5 Things Women Need To Know About Their Finances Many Women Can Plan To Live To At Least 92 Years Old On average, women living in the U.S. will live to about 81.1 years old compared to the male life expectancy of
Congress Holds The Power To Hurt Your Finances Regardless of your political persuasion, it is important to acknowledge that Congress is holding many things in the balance that could have a tremendous impact on your finances in the upcoming months. The budget deal is still
Millennials At Greatest Risk For Retirement Income Shortfalls When dreaming of retirement, most individuals have a “bucket list” full of dreams, and ideas that they greatly desire to accomplish before the end of their lives. Exiting the workforce seems to be a natural time to
Crowd Mentality And Investing Do you remember being a child and being warned by your parents to never follow the crowd? How, crowd mentality never led to anything good or worthwhile… Interestingly enough, crowd mentality also tends to have a very negative impact on investments.
How Safe Is Your Pension? A dangerous precedent has been set as Judge Steven, the federal judge in the Detroit Bankruptcy case ruled that Detroit is able to proceed with its bankruptcy, including major cuts to retiree pension plans. Billions of dollars owed to retirees,
5 Things Women Need To Know About Their Finances
Many Women Can Plan To Live To At Least 92 Years Old
On average, women living in the U.S. will live to about 81.1 years old compared to the male life expectancy of only 76.2 years. Even more extraordinary, if a woman makes it to age 50 without any significant health problems, she can also anticipate living to 92 years old! This is significant if you’re a woman who has always allowed your husband to manage the finances. Statistically you will need to have at least a general knowledge of how your finances work. Additionally, the longer you live, the greater need you will have for guaranteed, secure retirement income that will last for your lifespan.
Women Need To Be Careful That Their Investments Aren’t Too Conservative.
Compared to their male counterparts, women have a tendency to favor the more conservative investment options. While there is a time and a place depending on age and strategy that being conservative is a favorable trait, women who are too conservative in their investment choices can be seriously hurting their retirement income. Because of life expectancy, many women may need to rely on their retirement income for at least 30 years. The longer you can keep a portion of your portfolio in stocks, to increase your odds at greater gains, the better off you’ll be.
Women Should Pay Themselves First By Saving For Retirement Before Paying For Other Things:
Investing should be intentional and automatic, but to ensure your success you should be putting aside a percentage of your income every month before you distribute your income to other necessities. If you begin saving $5,000/year from the time you are 25 years old, you will have a nice nest egg of $1.3 million by the time you retire.
Take Time To Compare Retirement Savings Vehicles To Determine The Investment That’s Right For you
There are many different options of retirement savings vehicles out there that have varied benefits that appeal for different reasons. Take the time now, to speak to a Financial advisor about the different options available to you including IRAs and 401(k) plans, to determine which retirement savings plan works best for your individualized needs.
Take Advantage Of Employer Matching Programs To Your 401(k) Plan.
Not all employers are still choosing to match their employee’s 401(k) contributions. But if you’re fortunate enough to still work for a company that offers a matching incentive for retirement savings, it’s in your best interest to take full advantage of that match.
As a woman, knowing the probability of your living a ripe long life is both exciting and intimidating. You need to be sure that you’re financially savvy and that your investments and retirement income are well set up to see you through to the very end. For more information on whether or not you’re on the right track for retirement, speak to a Redhawk Wealth Advisor near you today.
Congress Holds The Power To Hurt Your Finances
Regardless of your political persuasion, it is important to acknowledge that Congress is holding many things in the balance that could have a tremendous impact on your finances in the upcoming months. The budget deal is still up in the air, there is a farm bill that needs to be decided upon, and there are many other significant measures that are to expire, unless congress acts. Following, is a list of some changes that could occur in 2014, that could have a negative impact on your finances and your ability to save and pay down on debt.
