of commodities to China and the rest of the global economy. Those economies will now need to rely more on their domestic consumer markets to do the heavy lifting as external markets will remain constrained for some time. However, this is easier said than done, as many of these economies also relied on the revenues generated by this growth in exports to fund domestic demand.

But not all of the developing countries will be able to easily adapt to this new environment. Those countries that are linked more to the U.S. economy will continue to see relatively strong economic growth but those that relied more on the rest of the global economy will continue to lag behind. At the same time some of these countries put forward policies that were good in times of prosperity but that today are called into question. Perhaps the case of Brazil and its industrial policy is the most vivid example of policies gone awry with the scandal unearthed over the past several months regarding payments for projects contracted by Petrobras.

Outlook: The U.S. economy has been gathering steam, with evidence mounting that it will bounce back up in the second quarter. Auto sales rebounded strongly in recent months, after being depressed by weather in January and February; the housing market has shown signs of a spring thaw; and consumers have remained confident. The job market took a bit of a breather in March, but one months’ weak jobs tally needs to be put in the context of months of very solid hiring and a very harsh winter. Strength in the U.S. labor market will underpin the best pace of consumer spending in a decade in 2015.

Real disposable income should to rise in 2015 with gains reflecting the fundamentals of better job and compensation growth along with lower inflation. Meanwhile, continued gains in household wealth via financial assets and real estate should also support stronger consumer spending, as will easier standards for obtaining consumer credit.

Equipment and structure spending will bear the brunt of the decline in energy and other commodity prices. The slowdown in equipment and structure spending will reflect reduced investment in the mining and energy sectors. However, we do not project this weakness into a national slump as business credit continues to ease and other industries are in stronger positions to increase capital outlays.

Housing starts and residential investment should continue to improve over the course of the year. In addition, government spending continues to exhibit a turnaround after three years of negative impacts on growth.

Net exports are also in a turnaround situation—but this time there is flip from positive to negative. Both income and price effects have been negative. Weaker income effects reflect the sluggish global economic outlook for key trading partners. The price effect reflects the rise in the U.S. dollar exchange value. Add to these the fact that American consumers will boost imports, and the net effect is a negative impact on net exports and GDP growth.

Year-over-year inflation will continue to rise in the year ahead. The base effect of lower energy prices in 2014 will begin to drive up reported year-over-year numbers later this year. The FOMC will likely begin to lift the federal funds rate in the third quarter and we expect that the long-end of the Treasury yield curve will rise, but only partially, in response to a higher funds rate. However, we also anticipate that the credit cycle is ahead of the economic cycle, and decision makers need to be vigilant that investment decisions reflect the rising cost/declining quality of credit going forward. Corporate profit growth should overcome the energy hit and resume its 4%-5% pace for 2015. Finally, US dollar strength should persist over the remainder of 2015.

Sources: The Conference Board, NFIB, Wall Street Journal, Department of Commerce, Department of Labor, Institute for Supply Management

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at Your 401K http://www.lwmwealth.com/services/your401k.html.

See my Google+ Profile

Connect with me on FacebookGoogle+LinkedInPinterest and Twitter.

 

Best Financial Posts of the Week…07-22-13

Here is a roundup of some of the best posts of last week on the web:

Weighing the Week Ahead: It’s All About Earnings – Jeff Miller
http://oldprof.typepad.com/a_dash_of_insight/2013/07/weighing-the-week-ahead-its-all-about-earnings.html

Slower Growth Ahead for Emerging Markets? – Nouriel Roubini
http://www.project-syndicate.org/commentary/slower-growth-ahead-for-the-brics-and-other-emerging-markets-by-nouriel-roubini#HxZGAU62oWdjshht.99

The Era of Permanent Alimony May Be Coming to an End – Josh Crank
http://blogs.lawyers.com/2013/07/end-of-permanent-alimony/

Is This 2007 Redux? – Lance Roberts
http://advisorperspectives.com/dshort/guest/Lance-Roberts-130719-2007-Redux.php

Second Quarter Earnings Are Coming Up Short – Michael Lombardi
http://advisorperspectives.com/dshort/guest/Michael-Lombardi-130719-Q2-Earnings.php

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is a Certified Divorce Financial Analyst® and an Accredited Asset Management Specialist. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

Fee-Only Financial Advisor in CT

Financial Planners in Connecticut

Lansdowne Wealth Management, LLC (“LWM”) is an independent, fee-only financial planning firm based in Mystic, Connecticut that offers financial retirement strategies backed by education, knowledge, and experience. Our clients depend on us to provide personalized, thoughtful service and advice. As a fee-only Registered Investment Advisor, we present you with objective, independent guidance for achieving your goals. Successful individuals and families in southeastern Connecticut, Rhode Island and throughout the United States rely on us to guide the way so they can be confident in their futures.

