Open notebook on desk.

A Message for You

Replacing Your Paycheck for Retirement


A message from American Century Investments Wayne Park, Senior Vice President, Personal Financial Solutions.

When planning for retirement there’s a lot of focus on how you will spend your time. While some look at retirement as a second chance at unfulfilled dreams, others may look for something simpler or want a nest egg for “just in case.” Regardless of which way you see it, one of the most important things your retirement plan should do is replace your paycheck after you quit working.

Investing for Income? Dividend-Paying Stocks is One Way

Review 3 Reasons Why Dividends Still Matter


Investing for Your Retirement Income

Income for retirement isn’t as easy as it once was when more employers provided pensions—not many have that luxury any more. And you would be hard-pressed to find anyone who thinks Social Security will provide all they need. It was actually never intended to replace your salary.

So what’s left? It likely comes down to a commitment to invest for your future through an employer’s retirement plan or setting up an IRA, or both. Equally important are the kinds of investments you choose. For ideas, read what you should know about investing for income.

As you draw closer to retirement, or if you’re already retired, income becomes a bigger deal. Most people start taking a closer look about five to ten years before they stop working. It’s when you will need to answer one of the most important planning questions, “How much will I need?” Figuring out what you will spend your money on is an important step to finding that answer.

How Will You Spend Your Retirement Income?

There are different ways to determine how much money you may need in retirement. Some follow rules of thumb, such as the one that says you’ll need to save 70% to 80% of your current income. We prefer more precise planning and encourage people to estimate a budget based on what they spend before retirement.

However you plan—and I hope you do—consider that some of today’s expenses may go up or down in retirement. A recent analysis by the Employee Benefit Research Institute (EBRI) came to the same conclusion based on what current retirees spend on today and how it changes with age.*

The EBRI noted that retirees have different focuses in retirement. Your focus may be determined by how much money you have, your health and whether you are part of a couple. About 56% of people are “Typical Spenders”—their spending focus doesn’t change too much with age—although it can if different circumstances arise.

Others are “House Spenders,” with more than 60% of their budgets going to that expense. “Health Spenders” use 20% of their budget on health care. The number of people in the health category grows as people age. Finally, “Discretionary Spenders” use 25% of their income on entertainment, gifts and contributions. This category also becomes more of a focus with age.

Your Retirement Income Takes Planning

Two of the takeaways from the analysis above are that spending in retirement is not one-size-fits-all and your focus may change over time. That’s why it’s so important for you to have your own plan based on your individual needs and wants, and to revisit it at least annually.

Planning for your retirement income may be one of the most important things you do as an investor. I encourage you to not put it off and remember our consultants are here to help with your plan. We can also help you find out how much you may need and how to invest for income. Please don’t hesitate to call us.

Best Regards,


Did you miss the previous message?

Click through to read previous articles from Wayne Park. 

Jump to: January • February • March • April


January


New Year, New Confidence?

January 15, 2021

Even as COVID-19 continues to be a threat for many around the world, I think most of us breathed a collective sigh of relief and looked forward to a new year. It’s understandable to want a fresh start and leave past worries behind. Inevitably 2021 will come with its own set of challenges, but I’m hopeful for more on the positive side. Big or small issues ahead, I encourage you to stay focused on what you can control with your finances.


Control What You Know

One way to stay in control is to be informed about changes that can impact your money. Typically details about Social Security and Medicare get updated annually. Read what’s new for these benefits in 2021.


Some Positive Glimmers

While we all know that changing the year on the calendar doesn’t mean all the challenges from the past go away, but there’s nothing wrong with having a more positive outlook. In fact, there are some reasons to have optimism, such as the continued rollout of COVID-19 vaccines and more effective treatments.

For your money, our investment professionals see some improvements in economic growth and some companies may see profits return, possibly sooner than was first expected. As individual investors, your portfolio has also gotten somewhat of a break from the extreme market turbulence we experienced in early 2020. But as always, that’s no reason to be complacent or to stray from your solid investment plan.

Keep Your Plan in Sight

Speaking of your plan, I encourage you to follow it no matter what may change around us. A new year can be a good time to see if what you have in place is working, or whether you need to adjust. Remember that even in times of higher market performance, it’s important that your risk level is consistent with your goals so you can be prepared for any environment. If you need help with your plan, just call us.

And if I can offer one more thought about the new year: I believe the resiliency shown by many through the trials of last year is reason enough to have confidence in our ability to endure whatever 2021 has in store. As always, thanks for your continued confidence in us.


Unboxing Active Management

January 29, 2021

Over the past several years, tech stocks have gotten a lot of attention, especially the big names we all know and use every day. While it’s nice to benefit from investing in popular companies, there’s always the caution of too much of a good thing. It’s one reason we believe active management is important—to help manage exposure. Active investing isn’t new, but given the new year and this week’s headlines, now may be a good time to revisit what it is and why it may be important for long-term goals.

Investment Ideas Beyond “Big Tech” Stocks

Find out what companies our investments managers are exploring, beyond those that are grabbing the headlines. It’s an example of how active management can work for you.


Active Management User Manual

What Is It?

With active management, a professional buys and sells investments in a portfolio—in our case a mutual fund portfolio. The goal? To create a portfolio that performs better than its benchmark, usually a financial index that tracks similar assets. The S&P 500® Index is one example.

On the flip side is passive investing, which is buying investments that mirror an index—and getting similar returns. Passive investments seek to follow an index; active managers seek to outperform it. As active managers, we believe there’s a place for both approaches in a balanced portfolio.

Why Use It?

A benefit of active investing is the experience, knowledge and analysis the manager brings to the table. For example, active managers will dig deep into a company’s financial health. They may consider the competitive landscape too. Is there a new innovation that will offer opportunities, or a new competitor that may pose a challenge?

Political or environmental forces can also be a reason to rely on active management. Last year’s health, financial and social uncertainties are good examples of when it may help to have an expert in your corner. Even new government policies can bring changes that a manager can navigate.

Lastly, active managers have more options when unsettling market activities arise; they are not locked in to following an index like passive managers. But that’s not to say they should follow every trend.

Our approach to active management is to keep a disciplined, long-term view no matter what happens. For us, it’s about pursuing enduring opportunities for clients, even in the face of short-term issues like this week’s headline-grabbing, speculative trading. To get our professionals’ latest views on this market event, read more.

Active and Your Portfolio

As our client, active managers oversee your mutual fund. When thinking about your own portfolio or considering new investments, it’s important to examine the approach, the cost and if the investment works with what you already own.

As much as we believe in active management, we also believe in the value of a balanced and diversified portfolio—one that fits you and your goals. To learn more about the potential benefits, read The Surprising Truth About Diversification. If you want to talk over choices or your portfolio, remember we’re here for you. All you have to do is call us.


Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

Diversification does not assure a profit nor does it protect against loss of principal.

February


A message from American Century Investments Wayne Park, Senior Vice President, Personal Financial Solutions

A History of Bubbles (And What to Do)

February 12, 2021

You may be hearing murmurings about a potential market bubble (when asset or stock prices dramatically surpass their historical norms or values). It’s natural to wonder when markets continue to rise while we still face economic and health challenges. Of course, the biggest concern about bubbles is the fallout if they burst. Let’s explore some past events to see what we can learn. 

Investment Ideas Beyond “Big Tech” Stocks

Find out what companies our investments managers are exploring, beyond those that are grabbing the headlines. It’s an example of how active management can work for you.


Historic Bubbles and Signs

Past events may provide some clues about what causes bubbles and how to know if you’re in one. Here are a few from history.

Holland Tulip Bubble (1636-1637)1

In one of the earliest recorded bubbles, prices of Holland’s famous flower soared for about four months before dropping 99%. Considered a textbook irrational event, the bubble grew from the tulip’s high demand as a status symbol. As quickly as demand rose, it fell, leaving many with bulbs but no buyers. Some now question if details were exaggerated, but it is still a story of speculation.

South Sea Bubble (1720)2

This bubble grew on an assumption that the South Sea Company would get exclusive rights from England to trade in South America. Investors bought shares on that premise and the promise of riches in an unexplored land. This bubble is said to be an example of how fraud may have impacted the market.

Dot-Com Bubble (1990s)3

Size and reach describe the famous tech stock bubble that led to a U.S. recession in 2002. The popularity of the internet caused much speculation as many dot-com businesses were valued at billions as soon as they went public. The result is an example of investing in companies that don’t have the profits to back them up.

U.S. Housing Bubble (1996-2009)4

Housing prices nearly doubled between 1996 and 2006. As prices rose so did sub-prime mortgages and house flipping. Prices peaked in 2006 and by 2009 the average home value dropped by a third. Speculation, changing demand and looser credit guides contributed to the bubble.

Bubble or Bust: Your Plan Matters

In hindsight, there were signals that could have indicated a bubble. But people rarely recognize when they’re “in” it. Similar to the drop we experienced 12 months ago, one thing the events had in common is that everything seemed to be going well—until it wasn’t.

Trying to predict the next bubble is a form of market timing—which rarely works. So what can you do? Stick with a disciplined investing plan to stay focused on your future. It can help you avoid being tempted by a trend that may not reward you later.

If you’re feeling anxious about the current frothiness in the markets or want to confirm your plan, please don’t hesitate to call us. We’re here to help.


Sources:
1Barron’s, The Real Story of the Tulip Bubble is More Fascinating Than the Myth, May 2019.
2South Sea Bubble, Oxfordpress.com, January 2021.
3What is the Dot.Com Bubble, Certified Financial Institute, January 2021.
4The Causes of the Sub-Prime Mortgage Crisis, thebalance.com, September 2020.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.


Plan for the Certainties

February 26, 2021

We talk a lot about planning for uncertainties, but some inevitable things require just as much thought. Two of those are taxes and retirement. Current unknowns, along with new and proposed government policies, may leave you wondering how to proceed. Here are a few thoughts that may help. First and foremost, don’t stop planning and be sure to seek help from a consultant or tax advisor.

Taxes Are Certain: Plan for Now and Later

One inevitable task the pandemic has not stalled is tax time—the deadline is still April 15. It’s important to understand taxes and your investments, but also consider what may be new this year, including these:

  • You can now contribute to an IRA past age 70½ thanks to the SECURE Act. This could help with taxes right now—actually for any age—since Traditional IRA contributions are usually deductible and can be made up until the tax deadline.
  • The CARES Act allowed people under 59½ who were negatively impacted by the pandemic to make penalty-free withdrawals from retirement accounts. Remember penalty-free is not the same as tax-free; it will be counted as income for 2020.
  • 529 withdrawals may have been a little dicey last year if you received a refund for college expenses due to the pandemic. If you weren’t able to redeposit the money into your account within 60 days, you may need to pay taxes and a penalty on the withdrawal.

For the future? There’s a lot of talk about tax policy changes or higher taxes. Regardless if that happens now or some time down the road, planning for taxes is always smart. Find out some potential ways to combat taxes.

Retirement Is (Mostly) Certain: Plan Ahead

Retirement may be certain, even though sometimes the timing is not. Job losses, health concerns and family issues may cause people to retire sooner or later than expected. Either way, there may be new considerations for your plan this year.

The pandemic may have changed some timelines if your savings took a hit. However according to most reports, few people withdrew money from their retirement accounts as allowed by the CARES Act.* Market changes may also warrant a second look at your plan. If retirement is far off, check if you’re still on track. If you’re getting closer, it’s even more important.

Another thing to consider is how much growth potential you may need in retirement. Many people think only about the lower volatility of bonds, but growth has a place too. The continued low-interest-rate environment may be problematic for bonds; if you need that income for retirement, you might need to factor that into your plan. 

How Much Growth Is Enough?

It depends on what type of investor you are. Use our Building a Growth Engine information to help you identify your potential needs now and for your future.


The Need for Planning Is Certain

I’ve covered just a few thoughts about planning for taxes and retirement—and there are many more facets to consider for both. And the good news? You don’t have to plan alone. We’re here to answer questions about your financial plan. Please don’t hesitate to call us.


*"Most savers resist temptation to raid their 401(k) plans amid COVID hardships,” cnbc.com, December 2020.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

March


It’s Been a Year

March 12, 2021

I don’t know when things changed for you, but for us it’s been a year since most of our staff packed up to work remotely. Back then, we thought it would be for a few months. Since then, the world has experienced numerous changes that are now becoming the norm. Some may have impacted the way you view your finances and long-term investing plan.

Travel and Tourism Changed Dramatically

See what our investment professionals say about travel sector investments going forward.


It’s Been a Year of Change

Recently National Public Radio (NPR) asked people to share on social media the moment they realized life as they knew it had changed. Using #TheMoment, there were many responses from seeing long lines and empty shelves at the grocery store, to when people became both full-time employees and full-time child care providers at home. Others said it was when major events—sporting, concerts—began to cancel.1

Whatever it was for you, 2020 was definitely the year the world changed. Let’s look at some ways it altered finances.

More Savings, Less Leisure

A way COVID-19 positively impacted people’s finances is their decisions to save more. Some of that may have been by default because of fewer opportunities to spend on leisure. But the initial market volatility and recession shock was a good reminder that emergency savings are important no matter what.