- 2014 Could Bring An Increase In Milk and Dairy Prices: One of the bills currently being decided upon by congress is a bill that gives dairy farmers federal subsidies. If they lose their subsidies, we could see the cost of a gallon of milk go up to $7/gallon or even higher. If this happens, people could all of a sudden be looking for non-dairy sources to obtain their calcium needs.
- You Could See An End To Your Unemployment Benefits: Another daunting bill that congress must vote upon is federal unemployment benefits that are set to expire at the end of the year. 1.3 million people will be cut off from unemployment at the end of 2013, and another 850,000 will be impacted within the first few months of 2014. The only way jobless benefits are to continue is if Congress decides they want to extend the federally funded Emergency Unemployment Compensation program for the 12th time since 2008. By extending the benefits, Congress is committing to another $26 billion in spending for just one year.
- Could The Government Be Facing Another Shutdown? If congress doesn’t decide to act fast, we could see another budget battle facing us in the near future, and potentially another government shutdown, which will lead to a credit downgrade. If this occurs, the impact it will have on stock market investments is fairly significant.
- Doctors Could Be Facing A Cut In Pay: Under new Medicare laws, doctors who treat Medicare patients could be seeing a 24% decrease in reimbursements. This uncertainty of a pay cut, could be putting the finances of many doctors on the edge as well as putting the accessibility of health care in jeopardy for Medicare patients.
- Federal Budget Cuts Could Be Coming: The sequester of 2013 was just the start of scheduled budget cuts. Without a deal being reached, another $20 billion could be shaved off of the federal budget, costing many government employees their jobs.
Stay Ahead Of Congress And Take Control Over Your Finances Today…
As you can see, there are many uncertainties facing the U.S. as we round the bend into 2014. Many of these decisions rest in the hands of Congress, whom up until this point has proven itself to be unable to reach any kind of decisions on financial issues. For more information on how these cuts might have an impact on your investments and finances personally, speak to a Redhawk Wealth Advisor near you today.
Millennials At Greatest Risk For Retirement Income Shortfalls
When dreaming of retirement, most individuals have a “bucket list” full of dreams, and ideas that they greatly desire to accomplish before the end of their lives. Exiting the workforce seems to be a natural time to accomplish many of these dreams because of the extra time and freedom suddenly available. Unfortunately, many Americans have fallen so short on their retirement savings that “Extras” for travel and hobbies are simply not going to be an option during retirement. Worse yet, some savers are so far off from meeting their mark, that basic necessities such as food, shelter and medical care may go unmet during retirement.
Survey Indicates Millennials Are The Worst Off For Retirement
While saving and spending issues seem to be an across the board dilemma for Americans, a recent survey suggests that millennials are the generation most at risk for not saving enough to meet their basic needs during retirement. According to the survey, baby boomers are going to be closest to hitting their retirement income needs at 81%. Generation X is behind and only expected to hit 71% of retirement needs, but the millennial generation has the biggest struggles ahead with only 62% of retirement needs projected to be met. The survey was based primarily on retirement saving habits, income level, home equity, pension benefits and personal debt load.
People Aren’t Saving Enough For Retirement
Whether you’re a Baby Boomer or A Millennial, the survey indicates that people are simply not saving enough to meet the ever increasing expenses that retirement poses. Most are saving 6% or less of their savings, rather than coming close to the 10-15% suggested by most financial planners. To further complicate the issue for Millennials, the pension plans and social security income that is so relied upon by today’s retirees, will be nearly nonexistent by the time millennials cross into retirement age.
It’s Not Over Till Its Over…
In spite of the discouraging news that Millennials are so far behind in their retirement planning, remember that time is on your side and it’s never too late to change your saving habits. Simple steps such as increasing your savings rates, reducing your spending, and by evaluating the performance and types of investments you invest in, can all play a significant role in boosting your retirement nest egg.
For more information on how to improve your finances in time for a successful retirement, speak to a Redhawk Wealth Advisor near you today.