Our goal is to provide our clients with the most complete Asset and Wealth Management services available. From the very beginning, our objective is to provide individual investors with the same level of sophisticated management as institutional investors. We are proud to say that the services our clients receive rival that of large institutions.

In addition to providing portfolio management services, we also provide our clients with the opportunity to access our comprehensive Fee-Only Financial Planning and Wealth Management services. More details are provided regarding our Asset and Wealth Managements services in our Services section.

401K Advice in CT

For those individuals that are employed at Pfizer, General Dynamics, or L&M Hospital, we have a unique 401K service that allows us to directly manage their Fidelity 401K assets, without removing their assets from the 401K plan.

Robert C. Henderson is the President and a financial advisor at LWM. Prior to founding the firm, Mr. Henderson was a financial advisor with a nationally recognized brokerage firm. His previous experience included numerous senior corporate financial positions, including Director of Finance and Accounting and Controller positions. Mr. Henderson holds a BS degree in Accounting from Bentley University, earned the Accredited Asset Management Specialist (AAMS) designation from the College for Financial Planning, and is a Certified Divorce Financial Analyst (CDFA).

Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog, The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

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Best Financial Posts of the Week…

Here is a roundup of some of the best posts of last week on the web:

Roger Wohlner, the Chicago Financial Planner, talks about how to Avoid these 9 Investment Mistakes
http://thechicagofinancialplanner.com/2012/08/08/avoid-these-9-investing-mistakes/

Russ Thornton of Wealthcare for Women talks about the importance of the Sequence of Returns in investing
http://www.wealthcareforwomen.com/return-sequence/

Apparently Standard & Poors didn’t think anyone believed that their ratings are “independent and objective”
http://qz.com/101722/sp-amazingly-says-no-one-should-believe-its-ratings-are-independent-and-objective/

Michael Kitces provides some valuable insight on the problem with annuities and potential healthcare shocks
http://www.kitces.com/blog/archives/572-Solving-The-Annuity-Puzzle-Inflexibility-For-Handling-Potential-Health-Care-Shocks-In-Retirement.html

An article by Yours Truly talking about the purpose and value of a Certified Divorce Financial Analyst
http://lwmwealth.com/blog/2013/07/what-is-a-certified-divorce-financial-analyst/

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is a Certified Divorce Financial Analyst® and an Accredited Asset Management Specialist. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

General Dynamics 401K Connection Newsletter – November 2012

401KHere is the November 2012 issue of the General Dynamics 401K Connection newsletter.

The 401K Connection Newsletters are independent evaluations of 401(K) plans that help participants better understand their retirement accounts, the many investment options available to them, and provide them with model portfolios that they are free to follow and emulate at their discretion.  The newsletters are in no way affiliated with General Dynamics, Pfizer, L&M Hospital, or any of their affiliates. They are 3rd party newsletters provided for no cost to assist employees with better understanding and managing their 401K plans. Lansdowne Wealth Management is an independent wealth management firm that has no affiliation to General Dynamics, Pfizer, or L&M Hospital, nor the administrators of their 401K plans, Fidelity and Hewitt & Associates.

Around the first week of each month, subscribers receive our newsletter, customized to their employer (currently General Dynamics, Pfizer, or L&M Hospital). The newsletters are chock-full of useful information to help manage their 401K plan, including market & economic updates, analysis of your retirement plan, feedback on the various investment options, and model portfolios that are developed by our firm using the same strategies and philosophies we utilize for our own private clients. In addition, periodically you will receive articles written by our firm that can be useful in managing other aspects of your financial life, in addition to your 401K. The articles can always be accessed at our blog as well – http://lwmwealth.com/blog/.

