Market Update. What Happened to the Market

Dear clients and friends,

The last few weeks have been crazy to say the least.  Captain obvious here.  I wanted to take a moment and share some thoughts with you. It has been a challenging time to decipher what is happening in the market and in a new world of “social distancing”, schools closing out of precaution, travel restrictions and concerns on the scale of spread and potential financial impact of the coronavirus.

What Happened to the Market

The markets heading into 2020 had been on an overall 11 year bull run and was starting to look for a sell-off correction to slow things down and pause a highly priced market.  Coronavirus was the “trigger” the market was looking for to start a sell off and pull back prices.

 Monday, March 9th the S&P 500 finished the day down 7.7%.  In my opinion, this was likely the “capitulation sell off” that was based somewhat on market fundamentals.  However, since the 9th, the market has been mostly if not entirely based on fear and any focus on fundamentals has been absent.  Fear is a scary emotion because it can take over logic and cause the most educated of us to panic.  There is much commentary out there from the health community, NIH and CDC about the prevention actions taking place.  The U.S. is seeking to be proactive, get ahead of community virus spread and flatten out the rate curve of infection.  I will let the medical community give perspective on that.  It is a very fluid situation.

 The same trigger of the initial sell off, the coronavirus, is now also the reason for uncertainty we see driving extreme volatility of huge swings in the stock market.  What a ride.  These next few weeks will likely have more volatility.

Let’s review the last weeks roller coaster: Monday, March 9th -7.7%, Tuesday +4.89%, Wednesday -5.8%, Thursday -9.99% and Friday +9.36%... ending the week -10.36%.

Some truths about the stock market

• We have seen extreme volatility.

• Fundamentals have not been involved in the last week or so. It is largely pure panic; selling all stocks and even bonds without regard.

• Volatility will probably remain high for period.  Since 2008, when we have seen increased volatility, the market has moved fast on the downside but also often quick on the rebound, upside.

• This decline is different from the 2008 recession, the most recent dramatic sell off.  In 2008, the financial system, the banking backbone of the global economy was on the brink of collapse from overleverage and bad loans.  Today, the financial system is in a much stronger position and is healthy.

• Another truth about the market is that it hates uncertainty.

It is likely that the economy will slow during this period and companies’ sales, earnings will be down.  This is known.  What is unknown is how long this slower period will last.  One good thing is that it is known, as to why U.S. companies’ revenue will be down.  It is explainable and not because all these businesses are poorly run or have bad goods or services.  This is a slowdown because business has not been conducted as usual for a period- more employees working remotely, travel has been stopped to see customers/close deals and some companies are waiting logistically for parts from a manufacturing partner in China or another part of the world.

• Once these slowdowns are behind, some of the market will likely bounce back quickly.  The U.S. economy, especially the business segment will adapt quickly and adjust to be productive and profitable.

How to think about this

• Stay calm.  You don’t need 6 months of toilet paper or think you should sell your investments and move to cash

• As your advisors, we are being proactive and available to discuss your concerns.

• Trust the allocation of your investments.  On a roller coaster, would you try to exit or jump off at any point in the ride?

• Trust your financial plan.  Your plan helps lay out what each account you have is for and has a timeline for specific goals and upcoming expenses.

• Consider a rebalance of your accounts.  As markets move, and with stocks declining lately, the allocation of a portfolio can get out of line with your appropriate risk target.  A rebalance can allow an investor to purchase stock shares at a discounted price when stock markets have declined.

• Consider investing cash with a long term timeframe.

• Evaluate if a refinance of your mortgage may be viable.  30 yr and 15 yr rates have come down to record low with the US 10 year bond being under 1%.  Contact a mortgage broker to shop around for your specific situation.**

If you have questions, please ask us.  Please know we care and are being proactive and involved as much as we can.

We are available, especially in times like this.

Luke and Kevin

**Raymond James Financial Services and your Raymond James Financial Advisors do not solicit or offer residential mortgage products and are unable to accept any residential mortgage loan applications or to offer negotiate terms of any such loan.  You will be referred to a qualified Raymond James Bank employee for your residential mortgage lending needs.

 This is not a replacement for the official customer account statements or trade confirmations from Raymond James or other custodians.  Activity details including time and price will be included in the official statements and confirmations.

 The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.  Any opinions are those of Foley & Fields Wealth Strategies and not necessarily those of Raymond James.  Expressions of opinion are as of this date and are subject to change without notice.  There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.  Investing involves risk and you may incur a profit or loss regardless of strategy selected.  Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance.  Individual investor’s results will vary.  Past performance does not guarantee future results.  Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.  Rebalancing a non-retirement account could be a taxable event that may increase your tax liability.  The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.

