Tuesday, December 31, 2019

Resolutions You Can Keep


“Peek of the Week”
New Year's Eve Commentary
December 31, 2019


Resolutions You Can Keep

New Year’s resolutions are promises we make to ourselves. It’s old news many people fail to keep those promises. This year, make a resolution or two you can keep. Here are a few ideas:

  • Connect with people without using social media. No texting. No tweeting. No Facebook. Make person-to-person or voice-to-voice contact. You can invite your parents, children, or siblings to lunch. Social contact, live and in-person, “improves psychological well-being, happiness, and is even linked to greater health and longevity.”1
  • Encourage empathy. There has been a decline in empathy (the ability to understand and share another’s feelings)2 since the 1980s, according to new research. That change has been accompanied by a rise in narcissism (self-absorption and an exaggerated sense of self-importance).3 Two ways to encourage empathy are to read for pleasure and to read to young children.4
  • Engage in your community. Get out there and help get something done. Use your special talents to help improve the lives of others. Better yet, get your whole family involved. You’ll be helping to improve your community while teaching your children the importance of giving back.

These can be ambitious and achievable resolutions – and you have 12 months to accomplish one or more of them!

Here’s our promise to you: no matter what specific resolutions you make for 2020, we’re here to ensure you have the information and support your need to make sound financial decisions. The only thing left to do is determine what those resolutions are!


Best wishes for a Happy 2020!

Leif M. Hagen
Leif M. Hagen, CLU ChFC
LPL Financial Advisor






Sources:

v  The above material was prepared by Carson Coaching.
Photo by Nicole De Khors from Burst

Monday, December 30, 2019

Exceptional returns in 2019!


“Peek of the Week”
Market Commentary
December 30, 2019

The Markets

2019 will be a hard act to follow.

Investors may find themselves reluctant to ring out the old and ring in the new this week. During 2019, stock and bond markets delivered exceptional returns.

Ben Levisohn of Barron’s reported the Dow Jones Industrial Average was up 23 percent at the end of last week, the Standard & Poor’s (S&P) 500 Index had gained 29 percent, and the Nasdaq Composite was up 36 percent.  The S&P 500 and Dow both closed at all-time highs.

Bond indices showed gains in the United States and around the world. The Bloomberg Barclays U.S. Aggregate Total Return Index was up 8.87 percent at the end of last week. Its global counterpart, the Bloomberg Barclays Global Aggregate Total Return Index, was up 6.63 percent for the same period.

After a year like 2019, when stock indices delivered exceptional returns, investors’ perceptions about their appetite for risk can change. Great market performance has a way of persuading people their tolerance for risk is higher than it has been in the past. The phenomenon has something to do with recency bias, which is a tendency to remember and weight recent events more heavily than past events.

In other words, during bull markets some people tend to forget about bear markets.

2019 was a wonderful year, but not every year will be like 2019. At the end of last week, the average annual return for the S&P 500 Index over the last 60 years, with dividends reinvested, was about 9.5 percent.

The fact that 2020 may not be like 2019 does not mean it’s time to sell. Successful financial plans and investment strategies should include well-diversified portfolios that are grounded in the investor’s life and financial goals. Every strategy and portfolio should be reviewed periodically and modified when goals have changed, a major life event has occurred, or the investor’s risk tolerance has changed.

If you would like to talk about your strategy and review your portfolio allocations, give us a call. We’d like to hear from you.


Data as of 12/27/19
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
0.6%
29.3%
30.2%
12.6%
9.2%
11.1%
Dow Jones Global ex-U.S.
0.8
18.6
20.6
7.6
3.1
2.8
10-year Treasury Note (Yield Only)
1.9
NA
2.7
2.6
2.2
3.8
Gold (per ounce)
2.2
17.9
19.2
10.0
5.0
3.2
Bloomberg Commodity Index
1.2
6.0
4.6
-2.4
-5.2
-5.3
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

The holidays are almost over. Ahh, the season of good cheer and regifting is coming to an end. Before we head into 2020, the Ohio Department of Transportation deserves a holiday salute for promoting safe driving with holiday humor. About 130 highway message boards across the state offered communications like these:

·         Life is fra-gee-lay. Drive safe.
·         Stay to the right. Santa needs the left lane tonight.
·         If your relatives make you drink, don’t drive.
·         Can I refill your eggnog, Eddie?  -- Clark
·         Deck the halls/ No phone calls/ Fa la la la la
·         Drop the phone. We triple dog dare you.

Weekly Focus – Think About It

“I hope that in this year to come, you make mistakes.

Because if you are making mistakes, then you are making new things, trying new things, learning, living, pushing yourself, changing yourself, changing your world. You're doing things you've never done before, and, more importantly, you're doing something.

So that's my wish for you, and all of us, and my wish for myself. Make new mistakes. Make glorious, amazing mistakes. Make mistakes nobody's ever made before. Don't freeze, don't stop, don't worry that it isn't good enough, or it isn't perfect, whatever it is: art, or love, or work, or family, or life.

Whatever it is you're scared of doing, do it.

Make your mistakes, next year and forever.”
--Neil Gaiman, Author

Best regards,

Leif M. Hagen
Leif M. Hagen, CLU, ChFC
LPL Financial Advisor

P.S.  Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.

