IN THE KNOW
Monthly Newsletter
April 2022
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In this month's newsletter, we have timely articles on the bond market and we look at the FIRE movement more closely. We are excited to introduce our new support associate, Jessie Wussow. This month's employee spotlight highlights our employee's beloved furbabies. And as usual, we are sharing relevant investment articles and videos from Dimensional. Read on to learn about all of this and more!
We are a firm that understands that managing your assets is about more than money. It is about empowering your future. At ML&R Wealth Management, we focus on you.
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At ML&R Wealth Management, we counsel our clients on the importance of maintaining discipline when it comes to investing. While we fully understand that a normal reaction to market volatility can cause clients to become emotional and question their investment plan, we advise against making changes to an existing long-term plan based on recent market performance or news cycles. Until recently, most of the attention in the investment world was given to stocks, with bonds receiving far less. As bonds are generally less volatile than stocks, and have a lower expected rate of return, it makes sense that bonds have remained more in the background. That may be changing.
Since the Global Financial Crisis of 2008-09, interest rates have been kept historically low to spur more economic activity, and bonds have been performing accordingly. The Bloomberg U.S. Aggregate Bond Index has posted an annual average return of 2.17% over the last 10 years, lower than the longer-term average. Since March of 2009, the S&P 500 Index has had an annual average return of 17%, so most investors have not complained too much about the lackluster performance of bonds. But now that bond values have been declining steadily, with the Bloomberg U.S. Aggregate Bond Index returning -4.15% over the last 12 months, bonds have been receiving more attention. For more context, let’s take a closer look at the characteristics of bonds, stocks vs. bonds, why they have been declining in value, and the role they play in a balanced portfolio.
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The past few years of the pandemic have resulted in many people reevaluating their lives to determine what will bring them more purpose and meaning. Instead of living day to day, what will make us happy in the long term? Some have quit their jobs as part of what is being called The Great Resignation. Others have become interested in something called the FIRE movement. But what is the FIRE movement and should you consider it too?
The Financial Independence, Retire Early (FIRE) movement promotes extreme savings and investment to allow people to retire far earlier than traditional budgets and retirement plans would typically accommodate. The idea originated from a 1992 book “Your Money or Your Life” by Vicki Robin and Joe Dominguez. By saving up to 70% of their annual income, followers hope to be able to quit their jobs and live solely off of small withdrawals from their portfolio before reaching the traditional retirement age of 65.
The cool thing about FIRE is it is helping younger generations think about their retirement and what it looks like decades ahead of when they used to. It uses the same levers or inputs that financial planners factor into retirement planning – how much we save, how much we spend, and the compounding factor of time for investments to grow. It also helps younger generations choose a long-term goal and encourages changing behavior to get them to that goal, rather than living day to day and realizing in your 40’s or 50’s “hey, maybe I should think about how much I need for retirement.”
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Employee Spotlight ~ Let's Talk to the Team |
In this year's Employee Spotlight we will be asking fun questions to the entire team and sharing their answers in this section! |
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Introducing New Support Associate Jessie Wussow |
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Jessie Wussow | Support Associate
Birthday: November 15th
Tell us about your family: I married my husband, John, in 2021. He works in software development which means I understand about half the words he uses when he talks about work, but I promise I’m trying my best. We love going on runs together and taking care of our two very cute dogs.
Do you have pets? If so, what kind(s)/name(s)? We have two chihuahuas named Odin and Loki. Odin is highly demanding of cuddles. Loki is a total goofball who surprised us by being much younger than Austin Pets Alive told us he was when we adopted him.
What's your favorite indoor/outdoor activity? I love running! I have been a runner for about 10 years now which is not something I ever would have predicted, but now I love it.
What's your favorite book? Impossible to say definitively, but one of my favorites is No Country for Old Men by Cormac McCarthy
What's your favorite family tradition? Every single Christmas morning while I was growing up my dad would make French toast and bacon for breakfast. After he died, I have done my best to keep up the tradition every year. I’m not normally one to impose my traditions on other people, but if I end up at your house on Christmas morning, I will insist on making French toast for everyone.
What is your favorite part of working at ML&R? Everyone at ML&R encourages having a great work-life balance. I'm able to maintain my life outside of work and pursue what I love in addition to adding value to my team when I'm at work.
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Stock market slides over a few days or months may lead investors to anticipate a down year. But a broad US market index had positive returns in 17 of the past 20 calendar years, despite some notable dips in many of those years. Even in 2020, when there were sharp market declines associated with the coronavirus pandemic, US stocks ended the year with gains of 21%.
By Mia Huang, CFA, Senior Associate, Research
Inflation in the US has surged to the highest level in nearly 40 years, reaching 7.9% in February 2022.1,2 This, coupled with the US Federal Reserve’s decision to raise interest rates, has alarmed many investors.3 Some are turning to dividend-paying stocks, hoping to receive more income protection and higher returns.4 Will it work?
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Subscribe to our 401(k) Plan Services Quarterly Newsletter |
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Are you responsible for administering your company's 401(k) plan?
Would you like more insight and resources regarding the retirement plan services industry?
If so, please subscribe to our 401(k) Plan Services Quarterly Newsletter. You can check out the last few issues below.
See our latest Retirement Plan Services articles:
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What's Happening in Austin Next Month |
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About ML&R Wealth Management: |
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At ML&R Wealth Management, we take investing personally. Your ML&R Wealth Management advisor will work to develop a lasting relationship with you, keeping in touch to understand your changing goals and to provide an asset management strategy to help achieve them. Whenever you need sound financial advice, you have a direct line to a trusted advisor.
For over 25 years, we have served individuals, families, businesses, and nonprofits with wealth management services, custom retirement and 401(k) plans, and portfolio management.
We believe in accountability and transparency and operate as a fee-only advisor with fees calculated solely on assets under management.
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