·       

Vision Problems

Poor vision leads to poor results -- simple as that.  After many years, I finally had LASIK surgery to correct my eyesight.  My bad vision was impacting my ability to see what was coming down the road when driving, who was across the room and when coaching, what exactly happened on that last play.  Often, I came home frowning with horrible eye strain from work. This led my family to think I was grumpy or upset. My poor vision was impacting many areas of my life.

Now for the cliché...

I’m seeing 20/20 in 2020 - Had to say that one!

My new vision has given me a better perspective and much better results.  When driving, I can see what is coming far down the road.  Faces across the room are clearer.  And at a sports event, I can see why the referee made that bad call (of course).  The importance of good eye vision is similar to having good life vision.

Questions to ask ourselves

What is your vision like - is it clear, distracted or blurry?  What perspective are you seeing life through?   Where do you want to be financially, physically and spiritually in 1 year, 5 years or remembered for upon your passing?
What is on your heart to accomplish?  What is your faith leading you to pursue?

Discussing these questions and exploring the possibilities are the greatest conversations I get to have with clients.  Have you discussed these lately?

Foley & Foley Wealth Strategies

A Uniquely Family Run Business for 35 years

In 1981, Foley and Foley was established when insurance specialist Mark Foley and his investment savvy son, Kevin Foley joined forces to serve clients.

This month, the firm celebrates 35 years serving clients!

Today, Foley & Foley Wealth Strategies is thriving thanks to the continued dedication and success of Kevin Foley and his family of partners, Luke Fields and John Foley.  Kevin shares that “we’ve worked to maintain the exceptional standards established early in the company.”  Click here to read more about ‘Our Story’.

The firm credits success to their clients trust and satisfaction.  By building a financial plan unique to each client, Foley & Foley Wealth Strategies conveys that real wealth comes from planning and living your best life, and being able to pass on the blessings.

Since 1981, Kevin Foley, ChFC®, CLU®, has specialized in helping clients accumulate, manage and preserve wealth and been recognized as an outstanding financial advisor, achieving membership in the Raymond James Leaders Council. 

Luke Fields is a CERTIFIED FINANCIAL PLANNER™ Professional with a thorough understanding of the details required when constructing strategies for clients.  John Foley, RJFS Investment Consultant, specializes in consulting with clients to determine which investments will help them accomplish their unique goals.

In recent years, Foley & Foley Wealth Strategies has modernized our firm processes, created a new logo/website www.foleywealthstrategies.com, enhanced the investment selection process to be discretion managed in-house and implemented the most current financial planning software adding significantly to their investment and financial planning strategies. These changes convey a readiness, vibrancy and current understanding of today’s challenging markets. 

Foley & Foley Wealth Strategies THANKS YOU!    We pledge to you our continued best service – you deserve it!

Kevin Foley ChFC®, CLU®, Founding Partner
Luke Fields CFP®, Firm Partner
John Foley, Firm Partner, Investment Consultant, RJFS

Calling All Control Freaks Adjust Your Focus

What Can You Really Control?

“I will invest in stock XYZ when it gets down to $5 and then sell when it reaches $40 all the while if I see the market is going to go down, I will sell ahead of it.”  This is a paraphrased quote I recently heard… Good luck with that plan!!  I wish I had that person’s “crystal ball”.  Many of us though, have attempted similar plans about something in our lives that we think we can control.  Can you really control the stock market, traffic, an upcoming election, other people…?  Nope, you just can’t.  And if you try, you will be a frustrated mess.  As a sometimes “control freak”, this can freak me out! 

Change your Focus

As tough as it is to admit, I can sometimes be a control freak.  However, I am learning to let go.  What is needed I have found, is a change of focus.  The little details we plan out step by step sound great but the reality is those details will need to regularly change with the many variables surrounding every relationship, a deadline at work and even the stock market’s impact on your financial plan.  If you can take a step back, “zoom out” so to speak, you will see the big picture.  You will then see what really matters to you, your family, profession and the legacy you want to imprint on others.  

What Really Matters

Control tendencies are often birthed from emotional fears.  If you can release these fears, you will find freedom.  Then you are able to focus on what really matters…. the things you value and which really are your goals.  How you spend your time, what you think about, who you spend time with all become a lot easier when you know what really matters, the big picture- where you should focus your energy, time and money on.  This is real financial planning.

Allow me the honor to Build for you or Revise your “current” Financial Plan.