Do you remember being a child and being warned by your parents to never follow the crowd? How, crowd mentality never led to anything good or worthwhile… Interestingly enough, crowd mentality also tends to have a very negative impact on investments. The term emotional contagion refers to the draw a person feels towards a specific investment behavior, due to the social pressure and influence of peers who are deeply invested themselves. The term contagion itself conjures up all kinds of images of infection, and transmission of germs and filth. Take steps today to avoid the impact of emotional contagion on your investments.
How Does The Crowd Mentality Impact Your Investment Decisions?
Picture a situation where you’ve sought advice from your financial planner, and have your hard earned assets tucked away into a nice portfolio with decent diversification and appropriate risk exposure given your age. When all of a sudden, a group of your friends whom you generally respect, start making all kinds of money on a foreign investment that is bringing in twice the profit that your more conservative portfolio is generating. At first you resist, knowing that slow and steady is much more secure than a flash in the pan investment that could blow up in your face at a moment’s notice. Eventually, as your friends start really raking in the dough, you cave in a moment of weakness and pull your money out of your more conservative investments and put it into the foreign investment just as it is reaching its peak. Soon after you make this decision, something happens and the prices crash on the new investment. Your original reservations about the investment proved true after all. Unfortunately, the damage has been done to your finances.
Avoid The Temptation Of Contagion Investing
In spite of the temptation so often posed by emotional situations in the markets, it is always wisest to check your emotions at the door and evaluate your investment options with a truly logical perspective. Downward pressure on an investment is typically the driving factor that causes investors to bail out and make emotionally charged investment decisions. No one likes to feel like they are losing money.
How To Avoid Following The Crowd Into An Investment Nightmare?
One of the most important thing to keep in mind when making investment decisions is that investment contrarians tend to fare much better than those who clamor to be a part of the masses on their climb to the top. Take it from the world’s wisest investors; Warren Buffet has always firmly stood by the buy low, sell high, principle. While it may not always feel “good” to experience temporary losses, school your emotions and make the most logical investment decisions to protect your assets. For more information and guidance on how to improve your investment strategies, speak to a Redhawk Wealth Advisor near you today.
A dangerous precedent has been set as Judge Steven, the federal judge in the Detroit Bankruptcy case ruled that Detroit is able to proceed with its bankruptcy, including major cuts to retiree pension plans. Billions of dollars owed to retirees, investors, employees and creditors will be “forgiven” in this ruling. For workers who have depended upon their pension plan for their retirement or future retirement, this news was a devastating blow.
Can You Count On Your Pension For Retirement?
Imagine being a devoted city worker, who has spent your life career working diligently for the city of Detroit who is now retired and bully dependent on your pension plan for retirement income. In many cases these civil workers are ineligible for social security. The ruling on Detroit’s bankruptcy threatens your very livelihood, your ability to make your mortgage payment, to keep your lights on and to put food on the table are at stake. One worker, Arthur Versace, 62, has been looking for menial work ever since he found out about the possibility of a Detroit bankruptcy, and up until this point has been unsuccessful. He and other retirees may have difficulty finding work because the majority of employers hesitate to hire anyone in their 60s. Versace is currently receiving $45,000/year in his pension plan, and any threat to that income will seriously undermine his ability to make ends meet.
Detroit Bankruptcy Sets A Dangerous Precedent
Up until this ruling, the Michigan constitution stood to protect those receiving public pensions as a “contractual obligations that cannot be diminished or impaired.” However, a federal judge’s ruling trumps a state law, meaning those who had taken refuge in the state’s protection are no longer going to receive the state’s protection. For those reliant on pension plans for retirement, the Detroit bankruptcy ruling has set a dangerous precedent that city, state, and even employer pension plans cannot be fully relied upon for retirement income. The biggest fear is, now that one city has successfully offloaded $9.5 of $11 billion in debt through bankruptcy, that other financially crippled cities will follow suit.
