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Aligning Your Investments with Your Life Goals Helps Reduce Risk
Here at New Market Wealth Management, we aim to manage investment risk and protect your assets with a process that reflects your individual circumstances. The graphic below illustrates our approach.
First we address the portion of your investable portfolio that requires protection (the base of the pyramid above). Think of this as the Alamo. These investments are designed to be fully liquid and central to your financial security ---- immediately available should a crisis hit. Second, we will invest those assets that reflect your core needs; spending for your lifestyle, education, support for others, etc. Then finally, we invest the remainder of your portfolio to meet your aspirational goals. This portion will focus on growing your portfolio, thereby enabling you and your family to do the things in the future that you wish to achieve. This approach provides a useful framework for determining your asset allocation and, b
y separating the components of your life, we can divide the risks associated with market downturns.
The first step in our process? Meet with a Certified Financial Planner in our office to explore your spending needs and aspirational goals, and then we'll design a comprehensive investment plan to match.
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With last week's relative lack of earnings reports, political controversy and economic news, stocks recorded another week of gains. The S&P 500 and Nasdaq composite both reached new highs with g
rowth-oriented technology and consumer discretionary stocks leading the way.
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> GDP Revision: You may recall the advance estimate for first quarter GDP was a paltry 0.7%. Last Friday, it received a
much needed upgrade, and is now at a 1.2% rate of annualized growth (the final estimate will be released on June 29). Though still slow, it is an improvement. The increase was a function of stronger consumer spending and services, and less contraction in durable goods.
> Amazon Hits $1,000: Amazon's stock price crossed the $1,000 mark for the first time in early trading on Tuesday. Amazon shares have surged 40% over the past year and more than 50,000% over the last 20 years. The stunning chart can bee seen below.
But how significant is the price level? Basically, it's just a psychological milestone ---- not a reflection of value. To understand investment opportunity most professional investors don't look at just the stock price, they compare the price to the company's projected earnings. And right now Amazon is expensive! It's trading at about 90 times earnings estimates for next year; much higher than the overall market and their tech peers of Apple, Alphabet, Microsoft and Facebook.
> FOMC Minutes: Minutes from the latest Federal Open Market Committee meeting were released last week and they were bullish. The Fed revealed a possible approach to unwind its massive balance sheet: introducing a gradual increase of caps to limit the reinvestment of maturing securities. In addition, the Fed's willingness to discuss the issue shows that the central bank has pretty good confidence in the economic outlook, having attributed first quarter weakness to transitory factors.
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What better way to end your work week than by taking advantage of
National Donut
Day this Friday.
Let's first acknowledge there are literally thousands of fake food "holidays," most of which have been created by savvy marketers trying to call attention to their brand.
But, as far as made-up food holidays go, National Donut Day is about as legit as it gets.
Here's the history behind the day. Evangeline Booth, daughter of the Salvation Army founder William Booth, spearheaded the involvement of the Salvation Army "lassies" as volunteers on the battlefields of France in 1917. They served food, including donuts, to thousands of soldiers on the front lines during WWI, often improvising with limited resources ---- using
helmets
as deep fryers, spent artillery shells as dough cutters and wine bottles as rolling pins. In 1938, National Donut Day was established by the Salvation Army to honor the work of those volunteers. To
day, many Salvation Army chapters around the country celebrate the day by feeding those in need and handing out free donuts made using the original WWI recipe. Lucky for us, those savvy marketers at Krispy Kreme and Dunkin' Donuts (and others) have hopped on board offering freebies on the first Friday of June each year.
Mmmmmmmmmm. Donuts.
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New Market Wealth Management offers modern investment solutions backed by extensive research and experience serving the needs of wealthy families. Through our strategic partnership with
Cliffwater LLC
, we provide institutional-quality research, investment due diligence and asset allocation tools. We believe this level of experience and unique access to in-depth, sophisticated research are essential for success in today's complex world markets.
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