Let’s Focus Together on What Really Matters,

Luke Fields, CFP®

How to Build Credit...When You Have None.

So you want to build credit but have no credit history?  You have no credit history and can’t get a credit card.  How do you build credit? I have heard this question several times recently, so I wanted to provide some advice.  Pass this on to your kids, grandkids and friends if you have already begun your own credit journey.

Why You Want Good Credit

Think of credit as the trustworthiness that a lender has in you to repay them.  Would you loan money to someone you didn’t trust?  Probably not.  FICO (Fair Isaac Company) started in 1956 to provide a numeric measure of a person’s credit worthiness.  If you want to someday buy a car, a house to call your own or get a loan to start an entrepreneurial business, you likely will need money.  If you have a history of responsibly paying back your credit on time and in full, it is much more likely you can get the money you need.  If your FICO score is high, considered good or excellent (720+), you will enjoy the lowest interest rates and terms for your loan.

The Credit Rules to Live By

Only use credit cards or get loans for items that:

1)    You actually Need.  “Need” meaning items that you would buy with cash anyways; gas, groceries, utility bills and if still in school/grad, then tuition, fees, etc.

2)   You have the cash in the bank to pay for what is charged on the credit card or the loan payments you owe.  My kids know this one… Cards can be convenient but you only can buy want you can afford.  You owe what you “swipe”.

3)   You can pay in full, 100%, on time and every month.  This is the single most important factor in building credit and a high FICO score.  It will also save you from paying high interest rate charges and fees.

Ways You Can Start Building Credit

•  Open your first starter Credit Card.  Visa, American Express, etc. Many of these companies offer “student” credit cards if you are still in school or grad school.

•  Get a Gas card.  Shell, Conoco, Exxon, etc.  Remember, this is only for what you need and would buy anyways- gas to get to work or school… not beef jerky and gum inside the “quickie-mart”.

• Become an “Authorized User” on someone else’s credit card.  A Family member may allow you to do this, but hopefully with a watchful eye.  This will help you build credit but beware to them; you are not legally obligated to pay for charges.

• Be a Co-signer on a loan.  Need a car?  Well those (affordable) car payments, paid in full and on time can build credit.  Again, the main signer for the loan is legally obligated.

• Get Credit for the Rent you already Pay.  Check out rent reporting services such as Rental Kharma and RentTrack.  This will usually help build credit but not all credit scores take this into account.

What’s the best card?

It really depends. Check out WalletHub to review their top picks.

 A few tips though.  Typically it is best to avoid a card with an annual fee, however a low annual fee may be okay if you can pair building your credit with receiving reward points that you will benefit from, such as cash back, flexible point systems or airline mileage cards if you plan to travel often.   If you are unable to obtain one of these traditional cards, you may need to start with a “secured card”, where you place a security deposit on the card.

Another tip: Check your Credit Report and Scores regularly.  You are entitled to one free report every 12 months from each of the three credit bureaus, Experian, TransUnion and Equifax.  So that is 3 free each year.  Go to AnnualCreditReport.com to check your credit score.

Further questions about how to build credit or credit in general?  Explore Experian’s site (one of credit agencies) or shoot me an email anytime. Luke.fields@raymondjames.com

To Wise Credit Use,

Luke Fields, CFP®

Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James, and are subject to change without notice. Information provided is general in nature. Past performance is not indicative of future results. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Imprinting

Whether you realize it or not, you are imprinting.  What is imprinting?

I was speaking with our puppy’s dog trainer a while back and he said this: “Imprinting is really impactful.  It is the memory, trust and familiarity your dog will have of you… forever.”  At the surface, it made sense in terms of wanting our new family member, “Ollie” to listen to us, trust us, know our voices, remember our scent and be okay with us touching his paws (a big benefit for future nail-clipping :). 

In my last writing, I talked about Legacy and the importance of realizing that its impact is happening now, today… not later, “down the road” when you die.  I instantly made the connection.  There is much more to how a Legacy gets created.  It is not just “leaving” a legacy, it is “imprinting” a legacy.

It is Not Just for Dogs

Every day we imprint ourselves on those around us; a spouse, children, friends and co-workers.  Wow.   Memories of me are being imprinted on those around me, possibly forever.  Have you ever heard the often used expression “more is caught than taught”?  Imprinting can be verbal but often it is what we don’t say; our actions both good and not so good.  I know my kids learn a lot by watching how I handle money, talk with others and how I spend my time.  In what I say and do, I want to teach them not only good financial habits but a deep love for God, respect of others and foster a heart of service.