According to a recent survey,2 better financial habits are resulting from the pandemic: 43% of people said they picked up a new habit and 94% say they plan to continue it this year. Among those are setting a budget, reducing spending, saving and tracking credit scores—all good news for finances.

More Retired, Fewer Wanted To

According to another study, 70% of people who retired in 2020 said they did so earlier than expected. Of those, a majority said it was involuntary, citing health issues or job losses. The same survey said retirees were more anxious about their situation than before.3

We know from previous studies that many people expect to work longer than they actually do, but this year the pandemic contributed to some retirees ending employment when it didn’t feel physically safe to work outside the home. On the positive side, more pre-retirees—those within 10 years of retirement—are more actively planning for their future.

Either way, planning for retirement is always critical. Retirees will also want revisit their plans and budgets to make sure they are on track.

Pandemic or Not—There’s Always Change

No matter if COVID-19 made you take a second look at your finances or it was business as usual, change is always present. It doesn’t take something as large as a pandemic to alter life. Markets and personal situations can change things overnight too.

That’s why it’s always important to periodically review your personal finances and to check if your plan still matches your situation. Don’t hesitate to call us if you need help.

As I reflect on what a year it’s been, I want to sincerely thank you for your continued trust in us. We often said, “We’re in this together.” Looking back, I see it was true.


1People Share #TheMoment They Realized The Pandemic Was Changing Life As They Knew It, npr.com, February 2021.
2Credit Karma and Qualtrics Survey, December 2020.
3Pandemic Brings Big Jump in Early Retirees: Survey, Ignites March 2021.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.


Find Your Investing “Why”

March 26, 2021

A few weeks ago we asked clients how their investing interests had changed after a tumultuous 2020. About a third said, “no change.” Others said they were now paying more attention to trends, are more focused on a solid future for their families and are more interested in giving to charity. Regardless of how you might answer the same question, your motivation may matter most. When you define clearly “why” you invest, it might help you be more successful.

Interested in New Trends? Here’s One We’re Watching

Changes to how and where people work are a trend that can change where we invest. See what our investment professionals are watching now.


Investing Is More Than Money

When thinking about why you invest, some people list goals that are about the money:

  • To grow it
  • To build wealth
  • To get returns

These are good explanations of why to invest in general, but the motivation behind them are much more meaningful. “Growing your money” may mean you want to take care of the next generation. “Building wealth” may mean you want to start a new business in the future. "Getting returns" could mean your goal is a comfortable lifestyle after you retire.

Money may be the means to help, but it’s not the ultimate reason. Focusing on the “why” makes investing that much more important—and maybe a little more serious too.


Is a college education for a child or grandchild one of your motivations? Find out what 529 education savings accounts can pay for now. 529 Plan Qualified Expenses


Your Motivation Matters

Why is your motivation important? I believe it can help you more clearly define your goals and in return, the path you take to achieving them. Like anything else you set out to do—you may be more successful when there’s a clear purpose, a clear destination and a clear path to getting there.

The pandemic may have changed your focus or made it stronger. That could be especially true for those who were separated from family and friends because of travel restrictions and lockdowns. Or maybe it made you take a closer look at how you plan for emergencies or take care of your health. In my opinion, these are all silver linings for a very difficult year that hasn’t fully ended for some. A new or changed point of view can help you determine if your “whys” have changed.

Help for Why You Invest

Whether the past 12 months changed everything you think about money or made your focus a little clearer, it’s a good time to revisit your goals. I encourage you to think about the purpose and why it really matters. That can help you clarify details, such as how much money you need and how many years until you need it.

If you need help revisiting your goals, remember we’re here to help with your investing plan. Just call us. As always, we appreciate your continued confidence in us.


This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

April


Is Inflation the Next Hurdle?

April 9, 2021

Following a year of upheavals you might be sensitive to potential investing hazards. Today’s headlines don’t help either. Hearing news about government spending, such as the newly proposed infrastructure package, can raise questions about the possibility of higher inflation. Whether it will actually rise is up for debate. But let’s look at why it’s important to prepare for inflation—even when rates are low.  

Inflation and Investing

See what our investment professionals are saying about three potential inflation pressures now.


Why Keep Pace?

Inflation is an economic trend of rising prices for a “basket” of products that includes housing, clothing, transportation, education and more. If just one product price rises, such as gasoline, that’s not necessarily a sign of inflation.

But what can it mean for you personally? If you’ve ever received a cost of living adjustment (COLA), you’ve experienced a way to keep pace with inflation firsthand. Not receiving a COLA means you may have experienced the downside. If prices rise, your dollar doesn’t buy as much as it did the year before. And that can affect your budget.

Your investments can also fall victim to inflation. Even at relatively low levels, it can impact how much you can buy in the future. To keep pace, one solution may be to build your portfolio for growth. Diversifying with some growth investments may be important for most investors, regardless of age. How much depends on your situation and timeline.

Historic High Jumps

If lower inflation levels can affect your money, the thought of drastic price increases is more worrisome. But is extreme inflation a real threat? For the past 25 years inflation has averaged just 2.2%.1 The U.S. has typically experienced double-digit inflation only during wartime.

Higher inflation in the 1970s was an anomaly, even though the U.S. was funding the Vietnam War. From 1965 until 1982, a period known as the Great Inflation, the U.S. endured four recessions, two severe energy shortages, and unprecedented peacetime wage and price controls. Inflation peaked at over 14% in 1980. Still, this dismal economic time resulted in Fed policy changes that aimed at not repeating history.2

Run the Race With Inflation

If you’re tempted to sit on the sidelines (or in cash) until potential trouble passes, that could actually give inflation a larger lead. You may want to consider options to help you stay ahead of inflation, including inflation-hedging choices or growth investments as I mentioned before. As always, think about your goals, timeline and how you feel about risk before you make a change.

If you need help, please call us. Regardless if it’s inflation or some other economic factor, we’re here to help. As always, thank you for your continued confidence in us.


1What’s the Highest Rate in Inflation History? Investopedia, 2019.

2The Great Inflation, federalresearvehistory.org, 2021.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.


Engage or Retreat—What’s Your Risk Strategy?

April 23, 2021

You likely know that all investments come with risks. Some higher. Some lower. Fortunately there are strategies that can help you manage them. It reminds me of the board game Risk I played in college. My opponents and I would try to outwit one another to gain “world domination.”

Figuring out your strategy for “outwitting” risk can feel like that too. Let’s review some approaches that can help, and some that may not be as wise.

Investing Balancing Act

Investing comes with the need to balance the potential to make money with the risk of losing it. Learn about the different risks and strategies used to combat them.


Playing Risk vs. Managing Risk

If you’ve ever played the game of Risk, you know there are different strategies to deploy. In our school competitions, some tried to form alliances, some would attack from the beginning and others would play friendly and hold back. For the latter, it almost always was a losing strategy over the long run because eventually you have to engage. By then, everyone else had amassed such large armies that the player couldn’t overcome the deficit no matter the luck of the dice.

Investing is surely different, but some of the same lessons can apply. There are those who take a proactive approach to managing risk by employing long-held investing strategies. Others hold back or even try to avoid it altogether.

Avoidance can come with its own set of risks. We see that now with worries about inflation. Not managing this risk or choosing to sit it out can hurt you in the long run because your investments won’t keep pace with rising prices. You might risk losing purchasing power—the ability to buy as much in the future as you can now.

Playing It Smart With Risk

How you approach risk is one way to think about managing it. For market risk, one thing to consider is how much you should personally take with your investments. Too little may not get you enough growth to reach your goals. Too much can set you up for more loss than necessary—and perhaps some sleepless nights.

For other investment risks such as interest rates, inflation, credit and taxes, there are ways to manage those too. Regardless of which strategy you employ, the smartest ones start with having a variety of investments—or a diversified portfolio—then adding specific strategies to combat specific risks.

Make Smart Alliances Too

Where to start with managing risk? One of the most important things to consider is understanding your own risk comfort level—how much you can honestly tolerate. That’s important because stepping outside your comfort zone can lead to emotional decisions over strategic ones.

Getting help when you need it is also a smart tactic. Our consultants are here to help you figure out your own risk tolerance, answer questions about specific risks and offer ideas to help you outsmart any barriers. All you need to do is call us.

We’re serious about helping you build the right investment plan because we believe it may give you a better chance of reaching your goals.


Diversification does not assure a profit nor does it protect against loss of principal.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

Jump to: April • May • June • July • August • September • October • November • December


April


When Normal Does a Backflip

April 10, 2020

If these were regular times, you might find yourself rushing to meet an April 15 tax deadline or making a last-minute IRA deposit to squeak in one more deduction. But this is 2020 and nothing is normal.

If we ever needed a break, it’s now. Fortunately, financial relief is on the way with the stimulus package and an extended tax deadline—now July 15. What will these changes mean for you?

Unraveling Relief Packages

Congress passed the CARES Act to assist Americans as we experience threats to our health and finances. It offers help for individuals, families, businesses and industries. With several rules and guidelines included, you may need help unraveling the details.

Find those in our CARES Act: Your Questions, Answered article, as well as answers to questions we’ve received from clients like you. In addition, you’ll find an article about ways to free up emergency money if you find yourself needing to cover expenses quickly.

We’re Here for You

Whatever your circumstance, remember our consultants are available to help you walk through decisions that may impact your finances now and in the future. Please don’t hesitate to reach out.

We continue to hope for the best for you and your loved ones’ health and safety.


How Are You Managing?

April 17, 2020

The current global crisis is proving to be the ultimate stress test. While we all cope in our own ways, I hope there’s comfort in knowing that we’re in this together. This week we’re focusing on ways to help manage the challenges we’re all facing—from investments to home life.

Your Personal Stress Test

  1. Know what you can control. You can make sure your portfolio risk fits you. If you can’t sleep or shake the need to sell and cut losses because of volatility, it may be time to re-evaluate. Don’t wait to find out, request a call.
  2. Rely on the experts. Knowing that professionals are managing your money can be a stress reliever in uncertain times. Here, they actively manage your investments so you don’t have to. Learn more about active management in this week’s video. Watch CIO Rich Weiss.
  3. Relieve stress at home. We know there’s more on your mind than investing. Balancing everything may be the ultimate struggle right now. Read 7 Ways to Actively Manage Your Household for some of the best ideas we’ve found.

Let Us Help

Please don’t hesitate to reach out with your questions.

Take care of yourself and your loved ones. It’s what matters most.


Hope and Planning: They Really Do Go Together

April 24, 2020

The need to have financial and health plans in place because of COVID-19 is not a topic any of us like to think about. However, it would be a disservice if we didn’t encourage you to take steps to prepare. It doesn’t mean you don’t have hope, it means you care.

Estate and Other Plans Right Now

It’s unnerving to think that you or someone close could need to be hospitalized, but it’s equally distressing not to have a plan. That’s why this week we’re focusing on what you can do. You’ll find a podcast on how to prepare for the unexpected, as well as an article about talking to your family about your plans.

Communicating helps ensure that loved ones understand your wishes. How do you do that in these no-contact times? Review ways to stay connected—not just about money and estate plans, but also to keep family and friend ties strong too.

Planning may also include what everyday life may look like post-pandemic. I hope you were able to listen in to Dr. Sanjay Gupta—neurosurgeon and CNN chief medical correspondent—discuss this topic. If you missed it, a webcast replay is now available at our COVID-19 center.

Where Are You With Your Plans?

See how you compare with the results from last week’s family money survey. Don’t worry if you feel behind. Remember our financial consultants are here to help.

As always, we’re wishing health and safety to you and your loved ones.

May


Investing in Emotional Times

May 1, 2020

It’s an emotional time for many with health and financial fears. The worst fear may be the unknown. It’s also a time when many make hasty decisions. But sometimes the best course is to take a step back, weigh the options and rely on what you know to be true. 

What Are You Worried About?

Last week we asked what worries you most right now. Not surprising, health concerns ranked first. Many expressed that they were equally anxious about the combination of their financial futures, employment, life after the pandemic and market volatility. Let me address health and financial worries here.

Plan for Health Concerns

Caring for yourself can take on many forms, but one that may be overlooked is having plans in place to address health issues. These include health insurance, medical, estate and comprehensive financial plans. All can be critical if you experience a health problem. In addition, planning goes a long way to helping relieve stress and anxiety because you know you’ve taken steps to prepare.

Choose Strategies Over Emotions for Your Finances

While the answers to many concerns may take time for individuals and the nation to figure out, there are strategies for addressing market volatility anxiety. Large market dips—even for a few days—can rattle the most confident investor. In the midst, I encourage you to resist quick moves that may do more harm than good in the long run.

Below are two strategies to help keep emotions in check and your money working for you. You can also find more about these in our COVID-19 Center.

  1. Focus on your long-term plan. You have an investing plan for a reason, and it’s designed to help you reach your end goal—even through market turbulence. Our CIO Rich Weiss says that there’s no room for knee-jerk reactions in your plan. Watch his latest video for more perspective. (No plan? Call us.)
  2. Take advantage of market swings. It sounds counterintuitive to invest more when all you want to do is protect what you have. However, volatile markets can offer opportunities.