Do You Have A Plan B For Your Pension Plan?
Going forward, retirees need to closely examine the disappearing idea of a pension plan, and must come up with a “Plan B” strategy to bolster their retirement income. For many, this may include working longer, saving harder, and putting extra away into more reliable retirement vehicles. For more information on how to prepare for retirement and for help determining how much you will need to save for retirement excluding your pension plan, speak to a Redhawk Wealth Advisor near you today.
Looking Ahead To A Strong Market Performance This December
For over 100 years now, December has been a month of excellent stock market performance for the Dow. On average the Dow Jones has seen a 1.42% gain in December, with positive returns 73% of the time. Compared to other months that have had their ups and downs , December has been consistently positive most of the time, with investors able to turn a profit. This unusual trend has been termed the “Santa Claus Rally”, primarily due to the fact that the strongest days of the month fall right over Christmas, extending into New Years. This year, promises to be no exception to the stronger December numbers.
Why December Stock Prices Could Be a Great Christmas Present To Investors This Year…
The stocks have already experienced such a strong record-breaking high year, that this December is anticipated to continue the stronger trends. All three of the benchmark stocks have hit records on many occasions in 2013. Entering December, the numbers are still climbing and strong with the Dow up by 22.76%, the S&P 500 up 26.62% and the Nasdaq up 34.45%. Many analysts including JP Morgan’s chief equity status Tom Lee is projecting that the S&P 500 will see an increase of 1.3% in December. His feeling is that there are many things putting upward pressure on the markets right now including the Fed policies, the housing, auto and construction demand, and the recovering Eurozone.
Santa Claus Is Coming To Your Portfolio
For investors, this December holds tremendous potential. Anyone who is uncertain of the trajectory of the stock markets and whether or not the upward momentum can continue, need only to look at the 100 year December averages to determine the likely direction of the markets. Along with this, is the potential for greater earnings and profit if the markets are played just right going into December 2013. For more information on how to increase your profit potential this Christmas and how to be actively participating in the Santa Claus rally, speak to a Redhawk Wealth Advisord near you today.
Financial Mistakes In Retirement Can Be Devastating
No one enjoys making mistakes, especially when it comes to their money and their hard earned assets. However, when you’re young financial mistakes, while they seem devastating, give you ample time to recover and make up for the problem. When you’re retired and on a fixed income, the same type of mistake deemed as benign in your younger days, may be enough to upset the apple cart and destroy the financial stability of your retirement. Unfortunately, there are several retirement mistakes that are considered common and every effort should be made to avoid these mistakes.
- Failure to Plan Out Your Retirement Finances: Young people love to fly by the seat of their pants, however, in retirement having a financial plan laid out for the future of your finances is absolutely imperative. Failure to plan ahead is one of the most common reasons why retirees run into money problems at a time in life when they can do very little to correct the situation. A recent survey conducted by the Employee Benefits Research Institute, it was discovered that only 42% of retirees have a budget before they enter retirement. Without a budget you’re at risk of either overspending, or underspending depending on your personality. Overspending is obviously the most dangerous, but underspending can also cut into the quality of your retirement.
- Overspending Your Retirement Budget: Overspending in retirement is very easy to fall into, primarily due to all the extra time you have on your hands. With more time to take vacations, go shopping, and participate in activities, the cash can be flowing out a lot quicker than you realize. However, its important to keep in mind that the large retirement nest egg is not a lottery jack pot. In order for it to sustain you for the duration of your retirement, exercising caution is extremely important.
- Social Security Pitfalls: However tempting it may be, one of the biggest mistakes you can make financially in retirement, is to start drawing from Social Security too soon. The longer you can delay taking benefits, the larger the amount your payments will be. As many as half of Americans start withdrawing Social Security as soon as they hit the age of 62. They feel that they don’t know when they will die and they want to make sure they don’t miss out on payments. While this may be true for some, on average Americans are living much longer. The longer you can delay taking benefits, the larger your overall Social Security payments will be.
