FINANCIAL FOCUS – Time To ‘Cycle’ Through Some Investment Ideas

Join Connecting Atlanta on LinkedIn and Facebook.

If you’ve noticed an increase in bicycle-related events lately, it may be because May is recognized as “Bike Month” – and some cities even observe a specific Bike Week. Of course, bicycling is good exercise and an environmentally friendly method of transportation, but it can also teach us some lessons about investing.

Here are a few to consider:

  • Put the brakes on risky moves. To keep themselves safe, experienced cyclists regularly do two things: They keep their brakes in good shape and they don’t take unnecessary risks, such as whipping around blind curves. As an investor, you can combine these two actions by putting your own “brakes” on risky moves. For example, if you’re tempted to buy some hot investment you heard about, you may want to think twice before acting. Why? In the first place, most “hot” investments don’t stay hot for too long, and may be cooling off by the time you hear of them. And even more important, they might not be appropriate for either your risk tolerance or your need to diversify your portfolio. When you invest, you can’t eliminate all risks, but you can reduce them by avoiding impulsive moves and sticking with a disciplined, long-term strategy based on your needs and goals.
  • Get regular financial tune-ups. Avid cyclists keep their bikes in good shape through regular maintenance. When you invest, you usually don’t need to make a lot of drastic moves, but you should periodically “tune up” your investment portfolio, possibly with the help of a financial professional, during regular reviews. Such a tune-up may involve any number of steps, but the main goal is to update your portfolio so it reflects where you’re at in life – your goals, risk tolerance, earnings and family situation.
  • Protect yourself from bumps in the road. All serious bicyclists – and all bicyclists serious about keeping their heads intact – wear helmets when they are riding, because they know the dangers of rough terrain. Likewise, you need to protect yourself from the bumps in the road that could impede your progress toward your objectives. For starters, life insurance can help your family meet some essential needs – pay the mortgage, educate children, and so on – in case something were to happen to you. And you may need disability insurance to replace your income temporarily if you become injured or ill and can’t work for a while. Also, you might want long-term care insurance, which can help you guard against the potentially catastrophic costs of an extended stay in a nursing home or the services of a home health care worker.
  • Don’t stop pedaling. When going long distances, bicyclists ride through rain, wind, sun and mosquitoes. They elude angry motorists and they change flat tires. In short, they persist in reaching their destinations. As an investor, you will pursue some goals that you may not reach until far in the future, such as a comfortable retirement, so you too need to demonstrate determination and persistence by continuing to invest, in good markets and bad, through unsettling political and global events – and even despite your own occasional doubts.

Whether you’re an avid cyclist or not, following these principles can help keep your financial wheels moving along the road to your goals.

Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P. and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
www.edwardjones.com/marques-young
Member SIPC

 

FINANCIAL FOCUS – Financial Gifts Can Brighten Anyone’s Mother’s Day

Join Connecting Atlanta on LinkedIn and Facebook.

Mother’s Day is fast approaching. This special holiday reminds us of the joy we receive from the powerful bond between mother and child. To help mark the occasion, you may want to consider making certain financial gifts, including the following:

For your mother:

  • IRA contribution – If your mother is still working, she is eligible to contribute to an IRA, but she might not always fully fund it – so you may want to help. You can’t contribute directly to your mother’s IRA, but you can write her a check for that purpose, though, of course, she can use the money however she likes. In 2019, the contribution limit for a traditional or Roth IRA is $6,000, or $7,000 for individuals 50 or older. (A Roth IRA does have income limits that can reduce the contribution amount or eliminate it altogether.)
  • Insurance premium – If your mother has life, disability or long-term care insurance, why not offer to pay some of the premiums this year? Long-term care premiums, in particular, can be quite costly, especially for older policyholders.
  • Introduction to a financial professional – If your mother doesn’t already work with a financial professional, consider introducing her to yours, or to someone else who is recommended by friends or relatives. A financial advisor can help your mother move toward her retirement goals – and, at some point, also can work with legal and tax professionals to assist your mother with her estate plans.

For your children:

  • 529 plan contribution – If your children are still of school age, you may want to contribute to a college savings vehicle. One popular choice is a 529 savings plan. When you invest in this plan, your earnings can grow tax-free, provided the money is used for qualified educational expenses. (Be aware, though, that withdrawals not used for qualified education expenses may be subject to federal and state taxes, as well as an additional 10% penalty.)