Securities offered through LPL Financial, Member FINRA/SIPC.




* These views are those of Carson Coaching, and not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
* To unsubscribe from the “Peek of the Week” please reply to this email with “Unsubscribe” in the subject line or write us at: Hagen Financial Network, LLC.; 4640 Nicols Road – Suite 203; Eagan, MN, 55122.

Sources:

Monday, December 23, 2019

Double-digit gains!


“Peek of the Week”
Market Commentary
December 23, 2019

The Markets

Let’s hear it for 2019!

Major stock indices in the United States and overseas are poised to deliver double-digit gains for the year. Even with uncertainty about Britain’s exit from the European Union (EU), the FTSE 100 boasted a gain of more than 10 percent at the end of last week. That’s not bad for a year which included (in the United States) an inverted yield curve, an earnings recession, and a contentious trade war.

The strong stock market performance of 2019 owes a lot to central banks, and so does the performance of the bond market. Reuters reported,

“…the screeching change of direction by the world’s top central banks, led by the Federal Reserve, which cut U.S. interest rates for the first time since the financial crisis more than a decade earlier…fired bond markets up like a rocket. U.S. Treasuries, the world's benchmark government IOU, have made a whopping 9.4 percent after yields plunged as much as 120 basis points…German Bunds – Europe's safest asset – have had their best year in five years, making roughly 5.5% in euro terms as the European Central Bank has reversed course too.”

So, what lessons should we take from 2019?

Perhaps, we should try to come to terms with loss aversion. When you make an investment decision, it’s important to consider the impact of loss aversion on your thinking. The pain from a loss carries twice the impact of the pleasure from a gain. As a result, fear of loss may affect investment decision making.

2019 offered a great example. During a year of exceptional returns, investors pulled money out of stocks at a record pace because they were worried about recession and other issues. Axios reported,

“Data from the Investment Company Institute shows money has been pulled out of [stock investments] in every month this year except January. In total, more than $130 billion has been drawn from [stock investments] in 2019, making it already the largest year of outflows on record.”

When it comes to investing, uncertainty is normal. It is part of investing. Tolerating uncertainty may help investors earn attractive returns. As a result, our advice is to stay invested even when uncertainty makes you nervous, even when markets are falling.

If you have a diversified portfolio built to help you reach your goals, stay with it, unless you risk tolerance has changed. In 2019, pulling money out of stocks meant some investors missed out on some exceptional returns.


Data as of 12/20/19
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
1.7%
28.5%
30.6%
12.4%
9.2%
11.2%
Dow Jones Global ex-U.S.
0.9
17.6
18.2
7.3
3.0
2.9
10-year Treasury Note (Yield Only)
1.9
NA
2.8
2.6
2.2
3.7
Gold (per ounce)
0.9
15.4
17.4
9.5
4.4
3.0
Bloomberg Commodity Index
1.2
4.8
2.0
-2.3
-5.6
-5.1
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend)
and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of
the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

the secure act may affect your retirement and your legacy planning… Last week, reports indicated the ‘Setting Every Community Up for Retirement Enhancement’ (SECURE) Act was attached to the federal spending bill President Trump signed into law on Friday.

The SECURE Act is intended to expand retirement savings opportunities. Many of its provisions make it easier for Americans to save more for retirement and, also, to convert their savings into income for retirement. The Act will change IRA rules in some significant ways. For instance, Drinker Biddle and Barron’s reported:

·         Contribute to IRA accounts at any age. In the past, Americans had to stop contributing to IRAs at age 70 ½.
·         Begin taking required minimum distributions (RMDs) at age 72. The age for RMDs was pushed to 72 from age 70 ½.

The Act also changes post-death IRA distribution rules, eliminating stretch IRA estate planning strategies. Barron’s explained, “Under the bill, beneficiaries of an IRA would need to draw down the account – and pay income tax on the money – over a decade, rather than a lifetime.” This will affect some legacy planning strategies and necessitate the adoption of alternative solutions.

Workplace plans may change, too. Part-time workers are now eligible to participate in defined contribution plans as long as certain criteria are met. The Act also made it easier for defined contribution plans of all sizes to add lifetime income options to plan investment lineups.

In addition, the incentive for smaller business owners to establish workplace retirement plans increased. Tax credits, of up to $5,000 for three years, can be claimed to offset plan start-up costs. Additional tax credits are possible when new plans include automatic enrollment features or existing plans add automatic enrollment features.

If you would like to discuss how the SECURE Act may affect your retirement, business, or legacy plans, please give us a call.

Weekly Focus – Think About It

“I feel that one of the most important lessons that can be learned is that what we ‘see’ may be different than what is actually in front of us.”
--Mark Singer, Journalist [8]

Best regards,

Leif M. Hagen
Leif M. Hagen, CLU, ChFC
LPL Financial Advisor

P.S.  Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.

Securities offered through LPL Financial, Member FINRA/SIPC.




* These views are those of Carson Coaching, and not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
* To unsubscribe from the “Peek of the Week,” please reply to this email with “Unsubscribe” in the subject line or write us at: Hagen Financial Network, LLC.; 4640 Nicols Road Ste 203; Eagan, MN 55122.

Sources:




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