Be Intentional

Imprinting your Legacy goes beyond the important financial habits and decisions we all face.  It includes all of life’s possible behaviors and emotions.   So as your legacy is being created now, your imprinting on others needs to be intentional.  Develop a purposeful plan to imprint and leave the legacy you desire.  This is part of the goal discussion when we create a financial life plan for clients.

Imprinting a Legacy,

Luke Fields, CFP®

Any opinions are those of Luke Fields and not necessarily those of Raymond James. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and CFP® in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

The Problem with Legacy

I am annoyed.  Often I hear people discuss their legacy as the money and assets they will someday pass on.  Yes, that is a legacy as defined.  But is that all a legacy is?

Okay, bear with me…I have to pull out the dictionary on this one.  Merriam-Webster states that a Legacy “is a gift by will especially of money or other personal property”.   So at “first blush” people are using it correctly but isn’t there much more than money to a legacy?  In my opinion, heck yes!  Absolutely.

I had a recent estate planning discussion with a couple.   As we chatted and began to draw up some ideas, repeatedly their comments went back to how much life changing money would be left to their children.  Along with some other gifts to church, mission work and charities, the plan was typical and completely reasonable.  What struck me was that the focus was entirely on the money as their legacy.  This is not the couples fault but the error of the larger “finance community” and our culture for this interpretation.  I am annoyed that we often think legacy only begins at death when the money is passed on.

There is much more to Legacy than money

If we go back to the dictionary, the other definition of legacy is;

While money can certainly help our children and others, I think we often miss the big picture, which entails a much more important discussion.  This other kind of legacy is a healthy, soul searching discussion based on what you value and how you really want to be remembered.  Personally, I would like to be remembered for much more than the father, uncle or friend that left money behind.  Again I will admit, money is helpful and a blessing…but it is temporary, can be lost and sometimes not really helpful to others in the end.  However, the memories, wisdom and time with my wife, kids, friends and clients are the deep and lasting legacy I hope will encourage for years beyond my life.  I want to be a good steward of my legacy now.  Do you?  

And that is the interesting part.

Most legacies are overly focused on “after I am gone”….  While that is true, it is only half of the discussion.  The legacy I desire starts now; to impact and imprint itself on others today, tomorrow and then continue as a legacy after me.  I challenge myself first in this and my clients as well to think and plan this way.

So let’s change the focus of the conversation to say that legacy is both the money to pass on responsibly AND the lasting impact you have on your loved ones that happens today, tomorrow and for generations to come.

To the Stewardship of Your Legacy,

Luke Fields, CFP®

Values = Goals

Do Yours Match Up?

Discovering how your Values should shape your Goals

What are the most important things in your life?
What motivates you?
What or whom do you care about most?

Important questions.  Questions for you alone to answer.  I will not dare tell you what your answers should be.  

Why are your Values so important?

Values are what matters most to you.  Values shape your everyday decisions, impacting your short term and long term goals.  

Need an exercise to help determine Values?

Values and goals directly impact your financial life.

1.   Values shape your Goals (both short and long term).

2.   Goals allow you to develop a Financial Life Plan.

3.   A Financial Life Plan Directs How to invest, Whom to insure and Where to give your assets and wealth.

I would love to hear your thoughts on this and what you really value and your goals.  Please send your comments to me at luke.fields@raymondjames.com or comment on LinkedIn or Twitter. 

-Luke Fields, CFP®

Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members.

Financial Planning is NOT...

Financial Planning is NOT...

I met with a great couple the other day.  As we chatted, I asked if they had a financial plan- “ah yes, we think we do….” was their answer, so that means no.  We discussed some additional items and it became even more clear that their investments, insurance and current advisor were not coordinated and planned out well. I see this again and again with many prospective clients regardless of their age and their net worth.  It is a common problem and it frustrates me.  This is not their fault and I don’t blame them one bit.  After all, how are they to know? It is one thing if a person knows that they have “some investments” that a stock broker, registered representative or insurance agent placed them into (or worse yet, sold them).  Their expectations are correct that it is simply an investment relationship. However, it’s another thing if people believe they are getting more service, like a “financial plan”.  In reality they are majorly under-served while likely overpaying and worst yet headed down a dangerous path.  Let me explain.

Financial planning is NOT a 1x event.   A financial plan is a living, breathing plan that updates with the twists of life and the many different stages you encounter.  It is an ongoing process.  It is online and readily available to review.

Financial planning is NOT a product, investment or stock that you buy.  These should be seen as the potential vehicles for your unique situation (if appropriate) to make your plan work correctly, not the miracle cure (since the “last thing we tried didn’t work”).