As the 529 plan owner, you have flexibility in using the money. For example, if you’ve designated one of your children as the 529 plan’s beneficiary, and that child decides not to pursue any higher education, you can switch the beneficiary designation to another child or to yourself.

You can choose the 529 plan offered by any state, but your contributions might be tax deductible if you invest in your own state’s plan. Tax issues for 529 plans can be complex, so, before investing, consult with your tax advisor.

  • Shares of stocks – Giving stock shares to children is a good way to help them learn some of the basics of investing. You can track the progress of their stocks with them, and even do some research together about why prices may be going up or down. By getting children involved early, you may help instill a lifelong interest in investing.
  • Charitable gifts – Many children are now concerned about various social issues. You can help encourage this involvement – and possibly an appreciation of the value of philanthropy – by making a gift to a charitable group whose work aligns with your child’s interests.

We don’t need to exchange presents on Mother’s Day to show our appreciation for one another, but certain financial gifts can help provide needed support – and even some valuable life lessons – for your loved ones.

Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P. and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
www.edwardjones.com/marques-young
Member SIPC

 

FINANCIAL FOCUS Try to Avoid “Titanic” Investment Mistakes

Join Connecting Atlanta on LinkedIn and Facebook.

It’s been 107 years this month since the tragedy of the Titanic. Of course, this disaster has fascinated the world ever since, leading to books, movies, musicals and, ultimately, a successful search for the big ship’s remains. On the positive side, commercial shipping lines learned a great deal from the Titanic, resulting in safer travel across the oceans. And as an investor, you, too, may be able to draw some important lessons from what happened on that cold April night more than a century ago.

So, to avoid some “titanic” investment mistakes, consider the following:

  • Create a financial strategy with a solid foundation. Although considered a technological marvel, the Titanic had some real structural, foundational flaws – such as compartments that weren’t fully watertight. To withstand the inevitable rough seas ahead, your investment strategy needs a strong foundation, based on your needs, goals, family situation, risk tolerance and time horizon.
  • Be receptive to advice. The Titanic’s crew had received plenty of Marconi wireless warnings from other ships about ice in the area. Yet they did not take precautions, such as slowing down. When you invest, you can benefit from advice from a financial professional – someone who can caution you when you’re making dangerous moves, such as pursuing inappropriate investments, which could ultimately damage your prospects for success.
  • Be prepared for anything. The Titanic had far fewer lifeboats than it needed, resulting in a tragic loss of life that could have been prevented. As an investor, you need to be prepared for events that could jeopardize your financial well-being, and that of your family. So, at a minimum, you need to maintain adequate life and disability insurance. And it’s also a good idea to build an emergency fund containing six to 12 months’ worth of living expenses, with the money kept in a liquid, low-risk account.
  • Don’t overreact to perceived threats. When the iceberg loomed directly ahead, the Titanic’s crew frantically tried to steer clear of it. While this move was understandable, it inadvertently hastened the ship’s demise, because it exposed a more vulnerable part of the hull to the huge ice mass. When you invest, you might also be tempted to overreact when facing perceived dangers – for example, if the financial markets plunge, you might think about selling your stocks. This is often a bad idea, especially if you’re taking a big loss on your sales. If your investments are still fundamentally solid, you might well be better off by staying patient and waiting for the markets to recover.
  • Give yourself time to reach your goals. Edward J. Smith, the Titanic’s captain, apparently wanted to break speed records on the Atlantic crossing – and this desire may have contributed to his somewhat reckless passage through fields of ice. As an investor, you could also run into problems if you rush toward a goal. To illustrate: If you wanted to retire at 65 with a certain amount of money, but you didn’t start saving and investing until you reached 55, you’d likely have to put a lot more away each year, and possibly invest a lot more aggressively, than if you had started investing when you were 30.

Put to work some of the Titanic’s lessons – they might help you improve your chances of smooth sailing toward all your important financial goals.

Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P. and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
www.edwardjones.com/marques-young
Member SIPC

 

FINANCIAL FOCUS – Time for Some Financial Spring Cleaning

Join Connecting Atlanta on LinkedIn and Facebook.

