Blog

Is it Bubble Time on Wall Street?

History is littered with episodes where investors irrationally believed that certain assets would continue to rise in price indefinitely, only to be sorely disappointed and suffer significant losses when the price later crashed. An early example of such an investment “bubble” occurred as far back as the early 1700s, when the stock of the South Sea Company, a British company with a government-approved monopoly, increased in value almost tenfold in a single year. Thousands of individual and institutional investors lost…

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Time Weighted Rate of Return vs. Internal Rate of Return

We recently reviewed the calculations available through Morningstar to report the performance for our clients’ portfolios. Historically, we have used a method called Time Weighted Rate of Return (“TWR”), but beginning January 1 of this year, we changed to Internal Rate of Return (“IRR”). While both are acceptable methods of calculating returns, we decided to make the change because we believe that the IRR approach provides a more appropriate way of reporting our clients’ personalized rates of return. The following…

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Silver & Gold Coins & Clock

Greed and Fear, Discipline and Flexibility

Not much has changed in the investment world so far this year. While the U.S. stock markets took a bit of a drop in January, they have climbed back in recent weeks. As of April 30, 2014, the S&P 500 U.S. Index is up 1.93% for the year while the Barclay’s Aggregate Bond Index is up 2.70%. The U.S. economy continues to show some signs of improvement, yet it continues to grow at an uncharacteristically slow rate at this point…

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flowers in cemetery

Transfer on Death Accounts

What is “Transfer on Death?” It is a designation that can be applied to an individual or joint account that enables you to specify your beneficiary(ies) in the event of your demise. Typically, when IRAs are set-up, you have already made those decisions since there is a place on the application form for you to designate your beneficiaries. However, applications for taxable accounts generally do not ask for beneficiary designation. You may ask, “Why is this important?” Designating an account…

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Market Commentary

By most accounts, 2013 was a good year for investors. Some of the uncertainty of the past year was lifted when politicians in Washington actually agreed to a budget, and the Federal Reserve took the first steps toward raising interest rates. 2013 also proved to be the best year for U.S. stocks since 1997. The Standard & Poor’s 500 index rose by 29.6%, and the Dow Jones Industrial Average ended the year more than 10,000 points higher than its 2009…

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Mapping the Future

Do any of these questions sound familiar? When can I afford to retire? What would a transition from full-time employment to part-time employment or consulting look like? Can I afford to reduce my hours to be a regular provider of care to my grandchildren? To my aging parent? Should I take Social Security at age 62, 65, 70, or full retirement age? When should my spouse take Social Security? How would my decisions for Social Security and other pension income…

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Books on table

Constantly Learning

One of Journey Tree’s core values is continuous improvement in everything we do to serve our clients. An invigorating way to do that is to get together with like-minded professionals at national conferences. Both Jonathan and Kath (see article in this issue) attended the Insider Forum in Dallas in September, where about 290 top financial planners and investment managers gathered to soak up the current best thinking on the economy, investments, financial planning and business management. Sessions included: * Managing…

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financial security

The Era of Uncertainty

In the past two weeks, we have seen sound economic and financial policy being held hostage to political motives through a government shut down and threat of not raising the debt ceiling. As a result the confidence of consumers, businesses, and our trading partners has been shaken, likely leading to reduced economic activity. Making matters worse, we will be revisiting the fight over the federal budget and debt limit again in just a few months. How do we navigate these…

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Light bulb in thought bubble

The Happiness Project

With its bright blue cover, Gretchen Rubin’s The Happiness Project caught my eye as I was looking for something to read on the flight back to Oregon after a summer business trip to North Carolina. Maybe there are a couple of practical insights I could benefit from I thought. Rubin said she realized that “Time is passing and I’m not focusing enough on the things that really matter.” So she decided to undertake a year-long adventure exploring what makes us…

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