Financial planning is NOT a vague ideal or attitude such as, “save as much as you can and we will figure out what you can do down the road.”  Sadly, I have heard of other so called “advisors” saying things like that.  Here is the truth… financial planning is rooted in your goals and what is truly important to you!

Financial planning is NOT a huge stack of papers that lists of 15 things to immediately do (mostly on your own).  Good planning is accomplished in a modular method, one manageable step (or two) at a time.  This is realistic.

Financial planning is NOT a quick or easy strategy.  It takes expert advice, patience and good habits over time to reach success.  You need a qualified and competent advisor to help you realize your goals.

Remember a good and useful financial plan starts with what you value.  What you value should naturally direct your goals.  And your goals then dictate what investment, insurance, tax, estate methods we use to help you achieve success in your plan.

To your Financial Plan,

Luke Fields, CFP®

Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James.  Expressions of opinion area as of this date and are subject to change without notice.

Sketches are courtesy of BehaviorGap

9 Ways to Protect Yourself Online

“Dear Sir,
I write to you today about a large sum of money.  I am a prince who needs help moving my money out of my country.  If you provide me your bank account……...”

9 Ways to Protect Yourself

1.  Never, ever use the same password twice.    Create unique, strong passwords for every site you use.  Passwords should consist of UPPERCASE, lowercase, your favorite #, $, %, ! and various numbers.  If you need to, use a password manager app to keep and safely store all of your passwords.  And change them regularly.

 2.  Don’t ever click a link or download anything from an unknown source.    Once you click, you could have just opened the “front door” to your device.
 

3.  Search and check your email “Sent” file of messages.    If your account has been hacked, you will see so here.  Search your sent box using “#” or “account” to help find any fraudulent messages.  As well you can delete any information you don’t want easily accessible for a hacker.  If hacked (spoofed) read this.  

4.  Never provide personal information to someone who contacts you first via phone, text or email.   This contact may seem innocent but don’t trust unless you have confirmed it is legitimate.  Call them back on a number you know is the actual organization’s number.  Two common examples; “Microsoft” calling to help fix a “virus” they have found on your computer and know that the IRS doesn’t call people, they usually bill you first.

 5.  Use your credit card not  your debit card.   I know the many good reasons to use a debit card, such as you only spend what you have in your bank account.  However, if your debit card is compromised, bank account meet thief; thief meet bank account…all your money will be gone.  Credit cards provide fraud monitoring for irregular card activity and will cover theft expenses.

6.  Check your credit card transactions closely and review you credit reports regularly.    How else will you quickly catch a new account opened under your name?   Use AnnualCreditReport.com to request your credit report.  Also you may want to consider investment in identity theft protection.

 7.  Limit your social media sharing.   Perusing a person’s social sites can reveal a lot, such as a pet’s name, an anniversary, birthdate or say your mother’s maiden name, etc.  If on vacation, maybe post that great beach picture after you return.  Posting while on family vacation provides an open invite for cat burglary activities at your home.

8.  Stop using public WiFi.  Or at least limit it to non-personal information searches.  Enough said.

 9.  Use a password on your phone.  And make sure your phone locks after a few minutes of inactivity.  If phone is lost or stolen, this will keep your information safe.  Plus if you have little ones, passwords help.

Foley and Foley Wealth Strategies seeks to educate and assist our clients in all areas related to their wealth and finances.  If you have a good tip on this topic, please share with us at luke.fields@raymondjames.com.  

Be safe and secure,

Luke Fields, CFP®

The "Santa Claus Rally"

What is the “Santa Claus Rally”?

Santa is readying himself to visit many children and adults alike worldwide.  It is an exciting time for all.  My youngest child and last to write a letter to Santa eagerly awaits.  I am sad to think that this may be our last year for the magic of “Santa Claus” in our household.  It has been fun.  Our full attention however can rightly be focused on the true joy of Christ’s birth for us all.

Santa Claus is Coming to...Wall Street?!

Wall Street also has a soft spot for Santa Claus.  You may have heard of what is called the “Santa Claus Rally”.  It refers to a seasonally higher stock market around this time of year, typically the week after Christmas as we head into the New Year.  Historically, December is the one of the best months for the S&P 500.  Since 1928 the S&P 500 has risen in December about 75% of the time.  Why you ask?  Good question; no one knows the definitive reason.  The most likely reason in my belief is that year-end bonuses for most Wall Street traders and investors are dependent on their performance being positive come December 31st.  So as you can imagine, they are incentivized in large dollar ways to encourage $anta to be good to them.  This results in more cash being invested in stocks and bonds to increase values.  Other potential reasons for the Santa Rally are the upbeat joy of the season, the optimistic outlook that most people hold turning the calendar over into a new year (which is called the “January Effect”) or simply the pessimists (aka “bears”) are on vacation.