Spring is here – and for many of us, that means it’s time for some spring cleaning. This year, in addition to tidying up your home, why not try brightening your financial environment? Some of the same moves you make to clean your surroundings may apply to your finances.  Consider these suggestions:

  • Get rid of clutter. When you go through your closets, attic, basement or other areas, you may find many items you no longer need. You might be able to sell some of these things or find other ways of disposing of them. And as you review your portfolio, you might also encounter “clutter” in the form of investments that may be redundant to others you own. If so, you might consider selling these investments and using the proceeds to purchase new ones, which may help you broaden your portfolio.
  • Protect yourself from hazards. As you go about your spring cleaning, you may well encounter hazardous substances, such as cleaning agents, paints, batteries, pesticides and so on, which you don’t need anymore and which may pose potential health risks. You can reduce the possible danger from these materials by recycling or disposing of them in an environmentally safe way. Your overall financial situation has hazards, too, in the form of illness or injury preventing you from working, or, in your later years, the need for some type of long-term care, such as an extended stay in a nursing home. To protect yourself, you may need appropriate insurance, including disability and long-term care.
  • Find new uses for existing possessions. When you are sprucing up your home, you may rediscover uses for things you already have. Who knows – perhaps that treadmill that’s been gathering dust in your garage could actually be employed again as part of your rededicated exercise regimen. And you might be able to get more mileage out of some of your existing investments, too. Suppose, for instance, that some of your stocks are paying you dividends, which you take as cash. If you don’t really need this income to support your lifestyle, you might consider reinvesting the dividends so that you can own more shares of the dividend-paying stocks. Over the long run, increased share ownership is a key to helping build your portfolio.
  • Establish new habits. Spring cleaning doesn’t have to be just about physical activities – it can also involve a new set of habits on your part. For example, instead of placing your unread magazines in an ever-expanding pile, try to read and recycle them quickly. You can also develop some positive habits as an investor, such as “paying yourself first” by regularly putting some money in an investment account each month, even before paying all your bills. You can also avoid some bad habits, such as overreacting to market downturns by selling investments to “cut your losses,” even though those same investments may still have strong growth potential and may still be suitable for your needs.

Doing some spring cleaning can make you feel better about your living space today. And applying some of these techniques to your financial situation can help you gain a more positive outlook for tomorrow.

Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P. and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
www.edwardjones.com/marques-young
Member SIPC

 

FINANCIAL FOCUS – What Should You Do With an Inheritance?

Join Connecting Atlanta on LinkedIn and Facebook.

If you were to receive a sizable inheritance, what should you do with it? This money could help you achieve some of your important financial goals – so you’ll want to think carefully about your choices.

Of course, everyone’s needs are different, so there’s no one “right” way to handle a large lump sum. But here are a few suggestions that may be useful:

  • Pay off some debts. Depending on the size of your inheritance, you may want to consider paying off some, if not all, of your debts, such as car loans, personal loans and student loans. You might even consider paying off your mortgage, but you may not want to, as you might be able to get a better return on your money by investing it. Also, if all your money is tied up in a house, you’ll typically have less liquidity than you would get from your investments.
  • Contribute more to your retirement accounts. You may now be able to afford to contribute more to your 401(k) or other employer-sponsored retirement plan, as well as to your IRA. These accounts offer tax benefits plus an array of investment choices, so they are excellent ways to build resources for retirement.
  • Save for college. If you have children, or grandchildren, whom you would like to someday send to college, you might want to put some of your inheritance into a college savings vehicle, such as a 529 plan, which provides tax benefits and gives you great flexibility in distributing the money.
  • Build an emergency fund. If you haven’t already built an emergency fund containing six to 12 months’ worth of living expenses, you may be able to do so now, using part of your inheritance. Keep the money in a liquid, low-risk account, so that it’s readily available to pay for unexpected costs. Without such a fund, you might be forced to tap into your long-term investments.

Above all else, you may want to get some help. If you don’t already have one, a financial professional can recommend ways of using the money to help you meet your goals. For one thing, you could further diversify your investments, which is important, because diversification can help reduce the effects of market volatility on your portfolio. (Keep in mind, though, that diversification can’t prevent all losses or guarantee profits.)