Is it complicated? Only if you try to time the markets. Market timing requires you to be right twice: When you buy and when you sell, and few, if any, are successful at it.

A better option is to invest regularly and take advantage of dollar-cost averaging—buying more shares when prices are low and fewer shares when prices are high. The easiest way is to set an automatic investment at an interval of your choice. Doing it automatically takes the emotion and guesswork out of “when” to invest. Read more about dollar-cost averaging in our latest article.

Confidence as You Look Forward

Fear and worry are normal when everything around us isn’t. I hope you take comfort in knowing we are in this together, and we are here for you. If your investment plan has you concerned, please don’t hesitate to reach out to a consultant for help.

As always, our best to you and your loved ones.


Risk Is Inevitable. Let’s Manage It.

May 8, 2020

As we experience market ups and downs sparked by the pandemic, it’s a good reminder that risk is a natural part of using money. While there’s no way to get around risk, there are ways to manage it. 

Risks to Your Money

From hiding your money under the bed to investing in the latest trends, risk is involved in all the ways you seek to preserve or grow your money. Even the mattress option has risks: It’s not insured. It won’t grow. And, it won’t keep up with inflation. I encourage you to know the risks before you decide where to put your money.

Saving vs. Investing vs. Trading

It might help to compare these and their potential risks and rewards. Many confuse them and how they’re different, so let me break them down.

Saving is putting money aside for the near future.

Bank savings are the traditional way, but others have gotten creative. Think coffee cans, freezers and of course, under the mattress.

Preservation is the goal; however, in the best of times you may earn interest, but right now the annual interest rate is only about .07%.1

1Federal Deposit Insurance Corporation, as of April 27, 2020.

Investing is buying and holding assets for long-term results.

Investing can help you build wealth over time for long-term goals such as your retirement. There are many investment vehicles, including stocks, bonds, mutual funds and exchanged-traded funds. Within each category are a variety of choices too.

Rewards can be much higher than a savings account but investing carries more risks—one of which we know well: market risk. The stock market’s average annual 10-year return is 11.68%, but its one-year return is .86%.2

2S&P 500 Index data as of April 30, 2020. The S&P 500 Index is a capitalization-weighted index of 500 widely traded stocks. Created by Standard & Poor’s, it is considered to represent the performance of the stock market in general.

Past performance is no guarantee of future results. Investment return and principal value of security investments will fluctuate and it is possible to lose money.

Trading is buying and selling assets for short-term results.

Trading attempts to take advantage of market ups and downs at a given point. Stocks, bonds and commodities (goods that can be sold on an exchange) can all be traded.

Rewards can be higher, but the lows can be much more dramatic too. You don’t have to look too far into the recent past to see how risky it could be. This year alone, the stock market fell approximately 34% between February and March.3

3Source: Wall Street Journal Markets, S&P 500 Charts, May 2020.


At American Century Investments, we invest for the long-term and believe you should too.


How Much Risk?

The answer is personal and one you should base on your goal for the money—preservation, long-term or short-term—and your feelings about risk. Start by answering these questions:

  1. How much can I afford to lose? For the answer, you should also consider how much you are willing to lose.
  2. When do I need the money? Your timeline can clue you in on how much risk to take. More time can equate to more risk because you have time to make up potential losses. Usually you’ll want less risk when you don’t have time to recoup losses.

Don’t Avoid Risk, Manage It

There’s no way to avoid risk if you want your money to have growth potential. However, let me offer some ways we can help you manage it:

  • Understand your true risk tolerance. It’s one thing to say how you feel about risk on paper. It’s another to experience a real loss. Our consultants can walk you through questions to help you figure out yours.
  • Know your actual timeline. Let’s take the guesswork of when you might need the money and help you create an actual plan for it.
  • Match your investments. After settling risk and time answers, we’ll help you choose investments that fit. That includes making sure you have a mix of different kinds (diversification) and the percentages that add up to your ideal risk level (your asset allocation).
  • Make it work for you. Finally, we’ll offer ideas to help you stick to your plan. One we champion is automatic investing—setting a regular time and amount to invest—so you don’t have to worry about “when,” and you can stay invested no matter what markets do next.

Why Manage Risk?

The alternative to managing risk is to avoid it, and that can have a long-term effect on your money and what you’re investing for. Some jumped out of the markets at the first sign of rough waters as COVID-19 began to spread. They may have also missed the moderate rebound we saw later, and unfortunately locked in those losses. Let us help you find a better way.


Bulls, Bears & Recessions. What’s Your Next Move?

May 15, 2020

In the financial world, we use labels to describe what’s happening in the markets or the economy. What labels don’t do is tell you what to do with your portfolio. Honestly, they shouldn’t. Focusing on long-term goals is a better way to make decisions—especially during uncertain times.

Labels Can Trigger Emotions

Some labels can spark anxiety or make us feel too confident. Many experience fear when they hear terms like bear market, or even worse, recession. Out of distress, some will act without considering potential long-term effects on their money.

On the flip side, bull markets tend to give us more confidence. Unfortunately, they can also make us forget that bear markets occur too. Extended bull markets, like we experienced over the past decade, can make a decline seem even more dramatic.

A bear market is a 20% drop in an index (often the S&P 500 Index) from its most recent high. It’s not the same as a “correction,” which is a 10% drop.

A bull market is a 20% increase from the most recent low.

Recessions describe economic slowdowns. Officially, they are indicated by two consecutive quarters of decline in the gross domestic product (GDP)—the output of goods and services in a country or economy.

The S&P 500 Index is used as a benchmark for stock market performance. This performance is not an indicator of economic health, but the two are related.

Bears and Recessions: Chicken and Egg?

Recessions and bear markets are often discussed in the same conversation because recessions tend to follow bears, but not always. For example, right now the stock market has returned to bull territory—having risen 20% from its most recent low—but most economists agree that the U.S. economy is in recession.

It’s important to note that markets usually recover before the economy does and recessions can last longer. Why? The stock market looks to future earnings of businesses and where investors believe the economy is headed, versus current economic output.

As the U.S. gradually reopens, many are hoping that the economy will recover soon. To hear about possible scenarios, be sure to watch Multi-Asset Strategies CIO Rich Weiss’ latest video.

What Next for Your Portfolio?

Investing through a recession isn’t something you’ve had to deal with in a while—newer investors may have never had to at all. Before the pandemic, the markets had been so good for so long, so it feels like new territory.

Whether you acted after the initial market declines in the first quarter or decided to hold the line, recent volatility and a slowed economy have likely impacted your portfolio. However, those events shouldn’t necessarily dictate what you do next. Instead, base portfolio decisions on your own goals, how much time you have and how much risk you want to take.

Call for Backup

You don’t have to navigate market conditions alone. Whether you need to stay the course or reallocate, it’s important to talk through your options before you make a move. That’s why we’re here. Please don’t hesitate to call and let us help.


When Doing the Right Thing Matters Most, We’re Here

May 22, 2020

Times of crises often drive people to seek help—even if they have never asked before. That’s a good thing. Who can go through life without needing assistance from time to time? When you want to know if you’re doing the right thing with your money or just need a second opinion, you’re in the right place.

Help From a Name You Know

Many of you are long-time clients, having first invested with us 20 or more years ago. Thank you!  We appreciate the loyalty and commend you on your long-term investing view. That same view guides how we manage your money.

There’s something else we’re passionate about that you may or may not know. While we started out as a mutual fund provider, we’re also here to help answer the question many people want to know: Am I doing the right thing with my money?

You’re in the Right Place

I want to make sure you know about the services available when you need help. The following may be especially helpful during the uncertainty we’re experiencing now in both the markets and the economy.

Investment Guidance – Get help choosing investments that address a specific need—such as capital preservation. A consultant can help you understand the different funds we offer and which may match what you’re looking for. The service is free to any American Century® client.

Portfolio Reviews – Go a little more in-depth with a portfolio review. A consultant will look at your portfolio as a whole and make sure it fits your specific goals, your timeline and especially for right now: whether you have the right amount of risk. Portfolio reviews are also free upon request to clients.

Advice and Planning – If you’re looking for more attention to your finances, check out our Private Client Group.* This newer service may be our best kept secret yet. About 1,000 of our clients have already taken advantage of it because they like having dedicated financial consultants in their corner—plus the financial advice, in-depth planning and expert portfolio oversight if offers. 

You might also be surprised that our premium service does not have the high minimums required by other advisors and it’s available for one-fee**—a truly unique feature in our industry.


Want more information about working with an advisor?


Connect With a Person When You Need It

I know there are many online, or robo advisors, out there and they’ve been popular among those who like to manage investments on their own. While those have their place, there are times when it’s nice to talk to a person. You can get that here when you need it.

Also know that our consultants do not work on commissions and don’t benefit from recommending a particular investment over another. The heart of our services is to help you know if you’re doing the right thing for who and what you’re investing for. Please don’t hesitate to reach out.


*

Private Client Group advisory services are provided by American Century Investments Private Client Group, Inc., a registered investment advisor. This service is generally for clients with a minimum $50,000 investment. Call us to determine the level of service that is appropriate for you. The advisory service provides discretionary investment management for a fee. All investing involves risk.

**

Annual Investment Advisory Fee is 0.90% for balances $5 million and under and 0.70% for balances over $5 million. American Century Investments Private Client Group charges a single annual fee based on the value of your assets under management with us. The single fee includes our Private Client Solutions, along with any underlying trading costs, commissions, and custody services related to our recommendations. American Century Investments' financial consultants do not receive a portion, or a range of the advisory fee paid by clients. Client-oriented trades outside of our recommendations and other activities like wire transfer fees, may result in additional cost. 


Look to the Future—Even

May 29, 2020

Through StormsIt’s hard to think about what’s down the road when there’s so much happening right now and probably more uncertainty ahead. One thing I believe: You and your loved ones deserve a bright future. Having a plan is one way to help you on your way to what matters most.

The Future of Us

All of us will likely look back with unbelievable stories about how we spent our time in 2020. Some will have sad memories about the virus. Others will have funny tales about sheltering in place and working from home. Graduates will remember virtual ceremonies, and our kids may tell stories about how parents didn’t know math as well as the students.

What we discover about living through the pandemic may very well impact the future and how we view our finances too. We’ll likely have a different perspective about emergency accounts, savings priorities and the value of financial planning for critical times.

Plan for Better Days

Regardless of what life will look like years from now, I encourage you to not lose sight of what it could be. Planning now will be one of the best investments you can make in your own life and those closest to you.

If you don’t have the means to invest right now, don’t feel guilty. You can still have a plan regardless of your current financial status. As soon as you’re able, put these on your list of to do’s—replenishing your savings, adding to an emergency fund and investing more.

If you have children, also add saving for their education, so they can reach for their dreams. For yourself, add retirement savings too. Sometimes we think about others and immediate expenses and put off our own retirement planning. It you need help with all these priorities, we can help.

Celebrate 529 Day with Us

Despite what’s happening in our world, we are choosing to celebrate 529 Day today. May 29 is a time to focus on the importance of saving for an education and the benefits of 529 savings plans. A 529 is not only an easy way to save for your student’s future, it also offers some nice tax breaks for you now. 

The availability of tax or other state benefits (such as financial aid, scholarship funds and protection from creditors) may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors.

If you don’t have a savings plan for your student, I invite you to learn more, by reading our article that busts myths about 529s. You can also enter our contest for a chance to win $1,529 in a new or existing Learning Quest® 529 Education Savings Program. It will make a nice start or addition to your savings. The contest ends May 31 so you still have a few more days to enter. 

No purchase necessary. Void where prohibited. See contest rules

Pave the Way for Your Future

Education savings and retirement planning are just two ways to prepare for the future. Another way is to check up on your portfolio. A portfolio review is as important to your finances as an annual physical is to your health. Find out more about portfolio reviews, and don’t hesitate to call us to evaluate yours. It's free, and it's all part of the services you get from us.

Join me in looking towards the future with hope.


IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

Before investing, carefully consider the plan's investment objectives, risks, charges and expenses. This information and more about the plan can be found in the Learning Quest Handbook, available by contacting your financial advisor or American Century Investment Services, Inc., Distributor, at 1-800-579-2203, and should be read carefully before investing. If you are not a Kansas taxpayer, consider before investing whether your or the beneficiary's home state offers a 529 Plan that provides its taxpayers with state tax and other benefits not available through this plan.

Notice: Accounts established under Learning Quest and their earnings are neither insured nor guaranteed by the State of Kansas, the Kansas State Treasurer or American Century Investments.

Administered by Kansas State Treasurer Lynn Rogers
Managed by American Century Investment Management, Inc.
Distributed by American Century Investment Services, Inc.

As with any investment, it is possible to lose money by investing in this plan. The value of your Learning Quest account may fluctuate, and it is possible for the value of your account to be less than the amount you invested.

June


Unsettled World, but Still Hopeful

June 5, 2020

I think it’s safe to say that the past few weeks and months have been challenging for most people in our country. Impacts from the COVID-19 pandemic have led to financial market volatility, staggering unemployment and a potential recession.  