- Don’t Forget About Inflation When Looking At Conservative Investments: While caution is important in retirement, being too cautious with investments can actually do greater harm than good. Some retirees are so cautious that they take their money out of “riskier” high yield investments and put it into savings accounts, and CD’s where the interest rates can’t keep up with inflation. By doing this, they actually are losing money as inflation erodes their nest egg. A good balance between risk and caution is imperative when handling your retirement portfolio.
- Wait To Retire: Too many Americans are so anxious to exit the work force that they retire too early and before they have sufficient money saved to last for retirement. It’s important that you crunch numbers with a financial advisor, get an accurate assessment of financial needs, life expectancy and whether or not you have the financial means to retire, before you decide to leave your career behind. According to the statistics, for every year you work between ages 62-70 you increase your likelihood of retirement success by 10%.
- Not Planning Ahead For Health Expenses: When you’re young, it’s easy to forget that as you age your health problems will also increase. With the rising cost of health care, it is very important that retirees create a plan for health care issues during retirement. A sudden and devastating health problem can be the number one reason retirees run into financial problems. By planning ahead for these issues, you can often avoid the angst that’s experienced with medical bills.
Retirement has the amazing potential to be a wonderful experience with many joys. However, the less secure your finances are, the more difficult it is to recover from financial mistakes. For more information about retiring financially secure, and to avoid falling into many financial pitfalls, speak to a Redhawk Wealth Advisor near you today.
Personality dictates many of the decisions we make day to day. From the type of career we may pursue, to the successes we enjoy in life. Differences in personality can often set some up for financial success while keeping others at the bottom of the heap so to speak. Those who are naturally more outgoing and driven, may not be at all fearful of taking on a sales and marketing position, or driving change in their company. Those who are more reserved, on the other hand, may be content working at a steady job, that is not based on commission and performance. The same personality traits that may drive us in other aspects of life, also impact investing styles and ultimately the success of investments.
How Does My Personality Impact My Investments?
To boil it down, there are two very distinct polarized personality traits that have a large impact on investment decisions. They are the doers and the thinkers. Doers are exactly that, they like to think quickly and act on their first impulse, whether or not this is the best decision. Most doers are workaholics, and only feel “alive” when they are busy doing. This personality trait can be great when at an impasse and a decision must be made quickly, but it can also lead to making big investment mistakes that can be difficult to recover from. On the opposite side of the spectrum, thinkers are much more cautious and tend to be very deliberate in their decisions. They like to think about all the angles and potential pitfalls their decision may present. In the world of investments, thinkers often get a lot of quality, but not a lot of quantity.
In reality, if someone is completely polarized as either a doer or a thinker, he or she is opening up the door to an investment pitfall. If you react too quickly, you can easily find yourself trapped in an undesirable investment. If, however, you react too slowly, the better investments will pass you by before you’ve had adequate time to ponder their safety and effectiveness.
Balance Your Personality Traits For Successful Investing
Any kind of extreme can be dangerous in life, and especially in the world of trading and investing, balance is key. To be a successful investor, making the shift into the middle of the two extremes is a much more successful position to be in. You need to develop the ability to pull the trigger when it’s in your favor, and also exercise caution if an investment has some red flags. Sometimes this means getting out of your comfort zone and facing some mistakes along the way. But ultimately attaining balance in your investment approach is paramount to success.
For more information on how to achieve investment success, and on how to hone your personality to shave off the rough edges that could hinder your investment potential, yet allow your strengths to shine, speak to a Redhawk Wealth Advisor near you today.
