The stock markets continue to churn along as if nothing is happening. As of this writing the S&P 500 is up 13.76% for 2023. Last year the S&P 500 lost -19.64%. To get back to pre-2022 account value you will need to make +41% this year, so +13.76 still falls short. If you consider a portfolio on a 2-year time line, there are many investors that are still down significantly.
“I am more concerned about the return of my money than the return on my money.” -Mark Twain
We preach the importance of income from dividends or interest. Investing for growth in or near retirement is absolutely dangerous. A few years ago, we met with ‘Mr. Wonderful’ (Kevin O’leary) from Shark Tank at an industry conference. I attached a quote he made in a Forbes interview below.
Consider the absolute importance of income in a portfolio particularly during market declines. Income can be spent or reinvested. According to Investopedia: “Once a company decides to start paying a specified amount of money to shareholders in the form of regular cash dividends, its stock usually trades with a little less price volatility in the market.” I have said before;
“Volatility is the Retirement Killer!”
Elon Musk said in an interview this year that; “It does seem like we’re headed into a recession here in 2023. The magnitude of that recession is debatable but I think it’s a light to moderate recession, potentially it’s on order of 2009.” Whether another massive market downturn happens in 2023, 2024 or later, this has serious implications for retirees. Call us to stress test8 your portfolio, today. Unless you believe in case of the markets, The road goes on forever and the party never ends.
Headlines to Cheer You Up9
⦁ Wall Street’s ‘Dr. Doom’ (Henry Kaufman) sees ‘Bermuda Triangle’ of risks for economy and warns of a 2008-like crisis. We avoided the debt a couple of times… but now the game is over, says Dr. Roubini. These risks include rising interest rates crushing company profitability, inflation cutting into American consumer spending, and distorted labor markets (alongside global geopolitical uncertainty as an unpleasant bonus).
⦁ The extreme bubble in stocks ‘will end in tears’ with the S&P 500 plunging 64%, a long-time bear (John Hussman) who called the 2000 and 2008 crashes has warned.
⦁ Michael Burry, the “Big Short” investor who became famous for correctly predicting the epic collapse of the housing market in 2008, has bet more than $1.6 billion on a Wall Street crash.10
⦁ ‘Already past the point of no return’: JPMorgan says the U.S. is probably headed for a recession as economic ‘engines are about to turn off.’11
⦁ Jamie Dimon (CEO of JP Morgan) also reiterated a warning on the economy that he’s been making for more than a year: While US consumers and businesses are in good shape now, there are major headwinds including quantitative tightening and geopolitical tensions. “Be prepared for higher rates and slower growth,” Dimon said. “The worst case is stagflation.”
⦁ U.S. economy headed toward growth slowdown; says Manulife’s Frances Donald She says every virtually every recession indicator is flashing red. Wells Fargo Chris Harvey Head of US Equities agrees. “This is not a great economic environment no matter how you slice it.” -CNBC
Don’t let your heart be wary, take time now to time review your portfolio’s risk and income. Ask for a Retirement Risk Review, Income Analysis, and Stress Test report. Call right away at 1-806-359-7766 to call our office.
Retire in a Recession dinner event
Come join us for dinner at X- Steakhouse for a riveting discussion on Recession and your Retirement.
We will discuss strategies aimed to help reduce and could help minimize inflationary and potential market recession risks to your nest egg and income.
• Tax Strategies that could add to your retirement income.
• Ways rising inflation will impact your retirement and how to adjust NOW.
• What safeguards can potentially help you weather stock market volatility.
• Understanding the risks of inflation on your portfolio.
• Understanding the income options in building an investment portfolio.
• How inflation & taxes affect your investments and what to do about it.
• Understanding how a Retirement Risk Review and Stress Test of your portfolio and retirement now, may be a smart move.
Sources Citations Bibliography:
1. Title of a song by Robert Earl King
2. 10/10/2023
3. The S&P 500 Index measures the value of the stocks of the 500 largest corporations by market capitalization listed on the New York Stock Exchange or Nasdaq. The intention of Standard & Poor’s is to have a price that provides a quick look at the stock market and economy. -Investopedia
4. Source: dqydj.com
5. Source: Forbes.com Why Shark Tank’s Kevin O’Leary Loves Dividends And Won’t Own Stocks That Don’t Pay (Nov 13, 2015)
6. See Why Are Dividend-Paying Stocks Less Volatile? -Investopedia
7. Please request from us, the free informational piece “The Real Cost of Volatility” for more context on this statement.
8. Stress Test -we use software that compares how your current portfolio would fare in a 2009 market decline senario. This software also measures your current dividend yield and sustainable income.
9. Ok we are being sarcastic.
10. Markets Insider March 21, 2023
11. Bloomberg News October 2, 2023
Supplemental Disclaimers:
This article is informational only and is not investment advice. This is not an offer to buy, hold, or sell investments like securities or insurance products.
Securities and Investment Advisory Services are offered though Toro Bravo Investment Advisors, LLC. Life Insurance and Annuities sold as an insurance broker are not a fiduciary relationship and are not offered by Toro Bravo Investment Advisors, LLC.
Securities or Insurance are not FDIC/SIPC insured and investments contain risk plus could be subject to loss.
Losses could be short term or permanent. Numbers and figures illustrated are hypothetical in nature and past performance is not a guarantee or indication of future results/performance.
We are not affiliated with the Social Security Administration (SSA), Internal Revenue Service (IRS), or any Governmental Agency.
Do not rely solely on the Legal, Tax, or Financial information presented for it may not be suitable for your individual situation.
Consult your legal, tax, and/or financial professional before acting on any strategy or recommendation (i.e. major changes or before initiating the purchase, hold, or sale of any investment or investment strategy). Every individual’s strategy can differ depending on current circumstances and goals.