“News and Noise” doesn’t Dictate Allocation

The name “Santa Claus Rally” is a great “sound bite” for the media and an amusing discussion topic.  So, will Santa visit Wall Street and the stock market?  No one knows, it is not a sure-thing.  The key is to see it for what it is, as more “noise” that simply distracts from a solid, diversified portfolio with a longer term perspective.  Don’t get caught up in the noise and enjoy Christmas and the holidays with your family.
I can guarantee that Santa will be visiting our house this year; my kids take very good care of Santa and his reindeer!  Here is a picture from 2014.  He loves M&M cookies.

From all of us here at Foley and Foley Wealth Strategies, have a Merry Christmas and a Blessed New Year!

Luke Fields, CFP®

READ more Stewardship Cents here...

Any information herein is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.  Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James.  Diversification and asset allocation do not ensure a profit or protect against a loss. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Past performance does not guarantee future results.

5 Reasons I Am Thankful for my Team

5 Reasons I am Thankful for my Team

It’s time to be thankful.  I do try to be grateful all year round but it is really encouraging to stop and deeply reflect around Thanksgiving.  We all can think of numerous reasons and people to be thankful for.  Mostly, my thoughts are of the people that are significant in my life.

We all need these special people around us to be the best we can be.  My wife encourages me as a leader, my kids challenge me to be their hero and my friends can call me out if need be.  Equally important, considering I spend many hours at work each year, my team around me is vital to serving our clients as best as possible.  What follows is why I am thankful for my coworkers and my career.  If you are already a client, this is why you should be glad you have us as your team of advisors.  If you aren’t a client, this is why you should consider joining us this upcoming year!

We are a Team.

In order to be successful, especially in the world of financial advising, you have to have like-minded people around you.  Plain and simple.  The right people in the right positions, makes all the difference.  Our team at Foley and Foley Wealth Strategies is set up this way.  We utilize the skills of five advisors with different areas of focus on our investment and planning committee and an experienced support staff to answer any question and help solve any problem as a team.  This allows us to provide the highest level of client service and attention to detail.  Together is more.

We Have a Common Vision.

Alignment around a common goal is so important.  Our goal is to help each client define what Real Wealth is for them.  This adds significant value in their lives and their family’s long term legacy plans.  We do this by listening to a client’s unique story,  helping them discover their true goals, developing plans to get there and keeping them on track.  Working as a team around this vision is rewarding and is “work worth doing”.

We Are Family.

Yes, some of us in the firm are actually related.  Others are not.  But… we all are like family here.  Our “work family” unites us and motivates us to work toward the success of our clients, our firm and to continue to do this for many years to come through a detailed plan of succession.

We Have Fun.

We take ourselves seriously when we need to and not so seriously when we can.  We are not “stuffy” and stiff as many other financial firms.  Most things can be made more enjoyable in life if we allow them to be so.  We have fun and I want to continue to encourage this for our team.

We Are Talented People.

God has blessed each of us with different skills and gifts.  Place together smart, motivated and talented people with unique skills yet sharing a common goal and… watch out!   The future is unlimited.

So to Sandy, Maryellen, JoAnn, Terri, Mike, Allison, Beth, Lisa, Jorge, Kevin and John-
Thanks for making it a blessing to work alongside you and providing the opportunity to serve others, together.

If you are not a client of Foley and Foley Wealth Strategies and your current advisor lacks a talented team, vision and clear goals for themselves or you as their client… please contact us to learn more about our team.  I am truly thankful to be on this team and you will be too!

Have a great Thanksgiving that truly shows gratitude for those around you.

Luke Fields, CFP®

Have you had “THE TALK” with your parents?

Have you had "THE TALK" with your parents?  Nope, not the birds and the bees... I am not about to help you with that talk.  Our daughter is asking enough questions on that.  I am talking about the discussion regarding your parents' finances.  Both of these talks can be awkward for many.  Well, if you haven't yet had the money talk, you are not alone.  The majority of adult children have little to no idea of their parent's true financial situation.  Like the sex talk, parents' sharing their financial situation with their adult children is often a conversation avoided.

Why is that?

Here are some common reasons why parents don't talk with their adult children about money...
Do any of these apply to your family?