On top of that, our nation is experiencing deep pain. I recognize that as much as I am troubled by events in the U.S., I cannot fully appreciate what George Floyd’s family, friends and the African American community are feeling. My hope is that you, your family and community are healthy and safe; and that the remainder of 2020 will be a time of renewal and recovery. 

The Market Echoes Hope 

Despite a world pandemic, signs of recession and a distressing social environment, the stock market continues to remain positive because of investors’ expectations and their hopes for resolutions. We believe this reinforces the stock market’s forward-looking view versus the bond market, which reflects today’s volatile elements. However, like many circumstances these days, markets can change quickly. Regardless of which direction, we are here for you. 

Through times of uncertainty, we are thinking about you and your investing goals. It’s why our investment professionals stay focused on the long term and manage your money with the same steadfastness as always. We believe it can help you find success through the many ups and downs the markets may encounter. 

How can you be ready for any environment? Follow our lead and keep a long-term view of your own investments. To stay focused, it helps to have a plan. If you don’t have one, or want to recheck a current plan, remember we’re here to help. 

As always, we appreciate your confidence in us. 


Innovations and Evolutions

June 12, 2020

Six months into this decade, and who would have thought that 2020 would prove to be a time of so many drastic changes? Many have altered their personal lives regarding health, perspectives and much more. It takes innovative thinking to adapt—and that also applies to your finances.

Innovations and Your Investments

Innovation is a significant piece of the puzzle that our portfolio managers look at when deciding in which companies to invest. Companies that adapt and change often signal good opportunities for growth, even in uncertain times.


Evolving Services

Just like your investment needs can change, so can what you require from services. Maybe you want to make account changes faster or need help navigating market turbulence. Two of our most recent service changes include:

  1. Enhanced measures to help keep your private information safe when you log in to americancentury.com. If you haven’t used our convenient online services, register to try them.
  2. Lower minimums for our advisory service mean more clients can access financial planning and personal advice from a real person. I encourage you to find out about our Private Client Group.

A Foundation of Innovation

Innovation is also part of our DNA. You may not know that our primary owner is world-class biomedical research organization, to which we pay annual dividends ($1.6 billion since 2000).

This ownership gives us a story unlike any other in the investment world. Read how it allows us to have a different kind of purpose that has the potential to save lives. You play a role in that too.

Your investment helps us support this ongoing medical research, and we can’t thank you enough. We’re also committed to continue evolving as you change. Don’t hesitate to reach out if you have a need right now.


Private Client Group advisory services are provided by American Century Investments Private Client Group, Inc., a registered investment advisor. This service is generally for clients with a minimum $50,000 investment. Call us to determine the level of service that is appropriate for you. The advisory service provides discretionary investment management for a fee. All investing involves risk.


Today’s Road Bumps Won’t Stop the Future

June 19, 2020

Current conditions are causing us to focus only on today’s financial needs—for good reason. But there’s another reality we should not lose sight of: Today’s road bumps won’t stop the future, and that includes your retirement. The solution? Balance today’s needs with tomorrow’s goals.

Sidestep Roadblocks: Stay Balanced and Informed

Balancing finances for now with your retirement goal is essential. If you’re already retired or it’s a few years away, it’s even more critical. I encourage you not to allow current road bumps (or craters) steer you completely off track.

Instead, refocus some of your financial energy on the future. That includes being aware of some important aspects for retirement. We have some resources to help.


  1. Social Security is a major player for retirement income. Review the latest updates, or if you need the basics, learn how to maximize your benefits.
  2. Medicare will be important for health care in retirement. Review the 2020 Medicare changes and what they may cost.

New Realities for Retirement

Developments since COVID-19 could also affect your retirement plans. Here are a few to consider as you reassess:

  • New timeline? Market activity has been down, up and down again. Perhaps your portfolio is a bit out of alignment from the turbulence. Or maybe you are second-guessing a quick buy or sell decision when the markets (and you) first reacted to the pandemic. A portfolio tune-up and an evaluation of your timeline may be a good place to start.
  • New tax implications? Government stimulus packages could have a long-term impact on U.S. taxpayers, including retirees. Now may be time to consider some tax-advantaged options, including IRAs.

Pre-tax verses post-tax contributions, taxes when you withdraw or tax-free withdrawals—compare Traditional and Roth IRAs to see which might work best in a new tax world. You may also want to look at other tax-advantaged investment choices, including municipal bonds. Call us to find out more.

Detours Don’t Have to Derail Your Future

Looking ahead, there’s still much uncertainty about outcomes for the pandemic, social distress and how the economy and markets will react. But we can all be certain about this: The future will come. Let us help you refocus and reevaluate so your plans don’t break down along the way.


Please consult your tax advisor for more detailed information regarding the Roth IRA or for advice regarding your individual situation.

Taxes are deferred until withdrawal if the requirements are met. A 10% penalty may be imposed for withdrawal prior to reaching age 59½.

IRA investment earnings are not taxed. Depending on the type of IRA and certain other factors, these earnings, as well as the original contributions, may be taxed at your ordinary income tax rate upon withdrawal. A 10% penalty may be imposed for early withdrawal before age 59½.


Money Smarts: Pass It On, Build It Up

June 26, 2020

If recent market ups and downs have done anything positive, it’s reminded us how crucial it is to make wise financial decisions and to know how to handle money properly. That’s also an important lesson you can share with kids because, like it or not, they’re watching and learning from you. The good news? We can help you teach money smarts with our five lessons.

The Right Time to Teach

Parents, grandparents, aunts, uncles or family friends—anyone can make a difference in a young person’s life when it comes to teaching them about money. It doesn’t matter if you sailed through this current financial upheaval or have taken a few missteps. Either situation can be a good life lesson for kids. At the end of the day, we want them to be successful and avoid pitfalls we or others may have experienced.

Is financial knowledge important? A recent survey suggests that it’s more important than ever. Nearly 9 in 10 Americans report that the COVID-19 crisis stressed their personal finances. The biggest culprits?


Money Stressors During Covid-19

  • 54% said they did not have enough saved
  • 48% said they’re worried they don’t have enough to pay bills
  • 39% said they are stressed about job security

Source: National Foundation for Financial Education, April 2020


Enroll Kids in “Money Camp”

Help your kids be more prepared for their futures. This summer may be a great time to get them learning about all aspects of money. With limited openings of camps, swimming pools and other typical summer activities, take advantage of the extra time they may have and enroll them in your own “money camp.” Not sure how or where to start? We’ve got you covered.

Our Raising Financially Aware Kids eBook includes activities for any age—from understanding the value of money to saving and investing to managing credit for older teens, you’ll find a variety of activities to keep them busy. Download the free eBook.

Sharpen Your Money Smarts Too

While you’re exploring ways to help the kids learn about money, don’t forget to stay on top of your own financial education. Right now, it’s particularly important to understand how markets can react to crises, and what you should (or shouldn’t) do about it. Below are some resources that can help.


Sharpen You Own Money Smarts

Bear markets? Bull markets? Watch our video to learn what they are and how they relate to the economy.

Buy, Sell, Hold? Learn the do’s, don’ts and maybes of managing finances in volatile markets.


Be a Lifelong Money Teacher and Learner

It’s never too early to start teaching kids about finances. It’s never too late for you to increase your own knowledge. For you, another important aspect is learning about your portfolio. Is it working smart for you? If not, how and why? Call to let us help

July


Together: How We "Play" It

July 2, 2020

July is a special month for us, and not just because of Independence Day. Every year we look forward to the American Century® Championship—a celebrity golf tournament that brings sports and entertainment personalities together in an exciting competition.

It’s fun to watch even if you’re a non-golfer. But the Championship isn’t just about the game or us. It’s about changing lives by supporting causes we’re passionate about. After the hazards so far in 2020, the Championship is just one way we’re choosing to play out the rest of the year with conviction. Let me share how we can make a difference—together.

How Will You Play It?

Learn more about the American Century Championship – July 10-12


How We Play It

Playing golf is one thing, but managing your money and making a difference are serious business for us. Our inspiration for both started with our late founder and his desire to do something meaningful for people. In the beginning, it was about helping individuals become financially independent.

Now, our purpose also includes impacting others through medical research that has the potential to save lives. It’s the heritage the Stowerses—our founder and his wife—gave to us.


Learn how Jim and Virginia Stowers turned their passion into a legacy. Read their story and find out how you play a part too.


How Will You Play It?

Helping you with your investments is still as important today as it was when Jim started the company. How you personally approach your finances is just as important.

You may be rethinking your previous planning methods; especially given the unexpected events we’ve experienced. Continued market ups and downs may also have you wondering what to do next.

Like a golfer who faces challenges on the course, market turbulence can threaten to take you off track. It helps to know how to adjust when difficulties arise. Our Weathering the Storm: 4 Time-Tested Investing Strategies article is a good resource for you. If you’d like to speak with someone about your finances, please call us.

Watch. Win. Give.

I hope you will join us in helping change circumstances for others—and have some fun while you do it. Here are two ways to get involved:

  1. Tune in to the American Century Championship live broadcast on July 10-12 on NBC affiliates. Monies from the Championship will support COVID-19 relief efforts and the fight for social equity.
  2. Show us how YOU play it. Join our Trick Shot Challenge for a chance to win two tickets to next year’s American Century Championship. No purchase necessary. Void where prohibited. Must be 18 to enter. Read full contest rulesEnter today.

As always, we appreciate your confidence in us. Together, let's reach for new ways to impact the future of prosperity and health for others.

Best Regards.


The Future. How Will You “Play It?”

July 10, 2020

If there’s a lesson from 2020, it’s that you can’t always know what’s coming your way. However, you can decide what you will do. You’ll hear that message this weekend when you tune in to the American Century Championship celebrity golf tournament. We’re asking ourselves and you: How will you “play it?” How can you respond to make the future better for yourself and others?


Tune in to the American Century Championship - July 10-12

  • Watch sports and entertainment MVPs and legends compete to win and change lives.
  • Take the Trick Shot Challenge for a chance to win tickets to next year’s tournament in Lake Tahoe.

This contest has now concluded. No purchase necessary. Void where prohibited. Must be 18 to enter. Read full contest rules.


Let me share how we’re choosing to respond. It’s starts by sticking with our convictions—both in how we manage money and seek to positively impact the future. I also have some ideas about how you can “play it” for the people in your life.

How We Play It for You

For you, our number one job is delivering investment results to help you save for college, retirement or for any other reason you invest. Your goals are important and we actively manage money to help you be successful. Our investment professionals work to outperform by:

  • Repeating strategies they believe can work time after time.
  • Staying vigilant and knowing what makes markets move and change.
  • Taking smart risks, not unnecessary chances, with your money.

Learn more about how we’re invested in you and your future.


How We Play It for Others

Making a difference is part of our DNA. Throughout our history, we've been committed to helping people become financially independent. And through the unique relationship with our primary owner, the Stowers Institute for Medical Research, our dividend payments support the Institute's work of uncovering the causes, treatments and prevention of life-threatening diseases.

The American Century Championship is an extension of that purpose and will support some of today’s most critical causes.

As our client, you play a role in all of it. Your continued confidence allows us to keep reaching for ways to impact not only your future, but the future of others. Thank you for that.

How You Play It

You wouldn’t be investing if you weren’t playing it for the future. But I also know that investing can be complicated. It’s our job to break it down and help you stay informed so you can make decisions that are right for you.

Part of it is making real people available to answer your questions, but you also need the right tools. It’s why you hear from us about the markets, events in our world, and other topics that may impact your finances. Find our latest insights and news in our COVID-19 Center.

Play It for Others Too

Whether it’s family, friends or other important people in your life, I’m convinced that few of us invest only for ourselves. How can you impact your loved ones? This year has made it evident that planning is crucial—especially for the unexpected.


Read Plan Your Legacy at Any Age to find out why estate planning is important for your loved ones and get information to help you start.


Together: How We Play It

Large scale or for the people in your circle, making a difference motivates us to do our best. We’re here to help you make an impact for those you love. Help us impact others by tuning in to the American Century Championship.

Let’s play this together for the future. If you need help, don’t hesitate to call us.

Best Regards.


What's Next for Your Money?

July 17, 2020

While markets continue their up and down reactions to headlines and economic news, it can be hard to know what to do with your investments. Should you stay the course? Run to safety? Uncertainty can make you wonder what the next move should be. Let’s review some basics to consider for money decisions.

In or Out? There Is an In-Between

Many people think about investing as being “in” or “out” of the markets. We perceive “in” as risky and “out” as safe during volatile times. Let me remind you that investing has a risk spectrum—from low to high. In between cash and the most aggressive stocks are many different levels of risk.

The risk spectrum also relates to rewards—generally the higher the risk, the higher the potential returns, and vice versa. What’s important is that the risk/reward balance in your portfolio fits your goals and your timeline.


Understand the importance of risk for your short- and long-term goals. Read Golf and Investing: More in Common Than You Think to put it in perspective.


One-Fund Wonder?

