The Classic Story of a Spender and a Saver

The untypical financial planning blog! Yes, my wife came up with the title as I get teased a bit for being a little frugal. However, we do try to find some humor in it. Hopefully some of these random thoughts will help you in your financial journey, So enjoy! - James Daniel, CFP®, CFA, CMT, EA Now for the DISCLAIMER: This blog is not intended as financial advice. We encourage you to consult with your personal advisor before acting on anything you read here.

How will this correction play out?

Written on March 2nd, 2018 by Jamesno shouts

Is the correction over, or is there more?

Written on February 13th, 2018 by Jamesno shouts

The long awaited market correction came with a vengeance the past two weeks, and now the question becomes is the coast all clear? Before we look at possible scenarios let’s discuss what finally triggered the rapid selloff. Lurking beneath the strong stock market rise in 2017 were slowly rising interest rates. With the strong economy, robust rising market and very low unemployment the recipe for inflation suddenly kicked in and rates began to break what many saw as a decade plus downtrend.  This sent a sudden shock through the market that maybe the Fed is behind the curve by keeping interest rates artificially low for to long.  Being late to correct this could mean inflation takes off and then the Fed must rapidly raise interest rates to counter that.  So the market had a momentary panic as this reality came to the surface and dropped over 10% in two weeks. Why did it all of a sudden appear in February?  Who knows, maybe the market participants suddenly became realists all at the same point.

So last week was pretty ugly in the markets, however an important “support” area held in the S&P 500, the 200 day moving average of prices.  What does that mean?  Market participants (traders, institutions, etc) all watch the price charts of the various indexes.  And certain levels are known as support levels where many traders will look to enter.  Hence when the S&P hit the 200 day Moving Average on Friday and held, we got a good bounce.  I personally put some client cash to work at this level as well.  Now the question becomes was that it?  Or is there more downside?  I can see two scenarios playing out in the coming one to two weeks.  The first and best case is that we saw the entire correction play out in two weeks and we now march back to all time highs.  See pic:


Could that scenario play out?  Of course and that is why you put some cash to work when the markets pull back to prior support levels.  HOWEVER, there is another scenario that could come into play if this bounce stalls out.  And this is the one you need to be prepared for as it could cause some major anxiety.  What I’m going to be watching for in the next few days / week will be the strength of this bounce.  If it stalls around the area highlighted below, there is a potential for one final move lower that is approximately the same point drop as we just experienced.  Potentially down to the 2450 level on the S&P.  That would clear the decks and put enough fear in the market that we could have a sustainable run through early Summer.  Is it possible?  Yes.  Is it probable?  The next few days will shed more light on that question.  Just know that anything can happen in the market.  Nothing is impossible.

Pre-Retirement Survival Guide

Written on February 10th, 2018 by Jamesno shouts

Everything you always wanted to know, in one handy reference guide:

Do you remember?

Written on January 22nd, 2018 by Jamesno shouts

Just a few short years ago Greece was about to implode and default on its debt, so their interest rates skyrocketed. Would you believe that now Greece’s 2 year treasury yield is lower the the US 2 year treasury yield (1.26% vs. 2.06%)? What do you think this is telling us?

2018 Tax reference / Key Financial Facts

Written on January 5th, 2018 by Jamesno shouts

Interested in the tax reform info for 2018? Or maybe SS/Medicare info? Or simply retirement plan limits? Here is the latest quick reference guide:

The Advisory Firm Tax Facts 2018

Video: Tax changes 2018 – How it affects you.

Written on December 18th, 2017 by Jamesno shouts

Trying to understand Medicare?

Written on November 13th, 2017 by Jamesno shouts

This document is one of the better ones I’ve found for Medicare basics.  If you know someone nearing age 65 pass it along:Medicare basics (1)

Tax reform bill summary

Written on November 3rd, 2017 by Jamesno shouts

From a quick scan it appears to me that congress is trying to get folks to take the standard deduction vs. itemizing on their taxes.  On the schedule A they are trying to eliminate deductions for Medical expenses, state taxes and capping property tax deductions at $10k.  Higher income folks and those that live in states with high property and state income taxes are not going to be happy.  Any new home purchases will also have a cap of $500k for mortgage interest deductions.

This website has a good summary:

social security benefits rise for 2018 but……….

Written on October 13th, 2017 by Jamesno shouts

You are getting a 2% bump in benefits in 2018, but it will probably be offset by higher medicare premiums: