Retirement

2020 Mid-Year Client Update

2020’s been a heck of a roller coaster, so before we dive into mid-year thoughts, here’s some fun trivia:

 

Did you know you have to count to 1,000 before you’ll find the letter “a” in a spelled-out number?

 

We thought you could use that break from the torrent of commentaries on 2020’s bipolar extremes. The general theme has been how quickly global markets sold off and came back – even as economic and sociopolitical headlines continued to stoke bonfires of ongoing upheaval.

 

And the year is only half over.

 

We’ve seen comparisons to Rip Van Winkle, who could have slept through the extraordinary turmoil and awakened in June with only minor changes to his 60/40 stock/bond portfolio. 

We’re also seeing predictions that 60/40 portfolios have entered into a lost decade of paltry performance.

Still other forecasters (perhaps to cover all grounds) suggest we’re in a time with “equal reasons for caution and optimism.”  No kidding.

 

As usual, everyone has something to say.

 

So, what’s it going to be for the rest of 2020? As always, with respect to your investments, let’s not make any assumptions or firm expectations as an encore through year-end. Instead, let’s agree with Jason Zweig, who wrote in his recent “Intelligent Investor” e-newsletter:

 

“The first half of 2020 should remind us that investing isn’t about conquering markets; it’s about mastering ourselves.”

 

In this context, perhaps our trivial pursuit is not so disconnected after all. We know markets are highly likely to deliver inflation-busting returns to those who can patiently “count to a thousand” while riding out the inevitable downturns. We also know investment “success” can take longer than you might think – potentially much longer.

 

(Clients:  Know this is already factored into your plan.)

 

Similar to what you might have first guessed about the elusive “a” in our numbering system, the initial assumptions we make about investing are often off-target until we take the time to think them through (or learn from others with relevant experience). As such, we continue to remind you of the evidence on how to persistently participate in markets, lost and found.  We also continue to recommend allocating your wealth appropriately (for you) between the market’s higher-risk, higher-expected-return investments, and the sheltering calm of more stable, but lower-returning holdings.  

 

(Again, based on your plan, especially if we are creating retirement income for you at this time.)

 

Have we mastered the right balance for you and your personal financial goals? If not, let’s discuss. In the meantime, let others “conquer” the markets, as you consider these additional words from Zweig:

 

 “To be an intelligent investor is to recognize that you’re in a lifelong struggle for self-control – an unending effort to keep yourself from yielding to fear or greed, believing that you know what the future holds or letting short-term news knock your long-term plans off track.”

 

 

Thanks to Peter Pryharski for sharing their work on Unsplash.

Please Note:  Speak to your tax, legal or financial advisor for specific advice about your particular plans and situation.

John Bubello Retirement Financial Advisor

John R. Bubello CFP®

I specialize in Retirement Planning & Investment Management.

My clients worry less, maximize their money, avoid mistakes and retire with clarity and confidence.

The Retirement Income Blog

Advice and perspective for the soon-to-be-retiree

Creating a retirement plan requires making some complicated decisions about our financial lives.

But complicated doesn’t have to mean confusing

My goal is to break down key decisions and concepts, frame them in the context of your retirement, and help you make smart, confident decisions about your retirement.

Because you only retire once.

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Copyright © 2020 | All Rights Reserved.

John R. Bubello is an investment advisor representative of and offers investment advisory services through Compass Retirement, LLC, a registered investment adviser offering advisory services in the State of Connecticut, State of Florida and other jurisdictions where registered or exempted.