In music, a one-hit wonder is a song that’s briefly popular. Investors with just one investment—unless it includes a mix of others like a fund-of-funds or model portfolio—may set themselves up for a one-fund wonder. Like that one ‘80s song, your investment could be famous for a performance spurt followed by an infamous sudden drop. We advocate a diversified portfolio.

Expand Your Playlist

A diversified portfolio includes a mix of the broad investment categories below. Each category plays a different role in a portfolio and within each are several choices with varying levels of risk and reward.

Money markets fill a stabilizing role and give you easy access to your money. However, sitting in a money market fund to avoid risk can be risky too. Returns likely will not keep up with inflation.

Bonds play the lead for income. They are essentially loans from you to entities (corporations, governments) that agree to pay you back with interest over time. While most can have less risk, the rewards are generally lower than stocks.

Stocks take center stage for growth, allowing you to participate as companies grow. Stock funds range from moderate to very aggressive—depending on the kinds, sizes and locations of companies they invest in. They typically offer the highest rewards with the highest risks.


Need help putting your portfolio together? Call us for help.


Find Your Fit, Repeat

Deciding what to do with your money should not be an emotional choice. Having your portfolio risk match you and your goals is one way to do that. Another way is to invest regularly. That helps take the emotion out of when to invest.


Read Keep Emotions in Check—Automatically to see how automatic investing can help you remove the emotional decisions and take advantage of market swings.


Your Next Step

Deciding if you should make a change with your money is an important step. Being aware of the investing principles I’ve discussed is a start, but sometimes talking it over with someone can help. That’s why we’re here. Please don’t hesitate to call us.

As always, thanks for your continued confidence in us.

Best Regards.


Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

Diversification does not assure a profit nor does it protect against loss of principal.

Generally, as interest rates rise, the value of the securities held in the fund will decline. The opposite is true when interest rates decline.


Financial Decisions: It’s Personal

July 24, 2020

What’s more personal than money? Not much. That’s because personal decisions are intertwined with finances, and vice versa. It’s nearly impossible to make a financial decision without it affecting your loved ones too. Below are some thoughts for how to align personal and financial decisions, and not lose sleep over them either.

Consider Family and Finances as One

Financial matters that impact you also affect those around you. An income setback, a job loss, and as we know well, a global pandemic, can change more than your money. Situations such as these and even less critical ones can also affect relationships, so it’s important to consider the impacts of your choices.

A current example: As states and administrators navigate reopening (or not) parents may need to adjust their work life (again). Grandparents and other family members may also be called upon to help, giving caregiving a whole new meaning.

Traditional and expanded caregiving needs can change family dynamics overnight. But even non-critical events need a plan. Hopefully you can prepare for these very personal and financial decisions before they occur, though I realize sometimes it’s not possible. Either way, I encourage you to consider your family and your own financial future in decision making.


Read Caregivers: Take Care of Yourself, Too for information about how you can manage finances in a caregiving situation.


Evaluate Tradeoffs and Priorities

Financial decisions often boil down to tradeoffs. A decision to invest for retirement may mean you spend less now in exchange for a potentially comfortable lifestyle in the future. Saving for an education could equate to cheaper family vacations, but hopefully less reliance on student loans for your child later.

These examples affect your bottom line today but may be worth a payoff later. Choosing the opposite—spending today—will also affect your future finances. Weigh priorities and their impacts when making financial decisions.

Give Yourself a Break

Finally, knowing your financial decisions impact your loved ones can feel weighty. However, I encourage you to not fret over your choices—past or present. As humans, we feel proportionately worse about losing money than we feel good about gaining it.

Even if you’re rethinking a decision, you can keep moving forward. And if you need to talk over your money decisions with someone, remember we’re here. Don’t hesitate to call us.

Thank you for allowing us to be part of your personal financial decisions. We don’t take it lightly.

Best Regards.


Are You Feeling the Pressure?

July 31, 2020

It’s the end of July, and who would have imagined our lives and finances would still be under such pressure? With virus cases continuing to rise in many places, social questions still outstanding and the markets responding differently from day to day, it’s no wonder we’re feeling the weight. Taking control may offer relief.

The Link Between Health and Wealth

Stress of any kind can have an impact on our wellbeing. From sleepless nights to physical symptoms, it’s clear that prolonged stress is a concern. Beyond our health, worries about how COVID-19 did or still could affect your finances is real, too.

According to a recent survey , Americans report that they are nearly 15% more financially stressed now compared to the end of last year. Unfortunately, the respondents believe this heightened stress could have a lasting effect. On the bright side, the study indicated that people are paying more attention to their finances. If you are stressing over money, the resource below may help.

Feeling the Pressure?

Read Beat Financial Stress: The Connection Between Health and Wealth.


Just Do One Thing

Taking control of your finances is one way to help relieve stress. If that sounds stressful, the key may be to take one step at a time. You don’t have to solve all your financial questions at once.

A way I relieve stress is to organize something. It’s my way of controlling one thing amid so many things that I can’t. I encourage you to do the same with your finances.

What could that look like for you? Maybe it’s requesting a portfolio review from one of our consultants to make sure you have the right amount of risk for your current situation. Or reviewing your budget to see if it still works for your family.

Another thing you can do is simplify, especially if your investments are spread out among different places. How about bringing that old 401(k) together with a retirement account here? Viewing your investments in one place can make it easier to keep track of everything and see how you’re progressing.

Bringing your money together can relieve stress and more.

Read 3 Smart Reasons to Streamline Your Financial Picture.


Taking care of just one thing is a good place to start in reducing financial stress. Talking it over with a real person can help, too. That what we’re here for. Please don’t hesitate to call us.

And as always, thank you for letting us help with your financial future.

Best Regards.


This information is for educational purposes only and is not intended as a personalized recommendation or fiduciary advice. There are different options available for your retirement plan investments. You should consider all options before making a decision. Our representatives can help you evaluate all of your distribution options.

August


Lose Out or Miss Out? A Strategy Can Help.

August 7, 2020

Many people have worries about money. These can lead to abandoning your investments during rocky markets or making decisions that may not pay off in the long run. The alternative is to follow a sound plan that can anchor your emotions.

FOMO vs. FOLO

Have you heard about FOMO—the fear of missing out? It’s the anxiety people have when they feel left out. And it’s not just for 20- and 30-somethings on social media. People with investing FOMO fear missing out on high performance. They may chase a hot investment one day only to sell later when it fizzles.

There’s also FOLO—the fear of losing out. Not as widely known as FOMO, I’m using FOLO to refer to the anxiety investors have about losing money. This can lead some to sell or move to cash investments at the first sign of a rocky market and stay there.

Is anxiety dictating your investment decisions?

A plan can help alleviate worries and put you on the path toward your goals.


Self-Fulfilling Choices

Worry can skew perceptions and lead to decisions that give the very results you don’t want. For example, in the first six months of 2020, the stock market experienced one of the worst drops in history, but also one of the highest gains. The average for that period is actually modest, but many did—and still do—only focus on the dramatic drops.

Those in the FOLO camp may have moved into a money market (or out of the markets) and missed the big loss, but also the big gain. Unfortunately, this could have resulted in locking in the losses and missing the rebound.

Succumbing to FOMO can play out as selling at a loss and later buying high—the opposite of what you want to do. This market timing can expose you to missing out on what you want: Some of the market’s best days. That’s why we advocate time in the market as a better strategy.

Opt for Strategic Decisions

The good news is that you can make investing decisions based on proven strategies instead of emotions. There are ways to strike a balance and avoid guessing what to do next, including practicing these:

  1. Balance Risk. An alternative to staying on the sidelines is to match your portfolio risk to your goals and timeline. Also, realize that the extremes of “low risk” and “all risk” are not the only answers for your portfolio.
  2. Diversify. Adding a mix of several different investments in your portfolio has long been hailed as a practice to manage loss. The idea is that when one investment performs badly, others may offset it by performing well.

Add Balance to Your Portfolio—Two Resources for You

Trading One Risk for Another? Find the Right Balance explains how low risk impacts your rewards. It also reviews choices to keep your money growing. Read now

The Surprising Truth About Diversification further breaks downs this important principle and sets the record straight on what it is and is not. Learn more


Let Us Help

Investing during uncertain times can feel scary, but I encourage you not to lose heart—even if you made a knee-jerk reaction along the way. Instead, focus on a long-term plan that’s built just for you and your goals—including how you feel about risk. Need help with your plan? Don’t hesitate to call us.

As always, thanks for your confidence in us.


Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

Diversification does not assure a profit nor does it protect against loss of principal.


The Urgency of Emergency Planning

August 14, 2020

If this was 2019, I might be talking leisurely to you about the need to have an emergency plan. Now 2020 has made us more aware of how important that is. Fortunately, if we missed it the first time, hopefully there's a second chance to plan. Let’s take advantage of it.

The Best Time to Plan

Of course, we all know that you should plan BEFORE an emergency strikes. You don’t have to look far to see what happens when we’re caught unprepared. One of your top priorities should be working towards saving enough to cover three to six months of expenses. Sound daunting? Like most things in life, there’s nothing wrong with tackling it one step at a time.

There are a few things to consider for an emergency account.

Read Setting Up an Emergency Fund—What You Need to Know for some tips.


Remember the Basics

While the investment and saving side of planning are critical, other details require your attention. Having your accounts in order is also important in an emergency. And doing it now gives one less thing to stress over. Here are four things to do:

  1. Solidify your long-term plans. If you’ve put off an estate plan, I encourage you to take that step. Your financial plan isn’t complete until you have that in order. Legal documents include a will or trust, power of attorney and medical directives. You’ll also need to appoint people to carry out your wishes.
  2. Name names on your financial accounts. Make sure you have other people on your accounts who can or will take over. That includes beneficiaries on retirement accounts and interested parties on brokerage accounts. Bank accounts, credit cards and other investments will need the same.
  3. Stay organized. Keep papers in order, including account information, statements or other documents that you may need to get your hands on quickly. That also includes who you work with—financial advisors, attorneys, doctors, insurance agents, etc. Hard copy or electronic, make sure you can easily access the information, and others can too if needed.
  4. Share with loved ones. Finally, communicating with your family is a key part of being prepared. They’ll need to know where to find things and what’s in your plan. Together, you should also decide who will do what in an emergency.

It’s Work, but Worth It

Planning takes thought and commitment, but the result will be worth it. I hope you take that time for yourself and your family. And if you need help with your financial plan or updating your accounts, we’re available. For fast service, you can also update your beneficiaries on our website.

We’d love to help you prepare for whatever comes next. Don’t hesitate to reach out.


Family Money Discussions? Practice, Practice.

August 21, 2020

Why is it so hard to talk to our families about money? It can be uncomfortable for parents and children to have conversations about financial issues, even if they are your plans. Maybe it’s like other things we do—it just takes practice.

Money Talk Opportunities and Necessities

There are certain times in a family’s lifecycle when opportunities to discuss money arise and other times when it’s critical. Talks may be easier if you have them more often, starting when children are younger. But, if they’re older—even grown—it’s not too late.

Starting an allowance for a younger child or sending your high school grad to college (even virtually) are great opportunities to talk about money responsibilities. What if your grown child comes back to the nest? It’s also a good time to discuss finances.

Money talks with aging parents may be hardest for adult children and the parents themselves. No one wants to think about the need to help mom or dad with finances or caregiving. Parents may find it difficult to share their plans. However, these may be the most important conversations.

Need Help Discussing Money Plans With Your Family?

Get ideas and how-to’s in Family Money Talk: The Key to a Strong Financial Plan.


More Talk Can Make It Easier

I encourage you to make money talks a regular habit and to start somewhere. COVID-19 may give you an opening. As the pandemic stretches on, the need for planning continues for finances, retirement plans and unfortunately, health plans. Your family—even children—may feel more confident knowing there’s a plan.

Start Talking. We’ll Help With the Plan.

Remember we’re here to help with questions about your finances. If you find yourself facing a family tragedy, our estate transfer services may be able to help. Don’t hesitate to call us.

As always, thanks for your confidence in us.


Winning by Not Losing—A Good Strategy?

August 28, 2020

Discussions about upcoming sports seasons—or not—remind me of a long-held thought that more games are won by not losing. While that can be debated among sports fans and statisticians, the theory applies to investing as well. Let’s explore why.

“Winning by Not Losing” in Investing

Not losing in sports can mean building a strong defense or avoiding turnovers and errors. These also apply to how you handle your investments, which is especially important during volatile market times.

Do You Know How to Invest During Rocky Times?

Read our latest article: Volatile Markets? Kick Up Your Financial Knowledge.


Playing Defense

In sports, the goal of defense is to prevent the other team from scoring. For investing, the goal is to position your portfolio against losses. While we like our investments to perform well, behavior finance tells us that investors focus more on not losing than they do on winning big gains. 

There is something behind that fear; mathematically, investments are penalized more from losses than they are rewarded from gains. How? For every loss, you need exponentially higher gains just to break even, as shown in the illustration.

Cruel Math of Losses

Market corrections and losses will happen. When they do, investors must make up the loss—and more—just to break even.