1.) "We have never talked about money"
When kids are young it is thought to be a good idea to avoid discussing money so the child doesn't worry and feels secure.  While good intentioned, it doesn't help that child become financially wise themselves and never discussing money can make very important future discussions awkward to approach for both parent and kid alike.

2.) "It's none of their business"
This mentality sometimes comes from embarrassment of past mistakes, the idea that I don't want my kids to worry about me now (similar to when kids were young) or the parent simply feels it is a private matter, essentially that "it is none of their business."  Parents may have given off an image of wealth or success and are reluctant to share the reality that things are not as good as they look.   And for some parents, if wealthy, they may feel their kids may try to take advantage of them.

3.) "I don't want to talk about my death"
Mortality is not a fun discussion for the parent or the child.  Obviously, it can stir many emotions- but like taxes, death is certain.  Everyone has specific desires and requests in regards to their estate, whatever the size and more importantly, their legacy.  Often discussing money is just the initial conversation that leads to great discussions on deeper family matters.  How does a parent want to be remembered?  Are their specific belongings that they want to go to a particular child or family member?  Is there a church or charity that they want to gift money to?  Even discussions on how a funeral service should be constructed.  The list goes on and on.

4.) "I am afraid it will change their motivation"
This seems like a reasonable excuse but the truth is, by the time a parent is in their retirement years and their kids are correspondingly in their late 30s or 40s+... if that child is not already motivated in their career and to provide for their family, little is likely going to change in their attitude if they find out the parents are going to leave them a "pile of money."  They will continue to be motivated.  In fact, if a parent shares that things aren't great for them and share the things the wish they would have done differently... financially smart kids will probably get wiser and those children that are not motivated may actually get stirred to improve their own situation (especially knowing not to expect a large inheritance).

Breaking the Ice

If you find yourself in this situation as a parent who hasn't talked to your adult children or as the child trying to consider how to bridge this discussion, here are some tips.  The idea is to just get the conversation started.  It typically continues once the ice is broken.

Bring the topic up from your own perspective.

Start with your personal situation as the bridge.  Being vulnerable is always a good way to encourage others to open up.  "Dad (or Mom) recently I (we) have been making some plans on our estate (will/trust) and it made me curious about your desired plans?"

Ask for whom to reach out to.

Often the most honest and straightforward approach works best.  Simply ask, "Mom, Dad who should I call if something happens to you suddenly" or "where are your documents that I should know about?" Let your parent know you want to be ready to help if they need somebody to step in for them to pay bills or talk to their doctor.  This is where a power or attorney (POA) is a critical legal document.

Use a possession known to the whole family as a concern.

This can be a tricky option but effective in opening the door to conversations because everyone will know it needs to be addressed.  "I am worried that it's not clear what you want us to do with dad's autograph collection (the vacation home, mom's jewelry, etc) if something were to happen to you.  I want to make sure that your wishes are fulfilled and there is no possible confusion among my siblings as to what to do."   Pick an item that is important to them to discuss or a decision that is important such as funeral arrangements, burial, etc.

Use your financial advisor as the impetus for the discussion.

Financial planning is my passion and I am more than willing to be the "scapegoat" to help a family discuss such important matters.  "Our advisor suggested we find out how we can assist you with your plans.  He wants us to know your expectations and be prepared to help you."   It is common that children are named as a trustee or executor of an estate.  Sometimes they don't even know it until a parent passes or is incapacitated and needs them to step in to assist.  Talk about shock and being unprepared to help at a tough time, while dealing with the stress and emotions of a death or illness of a parent.

The REALITY like it or not

The reality is whether you are comfortable talking about money or not, money is an important part of everyone's life.  Yes, for some parents their financial situation can be a taboo topic and a personal matter.  But it cannot be ignored!  If it is disregarded, it will likely cause larger and more complex problems later in life and especially upon a parent's death.  Most parents when made aware of possible issues would rather not leave a mess for their kids to figure out.  Talking sooner than later will open up communication, help children know how to assist their parents, get parents desired plans in place legally and set their children's expectations.

We regularly encourage and assist our clients in starting the conversation about family finances.  This is what comprehensive financial planning involves.  The advisor you use should be thinking in these terms to be truly effective for your family's financial life plan.  If you need some additional ideas or help, please feel free to reach out to me.

Luke Fields, CFP®

Do You Dream?

STEWARDSHIP CENTS NEWSLETTER

How Big Are Your Dreams?