To sign up for one of the newsletters, please go here:  http://www.lwmwealth.com/services/your401k.html

Pfizer 401K Connection Newsletter – November 2012

401KHere is the November 2012 issue of the Pfizer 401K Connection newsletter. The Pfizer 401K plan is administered by Fidelity Investments.

The 401K Connection Newsletters are independent evaluations of 401(K) plans that help participants better understand their retirement accounts, the many investment options available to them, and provide them with model portfolios that they are free to follow and emulate at their discretion.  The newsletters are in no way affiliated with General Dynamics, Pfizer, L&M Hospital, or any of their affiliates. They are 3rd party newsletters provided for no cost to assist employees with better understanding and managing their 401K plans. Lansdowne Wealth Management is an independent wealth management firm that has no affiliation to General Dynamics, Pfizer, or L&M Hospital, nor the administrators of their 401K plans, Fidelity and Hewitt & Associates.

Around the first week of each month, subscribers receive our newsletter, customized to their employer (currently General Dynamics, Pfizer, or L&M Hospital). The newsletters are chock-full of useful information to help manage their 401K plan, including market & economic updates, analysis of your retirement plan, feedback on the various investment options, and model portfolios that are developed by our firm using the same strategies and philosophies we utilize for our own private clients. In addition, periodically you will receive articles written by our firm that can be useful in managing other aspects of your financial life, in addition to your 401K. The articles can always be accessed at our blog as well – http://lwmwealth.com/blog/.

To sign up for one of the newsletters, please go here:  http://www.lwmwealth.com/services/your401k.html

Don’t Buy-and-Forget the Investments in your 401K Plan

401K InvestmentsThe buy-and-hold investment strategy for company sponsored retirement plans, such as a 401K plan, has become a relic of the past. Let me re-phrase that: Buy-and-forget investing is a relic of the past.

Read: 401K Contribution Limits

Buy-and-Forget is not an Investment Strategy
I often have prospective clients come to me with a stack of statements…brokerage accounts, 401K accounts, IRA’s, CD’s, and other odds and ends. Invariably, one or several of the accounts have been completely ignored over the years. In some cases, the investment allocations in their company 401K plan account is still invested with the same exact options they chose when they first opened their accounts.

Just recently, I helped a new client re-allocate his 401K funds that had not made a change in over 15 years. It was entirely invested in high-growth (or high-risk, rather) funds that performed superbly – until the year 2000. He had managed to eke out a total return (not annual return) of about 31% – over the course of 15 years. That works out to less than 2% per year (compounded). The technology bubble and growing euphoria for the stock market drove much of the investment gains in the 90’s, a situation which reversed abruptly in 2000, and is not likely to repeat itself anytime soon.

We are currently in an economic environment vastly different from years past. Interest rates are at an all-time low, unemployment still remains remarkably high, and the federal debt is unsustainably high and growing rapidly. The point is, what may have done well 5 or 10 or 15 years ago, is most likely NOT working well today.

READ:
401K Contribution Limits
IRA Contribution Limits

What to do
If you are the type of person that has neither the time nor inclination to regularly review your investments, you need to begin reviewing your 401K portfolios at least once per year. I usually recommend doing this at tax time, since you can get all your painful financial exercises out of the way at once.

The place to start is with your 401K plan provider. If you work for a large company, chances are they may have some great online tools to use to help guide you to an appropriate allocation. But buyer beware; some 401K product providers (brokerage firms, mutual fund companies, and insurance companies) will attempt to steer you towards the products THEY want to sell you. In some cases, these may not be in your best interest, even if they might be considered “suitable” for you. So make sure you are comfortable with the recommendations provided by online tools.

If you do not have the resources of a 401K provider, or are not comfortable taking advice from an online calculator, you can consider seeking out a fee-only financial planner to assist you in creating a simple allocation for your 401K plan.

Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with an added focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog, The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

If you are an employee or retiree of General Dynamics, Pfizer, or L&M Hospital, and you would like advice and direction on managing your Fidelity 401K or Hewitt 401K plan, please sign up for our monthly newsletter, which provides complimentary ongoing advice, commentary, and model portfolios for each of those plans. You can sign up automatically at http://www.lwmwealth.com/services/your401k.html.