Avoiding Turnovers

Turnovers in sports give the opposing team an advantage. With investing, mistakes or straying from your plan—such as jumping in and out of the market or chasing performance—can be negative for your long-term goals. These “errors” may result from fear or forgetting that losses can occur even when markets are performing well.

What Can You Do?

A principle that can help you play defense is having a proper asset allocation. It starts with diversifying, or including a variety of different stocks, bonds and cash in your portfolio, which may help cushion losses. Asset allocation is how much of each kind of investment you have based on your timeline and how you feel about risk. Having a mix that fits you can help you stay the course no matter what the markets are doing. It can also help you avoid the mistake of chasing the highest performers.

Let Us Help

Need help seeing if you are diversified properly and your portfolio risk matches your needs? Request a free portfolio review or let us answer questions you may have; just call us.

We’re serious about helping you reach your financial goals. Thanks for entrusting us with them.

Best Regards.


Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

Diversification does not assure a profit nor does it protect against loss of principal.

September


Your Investments in “This Normal”

September 4, 2020

While many are accepting life with the pandemic—rather than wondering when we’ll resume normal—one thing we’re not quite used to are stock market movements. Many were shocked by the drops earlier this year and the recent market highs have left some wary. When markets experience dramatic movements, it may be a good time to stick with active investments. Let’s explore why.

Get our perspective

 on what’s happening with the stock market and possible recovery scenarios in our latest article: The Disconnect: Pandemic vs. Market.


The Market Reflects Our Normal

If this were 12 months ago, few of us would blink if markets were hitting records. We had grown accustomed to the markets going up—at least most of the time. Today it’s different. The makeup of the market also tells a different story from what we knew just nine months ago.

Looking at the so-called “COVID-19 winners,” you see some stocks that were excelling before. The FAANG—Facebook, Amazon, Apple, Netflix and Google—stocks were doing well prior to the pandemic. As technology companies, their products also fit nicely into our new way of living.

However, that's not to say that the winners will always continue breaking records—as we saw this week. And other companies might be considered COVID losers because they have not rebounded at all. The market makeup is different from what we knew and it's not likely going back. It's a different economy.

Should You Change How You Invest?

If you’re confident that your investment plan still fits your long-term goals, the answer is no. If not, or you made sudden moves when the markets got rough, it might be time to evaluate. I believe the best place to be is in a diversified portfolio that fits your situation. However, given this different economy and new environment, now may be a good time to evaluate actively managed investments versus index or passive ones.

Active Investments in Volatile Times

Both active and index funds can have a place in your portfolio—it’s usually not an either-or choice. However, for volatile times, there may be some advantages to relying on the expertise and experience of an active portfolio manager.

Active managers can look below the surface of a company’s performance to see if its financials match what’s happening with the stock. They can also take advantage of opportunities or back away from risky prospects more quickly. The ability to pivot may be especially important during times of big market swings or uncertainty. Index funds don’t have the same luxury.

Are You Confident in Your Plan?

As important as the makeup of your portfolio is, it’s also important that you feel prepared for whatever comes next. If you need help evaluating your portfolio, you’re in the right place. A free portfolio review is available upon request. Just call us.

As always, thanks for your continued confidence in us.


Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

Diversification does not assure a profit nor does it protect against loss of principal.

References to specific securities are for illustrative purposes only, and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and, along with other portfolio data, are subject to change without notice.


Going the Distance

September 11, 2020

There’s not much most of us wouldn’t do for a loved one. Sometimes we care for a parent or someone else who can’t do it alone. The physical and mental strain can be difficult—especially if you don’t live close. But you go the distance no matter what. That same principle applies to investing, too.

Are You Caring for Someone From a Distance?

Get practical help about how to set up a long-distance care plan.


Caregiving: Pace Yourself

Dedicating your time and energy—and likely your money—caring for a loved one is not easy. It’s even harder when you don’t live nearby. I’ve experienced it myself, including the urgency of wanting to be there. One piece of advice: Don’t burn yourself out.

Instead, go step by step and enlist the aid of others. The last thing you need is to have your own health or finances suffer. Think of it as providing steady care rather than racing to do everything all at once. That’s actually a good idea for your investments as well.

Find Your Stride

Long-distance runners pace themselves so they can cross the finish line. With investing, setting your stride starts with an investment plan that is your “speed”—one that considers when you need the money and how much risk you can tolerate. What does not work are “sprints” or “detours.”

  • The sprint is attempting to reach the finish line with highly aggressive investments—usually to make up for a lack of savings or losses. It can be too risky, especially with uncertain markets.
  • The detour is side-stepping a solid plan by jumping out of the market to avoid losses or jumping in to capitalize on gains. Market timing can be detrimental to your goals.

Take Your Time

We believe time in the market is superior to trying to time it. Staying invested lets you take advantage of compounding—making money on your original investment as well as on the earnings. Also, when you’re already invested, you won’t miss a potential market spurt.

How Can We Help?

When caring for a loved one, remember to care for yourself and your own finances—pace yourself. Do the same with your investments. In either situation, we’re here for the financial side. If you need help, please call us.

Thanks for putting your confidence in us to manage your money.

Best Regards.


Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.


What’s Your (Investing) Type?

September 18, 2020

People have different relationships with their investments—just like they have different connections with people. Some believe it has to do with your investing personality. It’s an interesting concept and one that may give insight into how you make decisions.

Your Investing Personality

Your relationship with your investments is likely linked to your family’s view of money and your own experiences. Psychologists and behavioral finance professionals say it also involves your personality, which they classify into different types based on research.

Let’s review those developed by Jonathan Myers,* an industrial psychologist who believes your investing personality doesn’t change much under different circumstances. Based on that premise, events such as COVID-19 would not have much impact on how you handle investing decisions.

Professional Money Managers Use Multiple Traits

Our experts use research, data analysis, experience to manage money. Get a sense of how they do it in our latest article: Fundamental vs. Quantitative Investing: Same Goal, Different Process


Do You See Yourself in Any of These?

  • Cautious Investors don’t like risk or losing money. They usually make few portfolio changes and may be wary about financial advice, preferring to do their own research.
  • Emotional Investors follow the latest trends and make decisions on instinct. They may hold on to an investment—even if they shouldn’t—because they believe everything eventually works out.
  • Technical Investors follow the numbers when making investment decisions. Research and diligence are their mantras.
  • Busy Investors are aware of everything that’s happening with the markets and may make decisions based on what they hear. They check prices often and may buy and sell—a lot.
  • Casual Investors are busy with work and family, using a “set-it-and-forget-it” style. They rarely check on their finances, preferring to leave it to professionals who they may or may not be in contact with regularly.
  • Informed Investors use information from many sources and keep watch over their investments, markets and the economy. They listen to experts and are confident in their decisions—relying on knowledge and experience.

The Markets Speak—Should You Listen?

Some investors tune in daily to market feeds, economic news and government actions, such as the Federal Reserve meeting this week. Should you react? It may depend on your knowledge and how close you are to your goal—such as retirement. We can help with the big picture. Learn about the Fed’s monetary policy and how changes may affect you.


Work With Your Style

Knowing the personality type(s) that made you say, “That’s me!” may help. It can enable you to lean on your strengths and avoid potential pitfalls when making investing decisions.

All personalities are welcome here. It’s why we offer a variety of services for how people like to work with us. Whether you’re a DIYer, looking for occasional guidance or prefer to leave it to the professionals—we’re here for you. Don’t hesitate to call us.

*Myers, Jonathan. What Kind of Investor are You? www.codeinvesting.com, 2017.


Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.


Down the Home Stretch: Rein in Emotions

September 25, 2020

Whew! We made it to the fall and are nearing the final lap of the year. It’s still 2020, so that doesn’t mean we’re “home free.” What could possibly go wrong? From continued COVID-19 cases to economic uncertainty and a charged election period—there’s plenty to stir our emotions. Let me offer possible solutions for feelings about your finances.

Concerned About the Elections and Your Investments?

Get perspective in our latest article: Stocks Are the True Independents in This Election.

 

Keep Blinders On (When Needed)

When emotions run high, I recommend tuning out distractions. The latest news can prompt undue worry, especially if your investment plan fits your goals. If you’re less confident, it may be time to revisit your plan.

Another way to tune out noise is to practice healthy financial habits. Stay invested and avoid knee-jerk financial decisions. It can have a negative impact on your goals.


Beat Money Stress With Healthy Habits

Read Financial Stress: The Link Between Health and Wealth


Refocus Your Emotions

What does an emotional decision look like? According to one psychologist, an emotional investor may follow the latest trends and make choices based on instinct.1 Emotions may drive you to:

  • Choose investments based on a gut reaction
  • Jump into a high-performing investment without much research
  • Hold on to a bad investment because you still hope for the best

Is there a place for emotions when investing? Money is one of the most personal things we deal with so it naturally evokes feelings. The solution may be to refocus them.

One way is to rein in your emotions for short-term decisions but use them to your advantage for long-term ones. Turn your ability to persevere into a commitment to a solid financial plan. And channel gut instincts into taking smart risks—ones that offer potential rewards—and aren’t merely popular trends.

Another way you can offset emotions is to set up convenient automatic investments. Automatic investing removes questions about when to invest and lets you take advantage of market swings. You buy more shares when prices are low and fewer shares when they are high.2

Keep Calm and Ask for Help

Whatever sparks your emotions, I hope you find peace in focusing on what’s important, including your future. And if you need help with the financial side, don’t hesitate to call us. Like everything else in 2020, we can get through the rest of this year together.


1

Myers, Jonathan. What Kind of Investor are You? www.codeinvesting.com, 2017.

2

Dollar cost averaging does not ensure a profit or protect against a loss in declining markets. This investment strategy involves continuous investment in securities, regardless of fluctuating price levels. An investor should consider his or her financial ability to continue purchases in periods of low or fluctuating price levels. 

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.


October


Different Season, Same Principles Apply

October 2, 2020

Normally this is the time of year when people start looking forward to the holidays. In fact, the shopping countdown has already begun. (If you’re keeping count, it’s less than 90 days!) Like everything else we’ve experienced in 2020, this upcoming season will likely not be the same. Even when everything is different, there are principles that don’t change.


What Does the Last Part of 2020 Have in Store?

Read our investment professionals’ outlook for the fourth quarter.


A Different Season

Some predict a disappointing holiday season due to the pandemic. Even the fate of trick-or-treating hangs in the balance. The continued fallout will certainly impact many families in varying degrees and possibly yours too. Remember, we’re here if you have questions or need help with your finances.

In a normal season, we’d talk about not overspending and sticking to your budget. It’s still a smart plan for your cash, whether you celebrate the same or not. For your investments, there are principles that apply through all seasons.

Principles Are Always in Season

Smart investing principles are never out of season. It’s true when markets go up and when they go down. It’s especially true in times of uncertainty. Below are three principles for the top of your list.

  1. Practice proper asset allocation – The appropriate percentage of stocks, bonds and money markets can help balance your portfolio and aims for a risk level that fits you. This balance may help your investments withstand a variety of market conditions. And having several investment types is designed to offset losses in one area with potential gains in another.
  2. Stick with it – As important as asset allocation is, it may not help if you knock your portfolio off balance. Some investors may be tempted to sell stocks and bonds, moving their funds to a money market in an effort to avoid losses and “play it safe.” Taking such actions may come with “opportunity costs.” It’s important to consider how much growth (opportunity) you might miss out on in a potential market rebound.
  3. Match actions to you – Don’t get me wrong, money markets play an important role in a portfolio. The question is how much you need. Depending on how soon you need the money, a higher percentage may be the right choice. My point is that whatever actions you take need to match your goals and timeline.

LEARN MORE ABOUT THESE PRINCIPLES AND HOW YOUR ACTIONS CAN IMPACT YOUR INVESTMENTS.

Read Trading One Risk for Another? Find the Right Balance.


Different Season, Same Promise

Another thing that hasn’t changed is our commitment to you. We’re still in the business of hope for the future and for your success. 


Diversification does not assure a profit nor does it protect against loss of principal.

Generally, as interest rates rise, the value of the securities held in the fund will decline. The opposite is true when interest rates decline.


Who Wants to Hear a Scary Story? Not Me!

October 9, 2020

There have been plenty of frights for investors this year—the pandemic, market volatility, economic news, political uncertainty and more. We’ve covered them frequently over the past several weeks. Now I want to turn to some practical ways to help manage two things that people can get the jitters about: Taxes and protecting your personal information. Both can be scary topics, but there are ways to alleviate their threats.

Bust Tax-Time Fears

Tax time can be an investor’s—really anyone’s—least favorite time of year, especially when figuring out if you owe taxes. Did you have a gain or a loss? Did your fund pay dividends? Then there’s the sometimes-complex task of figuring your cost basis—used to calculate gains or losses based on the price you originally purchased a security or share. Some may dread the paperwork. Others just get nervous when it comes to anything dealing with taxes.

Why am I talking about taxes in October? There are things you can do—even starting now—to make tax time less frightening next April. A few have a December 31 deadline so I’m bringing them to your attention now. And yes, it also goes with my spooky Halloween theme, but that’s not the main point. Read the article below for nine tax items that you can start thinking about now.