And a financial professional can help you determine how much your plans could change due to the inheritance. To name just one possibility, you might be able to move up your retirement date. If so, you’d need to adjust many aspects of your financial strategy, such as when to take Social Security, how much to withdraw each year from your retirement accounts, and so on.

You’ll also need to consult with your tax advisor, because some inherited assets, such as an IRA, could have tax implications.

Your loved ones worked hard, and probably invested for many years, to leave a legacy for you. So, to honor their memory, do whatever you can to handle your inheritance wisely.

Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P. and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
www.edwardjones.com/marques-young
Member SIPC

 

FINANCIAL FOCUS – Who Can You Trust to Reduce Stress of Estate Planning?

Join Connecting Atlanta on LinkedIn and Facebook.

When it’s time to do your estate planning – and it’s actually never too soon to begin – you may find the process, at first, to be somewhat bewildering. You’ll have many questions: What sort of arrangements should I make? Who should get what? And when? How can you address these and other issues?

You’ll need to get some help. In drawing up your estate plan, you will need to work with an attorney. And for guidance on the investments that can help fund your estate planning arrangements, such as a living trust, you can draw on the help of a financial advisor. You also may want to connect with a trust company, which can help facilitate your estate plans and coordinate the activities of your legal and financial professionals.

Of course, you might think that only the very wealthy need a trust company. But that’s not really the case – people of many income levels have long used these companies. As long as you have a reasonable amount of financial assets, you likely can benefit from the various services provided by a trust organization.

And these services can range from administration of a variety of trusts (such as living trusts and charitable trusts) to asset-management services (bill-paying, check-writing, etc.) to safekeeping services (such as providing secure vaults for jewelry and collectibles).

In short, using a trust company can make things a lot easier when it’s time to plan and execute your estate. A trust company can help you in the following ways:

  • Avoiding family squabbles – It’s unfortunate, but true: Dividing the assets of an estate can cause ill will and turmoil among family members. But a trust company can act as a neutral third party, thus minimizing any feelings of unfairness.
  • Providing greater control – When you establish an arrangement such as a living trust, administered by the trust company, you can give yourself great control over how you want your assets distributed. For example, you can specify that a certain child receive portions of your estate spaced out over several years – a move that may appeal to you if you think this child might not be ready to handle large sums all at once.
  • Saving time and effort – As mentioned above, when you work with a trust company, you can let it do all the “legwork” of coordinating your plans with your financial professional, tax advisor and attorney. And these professionals are used to dealing with trust companies.
  • Gaining protection – Trust companies assume fiduciary responsibility for your financial well-being – which means that your best interests will always be considered in each service and transaction performed.

You can choose from among a variety of trust companies, large and small. Before choosing one, you may want to check out the services and fees of a few different firms. In any case, as you move toward that time of your life when estate planning becomes more essential, talk to your attorney, tax advisor and financial professional about whether using the services of a trust company might be right for you.

Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P. and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
www.edwardjones.com/marques-young
Member SIPC

 

FINANCIAL FOCUS – The Right Insurance Can Meet Both Short- and Long-term Needs

Join Connecting Atlanta on LinkedIn and Facebook.

If you’re going to achieve your important financial goals, you’ll need to build an appropriate investment portfolio. But that’s only part of the story – because you also need to protect what you have, what you earn and what you’d like to leave behind. That’s why it’s a good idea to become familiar with the various types of insurance and how they can address short- and long-term needs.

For starters, consider life insurance. You may have important long-term goals, such as leaving an inheritance for your family and providing resources for your favorite charities. You may be able to fulfill some of these through the death benefit on your policy.

You can also purchase life insurance to help fill the gap between the amounts you have saved and what your family would need if you died unexpectedly. Thus, insurance can pay for liabilities (such as a mortgage, car payments, student loans and other debts), education expenses (such as college for your children) and final expenses associated with your passing.

