THE STAKES ARE HIGH

The stakes associated with fixing your 401K are really high. You and your family have a lot riding on your 401K and IRA.

If your investments continue to underperform, you’ll have a seriously underwhelming retirement. You will be destined to a future in which you’re worried about daily bills, affording your healthcare, and possibly even having to go back to work.

On the flip side, the potential for an extraordinary retirement is as enormous as the risk of a hard one. Most people also don’t understand the opportunity that they’re missing by not fully maximizing their investments.

If you invest your 401K funds properly, you should be able to retire with millions of dollars in your retirement account.

But since people are afraid of getting crushed by the stock market, they put too much money in bonds and cash investments. This allows people to sleep better at night, but it ends up costing them millions in retirement.

People also receive lousy advice when it comes to how best to invest the money in their 401K.  The financial services industry has failed investors like you.  They peddle mediocre solutions and charge high fees.

Assuming that you are funding your 401K properly, the two biggest factors affecting the quality of your retirement are your investment returns and the time your money has to grow.  So, you need to make better investment choices for your 401K, and you need to do it now.  Time is not on your side.

Fear and a lack of knowledge paralyze people and they stay stuck with a bad investing strategy and poor results.  Don’t get stuck in this trap.  You can and should have an incredible retirement. 

Get educated and get the help you need today.

There are three things you need to do to maximize your retirement account:

1.    Learn the investing basics

2.    Choose better funds for your 401K or IRA

3.    Have a proven strategy to protect your savings against losses in stock market meltdowns

We can help you with all three.  Request a free consultation today by scheduling an appointment here.  We can set you up with a customized training plan.  We can review your investments and answer any questions you might have.  And we can create custom retirement projections for you so you can know where you stand.

The sooner you fix your 401K the more money you will end up with.

You deserve better. Your family deserves better.

Schedule your free no-obligation consult by clicking here.

Happy Investing,

Phil

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Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.

Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.

CONFLICTING INVESTMENT ADVICE

 Do you notice how much conflicting investment information there is out there?

Here are some of the varying points of view that we all come across daily:

• Buy bonds.

• Don’t buy bonds.

• Don’t buy funds. 

• Buy individual stocks. 

• Buy international stock funds because the economies in places like India and South America will grow faster than the US economy in the coming decades.

• Don’t buy international stocks.

• We will avoid a recession and this will be a big year for stocks.

• The US economy will be going into a recession in 2024 and stocks will decline by 30% or more as a result.

I could keep going and going with this list.  It seems that no one can agree on anything about investing or the economy.

Why is this the case and, more importantly, what is the average investor supposed to do with all this conflicting information?

There are several reasons why all these contradictions exist.

• Nobody can predict the future with any accuracy or consistency.  It is just too hard to predict asset prices and the economy.  There are too many things (known and unknown) that affect financial markets. 

• The motivation of the forecaster may not be about being correct.  Often, the people who predict things just do it for media attention.  Bold and dire predictions get the most clicks and the most views.  Look for hidden agendas.

• When it comes to investing guidance, people are relying on different facts or theories.  And some of those theories are driven by the interests of the investment industry and not the interests of the investor. 

Because the investing world is so messy and full of conflicting information, it is important for you to:

• Ignore short-term forecasts of things that are too hard to predict like the direction of the stock market, the direction of the economy, the direction of interest rates, etc.  Since investing is a long-term game, this is fine.  Stay focused on long-term data and data that is consistent.

• Understand the data and the facts behind the advice.  Is it just an opinion that is grabbing a bunch of facts to support their opinion?  Or is the advice driven by sound and consistent data and logic that have held up for 30 years or 50 years or more?

• Understand the motivation of the forecaster or expert.  Are they committed to truth and logic or are they going to benefit financially if you believe their assertion.  The Asset Allocation model based on risk-profiling is the financial lifeblood of the investment services industry.  If you believe in their model, then you will need their services and you will pay their fees to help you manage your investments. 

The facts are very clear.  There are several foundational principles about investing that you can rely on:

• The broad US stock market as measured by the S&P 500 will grow by roughly 9% to 10% per year over the long term.

• Large cap, growth index funds can generate 12% to 13% per year in the long run.

• The best you can do with bond funds is about 3% to 4% per year.

• International stock funds have only generated about 6% per year over long periods of time. International stocks also carry currency risk.

• Stock market investments will be very volatile.  In the short-term, stock prices will be move up and down irrationally. 

To be an excellent investor, you need to do just a few things well.

1. You need to take a long-term view.  Focus on your 5-year, 10-year and 20-year returns. Avoid the temptation to win on short-term trading.  Short-term trading is gambling and not investing.

2. You need to invest in the funds that have the best and most consistent long-term performance.  You will not be able to beat the market in the long run by picking individual stocks.

3. You need to invest in a very disciplined fashion.  Avoid emotional investing.

4. You need to have a proven and tested strategy of dealing with the inevitable stock market collapses.
   

Stay Disciplined My Friends,

Phil

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Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.

Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.

MARKET UPDATE AUGUST 2024

After reaching an all-time high on July 16th, the stock market has declined fairly quickly.  The chart of the S&P 500 below clearly shows the reversal in the last two weeks. 

The S&P 500 has dropped almost 9% from its peak and the Nasdaq has fallen almost 14% since its July peak.  As of Monday, the S&P 500 was still up about 9% for the year. 

It is important not to panic at times like this.  These moves are quite normal for the stock market.  Market drops of over 5% in a given year happen 94% of the time.  Market drops of over 10% in a given year happen 64% of the time.   

We would all like to know if this is a minor short-term correction or if this is the start of a bigger move to the downside.  No one knows for sure but the good news is that you are already protected from the worst case if you are one of our Market Signals customers. 

Let’s examine the factors behind this recent decline. 

1. Recession Fears – The market did not like the negative surprises last week for the manufacturing index and the jobs report.  We seem to have quickly moved from inflationary fears to recession fears.  And we know that the stock market overreacts to both good news and bad news. The economy is clearly slowing down, and it has been for a while.  This was to be expected with the Fed interest rate increases.  The Fed appears to be poised to cut interest rates in the near term and the concern would be that the Fed is too late again.  If economic and market data continue to be soft, expect the Fed to lower interest rates sooner rather than later.

2. Japan – The Japanese stock market has fallen by roughly 20% after the Japanese government raised interest rates.  This may have contributed to the selling, but the American economy should be able to get past any short-term bumps in the much smaller Japanese economy.

As I have previously written, the odds of the Fed achieving a soft landing were very low to begin with. It has never been done before.  A soft landing is still a possibility, however, albeit a small one.

Stay Disciplined My Friends,

Phil McAvoy

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Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.

Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.