Archive for June, 2016

Leone’s Money Monitor Monthly For The Month Of June 2016

June 8, 2016

By Edward Leone Jr. CFP RFC MBA DMD

Contact Information:   303-478-6793     edleonedds@gmail.com

It is always interesting to observe the thoughts and methods individuals use in making saving and investment decisions:

  1. using information that supports an opinion or an action without consideration for other available information which may be contrary to desires and expectation
  2. aversion to the emotion which comes with a less than  desirable investment outcome
  3. the tendency to hang on to winning or losing investments for inappropriate time lines
  4. sticking with only popular or well know investment vehicles and avoiding diversification
  5. taking full personal credit for positive outcomes and blaming others for poor outcome while investing
  6. chasing past investment performance with the expectation that such a dynamic is a guarantee of future results
  7. anxiety to the extent that it severely modifies risk tolerance!

We are all human and guilty of such behaviors from time to time. The trick is to examine and modify such feelings when appropriate.

We will do best if we save religiously, invest for the long-term (avoiding high fees and negative tax consequences) and examine risk (use sensible asset allocation and diversify the investment content of a portfolio).

Those who are close to or in the phase of retirement should consider the above and also consider the following as planning strategies:

  1. enjoy and utilize some travel time
  2. have a clear understanding of sources of income and their potential for the future
  3. set up a budget which reflects needs and desires in the day-to-day living during retirement
  4. focus on establishing and updating estate planning documents
  5. plan daily activities which keep you active and engaged in functions of joy and interest.

It is clear that US economic strategies and global economic strategies are still dependent on monetary easing. It will be necessary as I have stated in the past, to embrace meaningful fiscal policy adjustments in the form of tax reform, regulatory reform, deleveraging of debt  and adjustments of government function toward efficiency in order to experience a more significant pace of economic growth. We are seeing market indexes reaching new highs as a result of the oil price increases and the global currency market adjustments which are putting the dollar in a more favorable position regarding advantage to US exports. It is clear that American families are experiencing rising prices on cost of living items which are higher that published inflation rates. Higher equity valuations and low-interest rates are a matter of concern to many investors as a matter of future trends and capacities for retirement saving and income generation in retirement years. Much concern is expressed over the changes likely to occur in equity market indexes once interest rates being to increase again.

Enjoy the summer season and engage in many out-door activities which can be fun and productive. Sports, travel, gardening and fishing are some which come to mind and will meet those enjoyable expectations.

For The Record:

DJIA               18,005.05

S&P 500          2,119.12

NASDAQ        4,974.64

Suggested Reading:    “Seven Steps To Mastering Business Analysis” by Carkenord

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