FINANCIaL
FIELd NOTES
Three Timeless Lessons from Warren Buffett’s Annual Letter
Last month Warren Buffett published his annual letter, which as usual had timeless pieces of wisdom in it. Below are a few of my favorites.
#1 - Focus on dividends and earnings during market downturns. In 1994 they bought $1.4M of Coca-Cola. Last year that stock paid them dividends of over $700M…
Why “Full Retirement Age” Is Not a Magic Date
For years when you would open your Social Security estimate, there would be a big number in the top right corner – the amount per month you were estimated to get at “full retirement age” (FRA).
There was a tremendous focus on this specific age, which resulted in many people assuming that was the ideal date to claim benefits…
The New 529 to Roth IRA Strategy Under SECURE Act 2.0
I recently wrote about some of the key changes under the new SECURE Act 2.0, which includes a provision to transfer unused 529 funds to a Roth IRA.
Beginning in 2024, some owners of a 529 will be able to make limited transfers tax-free to the beneficiary’s Roth IRA. There are many rules around who is eligible and how much of the funds can be transferred…
Why I Finally Decided to Freeze My Credit
I was recently talking with an advisor who had his identity stolen. An attempt had been made to take out a $100,000 loan in his name from his very own bank! Because the bank had sent him numerous emails offering loans that he had sent to junk, the email notifications for this loan had been lost in a spam folder.
This experience pushed him to do a lot of research and he came to this conclusion that he shared with me. You should assume that your personal information is out there…
How Market Expectations Mislead Investors
Raising a 5-year-old has taught me a lot about setting expectations. A few nights ago, I gave him a 5-minute warning before bedtime. When I told him it was time, he jokingly stood up straight, saluted me, said “yes sir” and marched upstairs to brush his teeth. I’ve learned this “warning” technique after many failed attempts that involved me interrupting him in the middle of a game to send him to bed with no warning. When I do this, he is completely caught off guard and his reaction shows. The time he goes to bed is the same in either scenario. The only difference is whether his expectations were met.
Let me try to convince you that the same is true in the short-run for the stock market.
10-Year Market Outlook
Because of the variability of stock market returns in the short run, I steer clients away from short-term tactical changes to their portfolio and prefer to rely on the weighty evidence of history, along with long-term thematic trends in the market.
While no one has consistently and accurately predicted what the stock market is about to do, several well-respected firms provide long-term outlooks that have proven to be more accurate than short-term predictions.
Below are the 2023 10-year estimates…