The Benedict Brief: September 2020

The Election and the Stock Market

The months leading up to a presidential election is one of my least favorite times. The non-stop political ads, the unsolicited phone calls and text messages, and the never-ending arguments on social media can be stressful and overwhelming. It almost seems the election season tends to bring out the worst in some people.
But this Benedict Brief is not about personal preferences, it’s about the election and the stock market. We’ve received a lot of questions over the last few weeks regarding this topic, so we thought we should share our thoughts on the subject.
A typical question is something like, “Should we get out of the market before the election?”
Most of you probably know our answer to that question, but let’s look at some facts and history:

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The Benedict Brief: April 2020

The Dreaded March Statement

As we are all painfully aware, this month has been an exceptionally difficult time in the investment markets and could go down as one of the worst months in stock market history.  The COVID-19 pandemic has continued to spread causing global economies around the world to literally shutdown in an effort to contain the virus.  In addition to the thousands of virus-related deaths, the economic impact is unprecedented and the uncertainty of it all has taken its toll on global investment markets.Read More

Our Strategy For Getting Through This Market Volatility

The fears surrounding the COVID-19 virus continue to spread and the extent of its impact on the global economy is uncertain. Certain industries and sectors will suffer more due to cancellations, travel restrictions or outright travel bans. Add in the severe drop in oil prices due to production disagreements between Saudi Arabia and Russia, the collapse in bond yields due to a flight to safety in Treasury Bonds and the result is a declining market that has officially entered correction territory.

We believe in having a plan and a strategy to help deal with fear and uncertainty rather than just reacting emotionally to the news.

So, what is our strategy to deal with this market volatility?

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The Benedict Brief:
February 2020

The fears surrounding the Coronavirus outbreak have been building for the last few weeks, but those fears just hit the market this week. The markets have experienced a sharp selloff this week resulting in a 10% correction in the broad S&P 500 Index, it’s quickest correction in history.
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Demographics and Your Investing Success

We have all been hearing this for years… how the aging baby boomers will impact our economy. Here is a chart that illustrates the potential impact. The “baby boomers” are getting old! They will draw on our resources like no generation has done before them. They are collecting social security benefits and are likely to draw them for a long period as their life expectancies are likely to extend past previous generations. They are using Medicare benefits and are likely to use the benefits for a long period of time. Also, most of the medical costs are a lot more expensive than when previous generations collected benefits. The baby boomers are also paying a lot less income taxes than during their working years as well as FICA taxes (Social Security).
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I’ve Been Following This Strategy…

“I moved my retirement account to the money market sub-account when my account dropped more than ten percent in 2015. I read that is what you are supposed to do.”

When did you re-invest your retirement account?
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Twelve Years with No Gain

Do you have an investment strategy that can survive twelve years with no stock market gains?

Is your basic investment strategy to invest in some sort of index fund that follows a market index?
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The Big Just Keep Getting Bigger

Below is a diagram from Ritholtz Wealth Management that shows the top five companies by market value of the Standard and Poor’s 500 Index and compares them to the smallest 282 companies of the same Index.
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The Rich Guys

If you have traveled around the country a little, you may have toured the “estates” of some rich corporate barons from the past. The Carnegie Mansion, the Biltmore Estate, The Getty Villa, etc. These gentlemen made their money from the manufacture of steel or the pumping of oil. Other historically wealthy men made their wealth from real estate, mining or many other areas.
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