MINT Countries May Be A Good Choice For Your Investment Portfolio
For investors who have shown interest in adding emerging markets to their investment portfolio, the next greatest emerging market opportunity, may actually fall just south of the border the border. Mexico, and other countries belonging to MINT show tremendous potential in the upcoming years. MINT consists of: Mexico, Indonesia, Nigeria and Turkey. These four countries are expected to outperform the rest of the developed world in upcoming years. Since 2000, while many other economies have been struggling, these four countries have actually managed to double their economies and have quickly outpaced other developing nations that have garnered investor interest in previous years.
Mexican Auto Industry Gives Mexico A Boost As A Developing Nation
One of the driving factors in Mexico’s success as a developing nation is its booming auto industry. Since 2003, Mexico’s auto production has nearly doubled from 1.6 million units to 3 million units in 2013. Mexico’s biggest consumer is the U.S., with 80% of Mexico’s manufacturing exports coming into our country. This year, imported goods from Mexico have totaled around $277.7 billion, making Mexico second only to Canada as a significant provider of U.S. goods.
Transportation Of Mexican Goods An Investment Opportunity
Interestingly enough, the opportunity to get involved in this rapidly developing nation, extends beyond Mexico and its auto industry. As the importation of goods continues to increase, the transportation of these goods also offers serious investment potential. Currently, one small company, the Kansas City Southern railroad, is making its mark as its single track heads due south from Kansas City into the oil fields of Texas and to Veracruz and Lazaro Cardenas in Mexico. This little railroad has such an important location, that its ability to transport goods has become paramount in the Mexican auto industry. It’s location has allowed it to capture the business of both the American Southwest oil boom, and the ever increasing need for Mexican cars.
Why Invest In The KCS Railroad To Get In On Mexico’s Auto Boom?
As was already mentioned, this little railroad’s ability to access and service the auto industry in Mexico and the oil fields in Texas, has made it a gold mine in and of itself. Currently, the KCS stock is going for $125/share, which is up 50% since the beginning of 2013. Every year since 2009, revenue from this company has continued to rise. It’s forward P/E ratio is 24, compared to other railroads that are sitting at around 14.
As you look forward into 2014 and are trying to determine the best future investment opportunities, don’t let this little goldmine elude you. For more information on how to profit from the booming MINT companies and specifically the auto imports coming into the U.S. from Mexico, speak to a Redhawk Wealth Advisor near you today.
Time To Examine Cyclical Stocks
As investors have been relishing in significant stock market gains for the last year, moving forward, it’s time to examine what the future holds for the economy and for markets. Many have remained cautious that market highs cannot be sustained indefinitely. However, the real growth being experienced in the U.S economy and the majority of economies around the world, may signal that it s time for investors to consider more economically sensitive cyclical stocks. As the U.S. has moved beyond “licking its wounds” from the downturn in 2008, real growth has taken over the doldrums of the recession. Traditionally, as this happens, a shift occurs to cyclical stocks, whose performance is married to the performance of the economy.
Why Cyclical Stocks?
Cyclical stocks, as was already mentioned, are tied to the performance of the economy. They include materials used for manufacturing, tech, and industry, and typically only take off when the wheels of the economy are running in full tilt. Analysts at S&P Capital IQ, are in agreement that the current economy will be bullish for cyclical stocks, driving their prices, which are currently fairly low, to highs in 2014. Driving this bullish outlook for cyclical is the ever improving housing market, the hydraulic boom and corporate tech spending. In Europe, the rocky economic situation of several years go has improved, with many countries moving out of recession into sustained growth. Japan, also is enjoying a period of growth.
Cyclicals To Take Off In 2014
According to analysts, it is predicted that cyclical stocks will grow by 10.6% in 2014. That is almost double the 5.6% growth they enjoyed in 2013. Currently the P/E ratio of the cyclials is at 14.9. They are considered reasonably priced, which makes them poised for growth.
Playing The Cyclical Shift
Due to the economic shift from growth into expansion, it may be time to consider adding cyclical stocks to your investment portfolio. For more information about which companies are expected to perform moving forward into 2014, speak to a Redhawk Wealth Advisor near you today.