 

Thwart Identity Tricksters

Identity theft has been a threat for a while. Unfortunately, the pandemic has not slowed down scams, or people’s fears. According to a recent Transunion study, 83% of people are worried about having their identities stolen and stress over it has risen 32% during COVID-19. Even more scary,10% of U.S. adults became victims of the crime during this time.*

Here at American Century Investments, we take seriously your private information and the security of your money. Along with the precautions we take, we also know that protecting your identity requires a partnership between us and you. There are things you can do both online and offline. Read the article below to get our latest tips on protecting your information. 


Find out what you can do to help safeguard your private information and your money.

Read Protect Your Data — and Your Dollars


Handle the Tricks, Enjoy the Treats

After what we’ve experienced so far in 2020, I think we could all use a break for the rest of the year. Will we get it? Who knows, but I encourage you to take advantage of our tax-time tips and learn ways to help protect your identity. Acting now may allow you to treat yourself to less stress in the coming months.

If you need help with your investments, remember we're here for you. You can still speak to a real person when you need to. Please don’t hesitate to call us. As always, thanks for your confidence in us.


*COVID-19’s Impact on Online Government Services, Transunion, August 2020.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.


Beyond Who’s President, There’s SALT

October 16, 2020

As we count down to the November elections, many people focus on who will be president for the next four years. Presidents may help decide the direction of the country, but for your personal finances, you may want to look closer to home. Local races may have more impact because of SALT (state and local taxes).

The President and the Stock Market

Presidential elections can definitely impact the markets—especially leading up to election day. The oftentimes-charged season can result in uncertainty, and that can be unnerving to investors. In fact, in one of our recent surveys, 32% of clients said that the election was their single biggest investment concern, followed by market volatility and the pandemic.

But after an election, the individual and party winners don’t seem to matter much to the markets, if history is a guide. Still, the results may have a role in policy decisions and affect certain industries. Read our take on some of the potential outcomes.

Global Markets at a Crossroads

     


Don’t Pass On the SALT

State and local taxes may actually have more of an influence on you than who lives in the White House. From schools to water service to roads, local governments play a big role in quality of life. And because they are typically smaller elections—with lower turnouts—your voice may count even more.

You’ll also see impacts on your money. Local governments impose property taxes and sales tax on what you purchase and consume. That can affect you and your family’s discretionary income and the amount you can invest for the future.

Be Heard and Stay Calm

Voting is a privilege we should all exercise—for all levels of government. I encourage you to also stay strong in your investment plan, particularly if you’re watching the markets react leading up to Election Day. In the next few weeks, be sure to watch your inbox for more perspective about elections and the markets.

In the meantime, remember that volatility is normal—even in this everything-but-normal year and election process. Our Volatile Markets? Kick Up Your Financial Knowledge article may help give you some perspective.

Also, if you’re wondering about your investment plan, remember we’re here for you. Please don’t hesitate to call us.


IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.


Don’t Invest Based on a Single Story

October 23, 2020

Election decisions based on one candidate or policy may not provide the results you expect—rarely are issues settled soon after all the votes are in. Investing decisions on a single event, such as an election or a market reaction, may not give the desired results either. You could succumb to what novelist Chimamanda Adichie calls the “danger of a single story” and miss the bigger picture.*

When you consider a collection of stories and experiences, it can help you make more informed decisions. It’s how we manage your money. I believe it’s a good approach for you too.

Find out why our investment professionals make decisions based on process over politics.

     


Add to Your Collection

How do you look beyond single stories that market and news headlines tell us nearly every day? Take a page from our investment professionals’ playbook: They make decisions objectively (based on data), systematically (following repeatable processes) and in a disciplined way (true to their objectives). Here are my thoughts on how you can do the same with your investments.

  • Stay Objective – Ignore the emotions of today’s turmoil and keep focused on your long-term goals. There will always be uncertainty, but history shows that long-term investing can have rewards.**
  • Make It Systematic – Keep investing even through the trying times. Investing regularly helps you keep your long-term goals a priority.
  • Practice Discipline – This has to do with your investment plan. Have a mix of different investments—known as diversification—to help balance your portfolio through market ups and downs. Then, stick with it no matter what stories you may hear, but remember to reevaluate periodically to ensure you're on track.

Let Us Help Unravel the Plot

Sometimes it’s hard to know which stories to pay attention to. That’s where we can help with both how we actively manage your investments and our commitment to help you reach your goals. Our consultants are here to evaluate if your plan fits, so you don’t have to be swayed by a single story. Don’t hesitate to call us if you need help.


*Chimamanda Adichie, TEDTalks: The Danger of a Single Story, 2009

**The average annual returns of the S&P 500 since 9/30/2000 is 6.42%. Cumulative returns since that time are 247.10%. Fact Set data as of 9/30/2020.
The S&P 500® Index is composed of 500 selected common stocks most of which are listed on the New York Stock Exchange. It is not an investment product available for purchase.

Diversification does not assure a profit nor does it protect against loss of principal.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.


Election Drama: It Just Takes Time

October 30, 2020

This year’s election seems more charged than usual—although we may have thought that four years ago as well. Add in dramatic predictions that final results may not be known for a while, and we could be in for more market uncertainty past Election Day. What should you do? Remember that time in the market is a better strategy than attempting to time when to buy and sell to achieve a gain or avoid a loss.

A Repeat of 2000? Sort Of

The thought of an unresolved or contested election feels unnerving. However, not all races have had an immediate clear winner. In the 2000 election, we waited for Florida recounts and “hanging” chads (paper fragments from punched ballots) to have their day in court. The Supreme Court settled the matter on December 12. And while lingering election results can lead to more uncertainty, it shouldn’t change how you invest when you have a solid, long-term plan.

Election Plus Pandemic Equals More Uncertainty

Find out what steps you can take for your portfolio in our latest article: “Ballots, Bulls and Bears.”

 

Time In vs. Timing

Why is it important to keep investing during uncertain times? For the same reasons you should continue to invest when markets are going up. No one can predict the best time to buy or sell. Even if some claim occasional success, market timing is not sustainable. Jumping in and out of the markets can lead to missing some of its best days and that can impact your goals.

No Guessing, No Speculating—Investing Is Long Term

The purpose of investing is to accumulate money for your goals. It’s not about timing, guessing or even speculating. An investment plan helps you focus on your future and take advantage of the power of compounding over time.

Compounding means earning money on your original investment plus on those earnings. The longer you stay invested, the more potential it has to grow exponentially. This can be demonstrated by the Rule of 72* —a long-held rule of thumb that estimates how long it might take to double an investment based on an fixed average rate of return. It is calculated by dividing 72 by the rate of return. 

According to the rule, here’s how long it could take to double an investment:

Rate of Return Estimated Time to Double an Investment
6% 12 years
8% 9 years
10% 7.2 years

This hypothetical situations contain assumptions that are intended for illustrative purposes only and are not representative of the performance of any security. There is no assurance similar results can be achieved, and this information should not be relied upon as a specific recommendation to buy or sell securities. The examples assume a fixed 6%, 8% and 10% average annual rates of return.

 

In addition to showing the potential effects of compounding, the rule illustrates the potential value of investing over time. But note that these are estimates only. You need to hold an investment for a length of time to get an actual average. For a more detailed estimate for an invested amount (such as $5,000) at a fixed return rate, use our future-value calculator.

Time Will Tell

Elections may not get resolved as soon as we want and uncertain markets may continue, but don’t discount the reasons to keep investing. If you need to confirm that your investment plan fits your goals, don’t hesitate to call us.


*The Rule of 72 was first mentioned in 1494 by Italian mathematician Luca Pacioli. There is no explanation as to why the number 72 works but the results are fairly close to calculations using more complex equations or a calculator. Source: Dennis Hammer, Wealthsimple, May 2020.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

November


And Now We Wait

November 5, 2020

As some predicted, we’ve entered into more unknowns for the 2020 election. Is it a surprise? Not really, given the pandemic, record numbers of mail-in ballots and varying deadlines for each state. 

Delayed results feed market uncertainty, but history shows us there’s nothing new about volatility surrounding elections—even contested ones, as we saw in 2000. In this case, it may linger until we know the final outcome. However, the current uncertainty is not a signal to change how you invest or to make snap decisions. 

Stay Focused as You Watch and Wait

Regardless of who ultimately wins or loses, I believe keeping a long-term view is important for these times. Also keep in mind that historically, the markets don’t care who is in the White House, or which party they belong to. 

Policies may be more important in the long run. In my opinion, that’s one more reason to rely on professional money managers to stay on top of how any changes may impact investments. Our experts are already thinking ahead. Read their views on how each candidate’s policies might affect certain industries in Global Markets at a Crossroads.

We’re Here to Help

It’s natural to feel unsettled when there’s no deadline on the uncertainty. But don’t let that deter you from your long-term plan. Our consultants are here to review your plan or confirm that you’re on the right path. Want to talk? Request a call.

We’re in this together, and for your finances—we’re here for you.


Now What?

November 13, 2020

With the current state of the 2020 election, there’s talk about what happens now. Will there be a shift in direction? The upcoming balance of power won’t likely spell sweeping change. But there are policy transitions to watch—some of which may affect your finances.

Biden Won’t Ride a Blue Wave, But Change Is Coming

Read our chief investment officer’s perspective on what a Biden presidency could mean.


Your Finances and What We Do Know

Regardless of the specifics about the election and who’s in or out of office, there are certain things to consider for your personal finances. One is potential taxes and the other is current low interest rates. Let’s look at each one and how they may impact your financial situation.

Taxes: Covering the Cost of the Pandemic

While our chief investment officer doesn’t foresee Congress raising taxes for corporations and high wage earners anytime soon, the bill for the pandemic still lingers. The necessary stimulus to keep our people and economy going did not come cheap. It’s no secret that federal and local budgets are feeling that distress. Sooner or later, we’ll need to address government budgets and the national deficit. Down the road, our choices may be higher taxes or fewer services.

For your own finances, future taxes can be significant, especially in retirement. Typically retirees experience lower taxes during that time. The choice regarding a Traditional IRA, Roth IRA or both can have meaningful tax consequences now and later. Compare here.

Low Rates: What Does That Mean?

Another given is that the Federal Reserve (the Fed) plans to extend current low interest rates for some time. Their most recent statement indicates rates will remain near 0% through 2023. This commitment signals the Fed’s effort to help the U.S. economy recover. While low interest rates don’t do much for savings accounts and some bond investing, you may find other advantages for your finances.

If you’re in the market for a new mortgage or looking to refinance or take on other debt, borrowers benefit from low interest rates. It usually results in having more money to spend. If you’re retired or getting close, you might have a different view of low rates, and may be seeking higher yields.

For higher yields, there are a number of investments you could consider, with varying degrees of risk. Some of those include securitized (a collection of underlying bonds) and corporate bonds, high-dividend stock funds or even convertibles/ preferred stocks.* Of course, any decision you make depends on your individual situation, risk tolerance and timeline. A consultant would be happy to review your options.

Keep Your Long-Term View

Whatever decisions you make for your personal finances, remember to keep a long-term investing view. Through the pandemic, election fallout or policy shifts, a solid plan may help you have a better chance for long-term success.

If you don’t feel as confident as you’d like about your plan—or just need a second opinion—that’s where we can help. Don’t hesitate to call us.


*Convertibles/preferred stock are offered by corporations to raise capital. They do it by selling shares (equity) instead of debt like they would with a bond. Preferred shares are a type of hybrid security, falling somewhere between debt and equity. Convertibles are stocks that a holder can convert to common shares at a predetermined date. The value is based on the common stocks’ performance.

Generally, as interest rates rise, the value of the securities held in the fund will decline. The opposite is true when interest rates decline.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

Please consult your tax advisor for more detailed information regarding the Roth IRA or for advice regarding your individual situation.

Taxes are deferred until withdrawal if the requirements are met. A 10% penalty may be imposed for withdrawal prior to reaching age 59½.


Could There Be a Silver Lining to Spending Changes?

November 20, 2020

This year we’ve all made life adjustments—how we connect with each other, where we work and maybe even our perspectives. A pandemic can have that kind of effect. However, one thing that hasn’t changed for your personal finances is the need for a budget. As we think about the changes—and head into holiday shopping season—now may be a good time to revisit or start a spending plan. You may find some of the budget updates are good for your finances.

Living and Spending With COVID-19

Months ago we talked about life after the pandemic. Now? Most people have settled in to life “with” COVID-19. Unfortunately, we’re hearing talks of a second wave and reports of higher positivity rates in many states. Work as we knew it also changed, with 40 to 50% of Americans now working from home.1 Not only has that changed how people do their jobs, but also how and where we spend money. And that can affect our economy and investments too.

How Has Working From Home Changed Our Economy?

Read our investment professionals’ analysis on the impacts of spending changes.