Next, consider disability insurance. If you were injured or became ill and couldn’t work for a while, the loss of income could be a big problem for your family members – in fact, it could disrupt their entire lifestyle. Even a short-term disability could prove worrisome, while a long-term disability could be catastrophic. Your employer might offer short-term disability insurance, and that could be enough – but do you really want to take that chance? To protect your income if you were out of work for an extended period, you might need to supplement your employer’s coverage with your own long-term disability policy. Long-term disability insurance, which generally kicks in after you’ve used up your short-term benefits, may pay you for a designated time period (perhaps two to five years) or until your reach a certain age, such as 65. Long-term disability insurance likely won’t replace your entire income, but it can go a long way toward helping you stay “above water” until you recover.

You may also want to think about long-term care insurance. Despite its name, a long-term care policy could meet either short- or long-term needs. On the short-term end, you might need the services of a home health care aide to assist you in your recovery from an injury such as a broken hip. On the other end of the long-term care scale, you might someday need an extensive stay in a nursing home, which can be extremely expensive and which isn’t typically covered by Medicare. But in either case, you might be able to benefit from a long-term care insurance policy, or possibly a long-term care rider attached to a life insurance policy. And the earlier you take action, the better, because long-term care insurance, in particular, generally becomes more expensive the older you get.

This list of insurance policies, and the needs they can help meet, is certainly not exhaustive, but it should give you an idea of just how important the right insurance coverage can be for you – at almost any stage of your life.

Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P. and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
www.edwardjones.com/marques-young
Member SIPC

 

FINANCIAL FOCUS – Market Outlook for 2019: Uncertainty is Certain

Join Connecting Atlanta on LinkedIn and Facebook.

To say the financial markets were a bit bumpy in 2018 may be an understatement.  The S&P 500 was down 6.2 percent for the year, the first time this key index fell since 2008, during the financial crisis. So what can you anticipate in 2019? And what investment moves should you make?

Let’s review the causes for last year’s market volatility. Generally speaking, uncertainty was a major culprit. Uncertainty about tariffs, uncertainty about the continued trade dispute with China, uncertainty about Brexit – they all combined to make the markets nervous. Furthermore, the Federal Reserve raised interest rates four times, and even though rates remain low by historical standards, the increases caused some concern, as higher borrowing costs can eventually crimp the growth prospects for businesses.

And now that we’re into 2019, these same uncertainties remain, so markets are likely to remain volatile. Although the Fed has indicated it may be more cautious with regard to new rate hikes, there are indications of slower growth ahead, particularly in China, the world’s second-largest economy. And after strong 2018 earnings growth, helped by the corporate tax cuts, corporate earnings may grow more slowly – and, as always, earnings are a key driver of stock prices.

Nonetheless, the U.S. economy is showing enough strength that a recession does not appear to be on the horizon, which is also likely to be the case globally – and that should be good news, because an extended “bear” market typically does need to be fueled by a recession. Ultimately, the projected continued growth of the U.S. economy and the possible resolution of some uncertainties could help markets rebound.

As investors, we cannot control the everyday ups and downs in the markets, but we can control our decisions, look for opportunities and keep a long-term perspective within our investment portfolios. Consider these actions for 2019:

  • Be prepared for volatility. As mentioned, many of the same factors that led to the market upheavals of 2018 are still with us, along with the impact of the partial government shutdown – so don’t be surprised to see continued volatility. The more you’re prepared for market turbulence, the less startled you’ll be when it arrives.
  • Stay diversified. At any given time, different financial assets may move in different directions: stocks up, bonds down, or vice versa. To help dilute risk and take advantage of different opportunities, you should maintain a broadly diversified portfolio containing stocks, international stocks, bonds, government securities and so on. You may need to rebalance your portfolio to maintain an appropriate proportion of each asset class, based on your risk tolerance and long-term goals. Keep in mind, though, that while diversification can reduce the effects of volatility on your portfolio, it can’t guarantee profits or protect against all losses.
  • Take a long-term perspective. It can be disconcerting to see several-hundred point drops in the stock market. But you can look past short-term events, especially if your most important financial target – a comfortable retirement – is still years or decades away. By keeping your focus on the long term, you can make investment decisions based on your objectives – not your emotions.

If 2019 continues to be volatile, you’ll need to stay prepared and make the right moves – so you can be confident that you did everything you could to keep moving toward your financial goals.

Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P. and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Marques Young
Edward Jones Investments
8001 Centerview Parkway, Suite 112
Cordova, TN 38018
Office: (901) 751-0634
www.edwardjones.com/marques-young
Member SIPC