A Potential Silver Lining for Your Finances

If you’ve pulled back on discretionary purchases (spending on extras) since COVID-19, you’re not alone. A recent survey reports that even now, most people are focusing on necessary purchases. They also look for value, choosing lower-cost brands. For the holidays, many plan to shop online and spend less than in previous years.2

Less spending can be positive for personal budgets. If you find yourself spending less on discretionary items, you may have more to save and invest, or to pay down debt. That can mean good news for just-in-case funds, your long-term goals and your overall financial health. If you’re close to retirement, you might also think of this time as a trial run for the future—when you may want to possibly live on less. All these good financial habits are a gift you can give to yourself this season.

We’re Here to Help

If you need help with budgeting or any other financial needs, our consultants are here to help. You can also find out more about budgeting in our New Normal, New Budget? article. And don’t hesitate to call us.


1Stanford Institute for Economic Policy Research (SIEPR), data from a survey of 2,500 U.S. residents carried out between May 21-29, 2020.

2McKinsey & Company, Survey: US Consumer Sentiment During the Coronavirus Crisis, October 2020


Give Thanks, Take Time

November 25, 2020

Despite the health and financial issues we still face this year, I think most of us can find things to be thankful for. And while we may not celebrate as we have in the past, I hope your Thanksgiving or Friendsgiving is meaningful; that you connect with others (even virtually) and take time for yourself. I say we all deserve it.

Give Your Budget a Break Too

Some of you look forward to the kickoff of holiday shopping, but we know that will be different too. As always, we encourage you to set a spending limit that works and stick with it. That’s one way to give your finances a break this season. Read our tips to help make it less stressful.

Even Santa Has a Budget

Holiday spending can make or break your budget—and your future.


Have “We” Time and “Me” Time

With the guidelines from public health officials, most of us won’t find ourselves around a crowded table or in large groups. But that doesn’t mean we can’t enjoy other people. From outdoor small gatherings to toasting virtually, I hope you find ways to make those connections—and remember those who may be alone. Maybe that’s delivering a meal to a friend or neighbor’s doorstep or to a local shelter.

Also find time for yourself. Take time to relax and find ways to refresh mentally and physically. And whatever you do, leave the guilt behind for taking time to pause.

We’re Thankful for You

From our entire team here, let me share our thanks for you. It’s been a tough year, and we’re grateful for how you’ve stuck with us and allowed us to share our perspective in these trying times.

Many of you have gone the distance with us—nearly 20 years or longer—which is actually the average tenure of our clients. We appreciate your trust; your success is still our primary commitment. If you’re newer to American Century,® I hope you feel that same dedication to you and your financial goals.

And as always, if you need help, please don’t hesitate to call us. We’re here for  you.

December


Finances Today and Tomorrow: Time for a Reset?

December 4, 2020

If this were any other year, we’d be talking about rebalancing your portfolio: buying and selling investments to get it back to your original risk level after a bumpy market year. While rebalancing is still important, a larger reset may be needed after all the life changes of 2020. There won’t be a replay of pre-COVID-19 days—things have changed too much. It might be time for a financial reset.

The Financial Restart After COVID: Reevaluating Choices

Consider whether your goals have changed since the pandemic.


Reset Today’s Finances

In addition to reevaluating future goals, you might also consider what changes may impact your finances in the next few years. And that’s not just for those who may have experienced a major financial setback from the pandemic. If that describes you, let us know how we can help.

What if your finances stayed similar, but every other way you live has changed? That may call for a reset too. Even with the promising news about vaccines and other treatments for more serious COVID-19 symptoms, none of us should assume that life will be exactly the same as before.

In fact, many believe the changes will be more permanent, including how we work and spend money. Both have impacted businesses and our economy long-term. These may be reasons to rethink your personal finances and investment choices. Our investment professionals are already doing that for you too, as they consider companies and investment trends in the current environment and as they look ahead.

Reset Your Perspective

The pandemic may have also given you a new perspective. Before the pandemic, few could fathom quarantines or long-term school and business shutdowns. And who would have thought masks would be the new fashion trend?

Now we know the very real importance of preparing for such things. It also may mean your priorities have changed. What was important to you 12 months ago, may not be the same. A change in mindset can alter how you view your finances today and for your future.

Let Us Help

If you need help talking through your finances or goals, we’re here to help. We can also help with a rebalance to make sure you have the right amount of risk for you. Either way, please don’t hesitate to call us.


Rebalancing allows you to keep your asset allocation in line with your goals. It does not guarantee investment returns and does not eliminate risk.


Consolidating: Gift or Grind?

December 11, 2020

A lot of financial companies talk about consolidation—having your investments in one place. Why? Streamlining with one firm does have its benefits. So why does it seem complicated and almost opposite of “not putting all your eggs in one basket?” Let’s explore these ideas and some thoughts that might make it more of a gift for your investment goals.

A Gift of Simplicity

The idea of consolidating money isn’t new. Many people consolidate debt or student loans to get a single lower payment. That kind of consolidation can save you money and make it easier to manage your bills. However, the caution is not to take on new debt and wind up owing even more.

For your investment accounts, easier management can be a reason to consolidate too. It can also help you have a clearer view of the amount of risk you have or let you know if you have overlaps you don’t need. Read more about these benefits in our article below.


The Grind of Consolidating

I’ve heard more than one investor say they are wary of consolidating because it seems to contradict not putting all your eggs in one basket. While the egg analogy actually is about diversification—not investing in all the same kinds of assets to avoid a big loss, I understand the sentiment. Others think it sounds complicated, and it can be if you have to do it on your own.

Still others go so far as to have more than one advisor—maybe that’s the “two heads are better than one” thinking but it can also be confusing. What if your advisors don’t agree? It can also cost you more in fees. So what’s the answer if you’re wary of having just one company or one advisor? Maybe look at it more in terms of location.

Consolidate by Location

When you consolidate in one place, it can feel like you’re losing something—maybe variety. What if you look at it in terms of location instead? For example, I have my growth investments here, I have my fixed-income investments there.

Or look at it in terms of goals. I have my long-term investments at this firm and my short-term investments with that one. This idea of a “semi consolidation” could still help you simplify managing your accounts, but also help you not overlap investments for certain goals or run the risk of having too much of one thing.

When to Consolidate

Still I think there are circumstances when you may want to consolidate in one place. If you have 401(k)s from former jobs here and there, it might make sense to have your retirement money together where you have more control, especially if your money is in a default fund and if you can’t add to it.

Another time people like to consolidate is when they get closer to retirement. At this critical time for your investments, you especially want to know the amount of risk you have and you may also want to have that one trusted professional looking out for you.

Let’s Talk About You

Consolidating your investments (or not) is a significant decision, but it’s one you don’t have to make on your own. Our consultants are here to help. Please don’t hesitate to call us. And if you do decide to consolidate here, we ’ll help with that too.


Diversification does not assure a profit nor does it protect against loss of principal.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.


Make Your List; Check It Twice

December 18, 2020

From gift shopping to special menus, holiday lists can help us remember all that needs to be done to celebrate our traditions—regardless of how they’ll look this year. With the holiday bustle and news headlines about all that’s happening in our world, it’s easy to get distracted. Let’s not lose sight of some things that can help us stay focused on future goals, starting with keeping your investment accounts updated.

TOP 10 TIPS TO MANAGE YOUR ACCOUNT

These simple steps can help you keep an eye on your money and make informed decisions.


Add These to the List, Too

In addition to checking items off your account management list, there are other important tasks for managing your money. Here are a few to consider for this month and the year ahead.

1. Stick to your budget now.

Holiday time has traditionally been a period when people overspend. Early on, retailers predicted that shoppers would spend less due to the pandemic. However, the latest forecasts show that retail sales will rise, up to 5.2% this year.*

While projections for a strong ending are good news for retailers and the economy, don’t let it turn into bad news for your personal budget. The last thing you want is spender’s remorse when the bills come due in January. For information on budgeting and why it’s important for your financial future, read our Holiday Gift Guide: Is a Budget on Your List?

2. Start thinking about next year.

Just like a long-term plan is important for your future, short-term to-dos can help you stay on track with some investment must-dos. Here are a few that you might want to plan for now:

  • Required Minimum Distributions (RMDs). If you are age 72 or older, start a list for these IRS-required withdrawals from retirement accounts. While RMDs were waived for 2020, that’s not the case for 2021. What should you think about? First, it’s important to calculate the right amount to avoid penalties. Secondly, have a plan for the money. If you don’t need it as income right now, you have alternatives such as moving it into a taxable account. To get started, familiarize yourself with RMD guidelines.
  • Tax time is coming. Who wants to think about taxes at the holidays? I’m only mentioning it because the end of the year means some funds may pay distributions. And, if you transacted on your account this year, you’ll be receiving tax forms  a few weeks after the new year. Get a jump on tax-time planning with the many resources you’ll find in our Tax Center.

Lists Are Good, but So Is Personal Help

Santa has lists and we know he checks them twice, but he also has lots of helpers. Actually, so do you. Our consultants are available to help you check some items off your list, or with any other financial need. Please don’t hesitate to call us.

*National Retail Federation, November 2020.


The Gift of Family Money Talks

December 24, 2020

Many look forward to time spent with family over the holidays. Even if virtual or socially distanced this year, it can still be a special time. Sometimes awkward topics surface, including discussions about money. Do you avoid those uncomfortable subjects? They can be difficult for sure, but consider how these talks could be a gift for you and your family.

Money talks are important, but so is managing your home life.

As we continue to deal with the pandemic this holiday season, controlling what you can is still important. Read our top tips for managing your household.


Which financial conversations do you dread the most?

In a recent survey, we asked clients which conversation topic is the hardest.
Here’s how they ranked the top three:

Inheritance and final wishes

Debt

Taking/giving up financial control

 

Need help with these talks and others?  Get tips with our family and finance articles.

Source: American Century Investments, December 2020.


A Hidden Gift

Parents may find it difficult to talk to their children about money because they don’t feel qualified—especially if they’ve had a financial stumble along the way. However, the lessons you learned may be the best gift to help your kids avoid the same pitfalls.

On the flip side, adult children may dread money conversations with their parents—especially about getting older and the struggles they may face. No one wants to consider the unthinkable, let alone talk about it. But the truth is, these conversations will help you all be prepared. More importantly, it will help you be on the same page for whatever the future holds.

Give This Gift to Your Family

Many will give and receive gifts over the holidays. I encourage you to put the gift of conversation—even awkward money talks—on the list for you and your family to discuss one day soon. Remember, we’re also here to help if you need to talk over the finances. Don’t hesitate to call us.

From our American Century Investments family to yours, we wish you the happiest of holidays and much peace in this year like no other.


Great (or at Least Hopeful) Expectations

December 31, 2020

The new year brings hopes that 2021 won’t be a repeat of this year. Many look forward to a new start and anticipate that next year will be better, or at least not worse. I’m glad that we can still have some optimism after this year of struggles. And in spite of ongoing economic challenges, our investment professionals will continue looking for opportunities created in this environment. We’re also making a small change to our email newsletter that I want to let you know about.

What do our investment professionals anticipate as the new year begins?

Find their latest views in the 1Q 2021 Investment Outlook.


What Are Your Expectations for 2021?

A recent survey reports that 44% of Americans say 2020 was bad or terrible, while 37% said it was OK. Will next year be better? The same survey says that 44% of us expect it to be, and 30% say 2021 will be about the same. The rest aren’t sure or expect it to be worse.*

Compare that to a similar poll a year ago where 58% of people were full of hopes for 2020.* The results show the pandemic’s effect on our optimism a year later. Still, some may wonder if it could get any worse. I think it depends on how severely the health and financial trials touched you or your loved ones, as well as how deeply you may have been impacted by the social issues that came to the forefront.

Personally, I’m hoping advancements on the medical front and our improved awareness point to a more peaceful new year. And if 2021 doesn’t meet our expectations? We can build on the lessons and adjustments we made this year and keep moving forward. No matter what’s in store, I’m confident we’ll get through next year, too.

Small Changes for 2021

One of our responses to the pandemic and subsequent market volatility was to communicate to you weekly. Things moved fast and we knew it was important to help you stay informed and give our perspective.

For 2021, you’ll still hear from us about topics that are relevant for your finances and your families, just not weekly. In addition, you’ll receive other communications that align with your investments.

Expect Us to Help

Regardless of how often you receive an email newsletter from us, our availability to you will stay the same. You can continue to connect to a real person, so please don’t hesitate to call us.

Let me end this anything-but-normal year by thanking you for your continued trust and confidence. And from all of us here, we wish you and your family hope and happiness in the new year.


*Many Americans Say 2020 Was Terrible, But 2021 Will Be Better and Are You Feeling Optimistic or Pessimistic About 2020, yougov.com, December 2020 and December 2019.

Let Us Help You Make Smart Risk Decisions for Your Goals

* EBRII Issues Brief: Older Americans' Spending Profiles: One Size Does Not Fit All, December 2020.

The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

American Century Investments is not responsible for and does not endorse any comments, content, advertising, products, advice, opinions, recommendations or other materials on or available directly or via hyperlinks from Facebook, Twitter or any third-party website. Facebook, Twitter and LinkedIn are registered trademarks of their respective owners.