Recently, I was chatting with a CPA about helping clients reach their goals.  He shared that he often sees people that need to be pushed to not just dream, but to dream bigger.  I completely agree.  So, why do so many of us fail to dream?  I think it is because many of us lack clear goals and a planned direction on how to move forward.   Too often we settle for where we find ourselves or don’t realize the potential ahead of us.  We need to dream big!

Last month I asked all of us to consider three simple questions:

1.  What do I value?

2.  What is most important to me?

3.  How does this change my life and goals?

Thank you for the feedback I received from many of you; I am glad these questions were thought provoking.  Answering these questions helps determine what is most important to you.   This is critical because what is important to you is the starting point to setting your goals. 

The next common problem is what I opened this discussion with… how big do you dream?  Often I find when people have done the work and identified important goals, they still hit a wall in their progress to achieve them.

1.      Some people need to dream bigger.

2.       Some people need to be realistic (this is more rare).

3.       Some people have dreamed BIG- but have no idea how to accomplish their goals.

All of these situations require discussion, for us to be either “pushed forward” to go bigger in our dreams or “pulled back” to start at more realistic goal levels.  So how do you accomplish the dreams you have?  Do you randomly pick steps, do you pick the easiest or most likely result you know you can achieve or do you set a goal that will stretch you?

Planning Gives You Direction

Significant dialogue with yourself and your spouse is required to move ahead with success.  Who is helping you set goals, encouraging you to dream and providing a plan of direction?

Here is where a professional, holistic financial advisor can guide you thru the stages: discovery of what you truly value, setting realistic goals, dreaming of the potential and then developing a comprehensive plan to work towards achieving your dreams.

To Your Financial Goals and Dreams,

Luke Fields, CFP®

Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James.  Expressions of opinion are as of this date and are subject to change without notice.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation.

6 Numbers You Need to Know About Social Security

6 Numbers You Need to Know About Social Security

Good 'ole Social Security... a frequent topic of discussion, confusion and much misinformation among Americans of all ages.  Social Security is a program that has greatly changed from its original intent, is difficult to understand, has caused a great deal of political controversy over the years and is considered an "endangered species" by many.

Whether you are about to elect your own benefits, assisting your parents on their choices or are a younger professional wondering about the future of Social Security, read on.

You Decided What...?

Often I have people tell me about a decision they just made and then ask "what do you think?"  This is probably not a major issue if your decision was say... buying a new shirt or a pair of shoes (for you ladies out there).  However, when it involves a decision that will affect your life (and family's life) forever...like electing your pension payout or social security- it is REALLY important.  After the fact, whatever my opinion may be, it is irrelevant and you may not be able to reverse the decision you just made.

Social Security literally has thousands of possible claiming strategies and each option can greatly impact the amount of money you ultimately will collect from the program over your life.  Let's talk before you elect your Social Security benefit.

Here are some important numbers you need to know and understand.

66

This is considered Full Retirement Age (FRA) for those born between 1943 and 1954.  FRA gradually climbs to 66 and 11 months old for those born between 1955 and 1959.  Birthdays 1960 and later, it is 67 at this time.  FRA is the age you can claim your normal Social Security benefits.

25%

The earliest you can claim and receive your benefits is when you turn 62.  Be Cautioned... electing to receive your benefit early results in a 25% reduction of your benefits and often is irreversible after 12 months.  Taking benefits early at 62 should be rare.  Now I agree there are some situations in which it may make sense to claim benefits early (poor health and of course, the true need to meet living expenses), but they are few.  Also working after 62 while claiming early can possibly further reduce your benefits received in that year.

$1,294

In 2014, the average retired worker will receive $1,294 a month in benefits.  The 2014 maximum monthly benefit for someone at the Full Retirement Age (FRA) is $2,642.  This is based on 35 years of earning history (years of working don't need to be consecutive).   Find your estimate here.

$0

Will Social Security go broke?  This I can't say with certainty.  Heck, if I could... well that's another story.

I share with my clients that Social Security will likely continue to exist, but it will look rather different in the future.  Those that are older and currently receiving benefits are more secure to receive expected benefits; those that are younger (born after 1970) cannot likely count on the program to help them much.   Many baby-boomers have unfortunately relied too heavily on social security to help fund their ability to retire.

Younger folks need to take care of their retirement themselves by SAVING with the expectation that Social Security may not be much of an assistance in funding their retirement; and if it does provide a retirement benefit- it will just be "icing on the cake".

½

Rather than electing to receive your own working history benefit amount, you can opt for what is called a "spousal benefit."  Taking 50% worth of your spouse's benefit amount may be larger.

Divorced?  Just like regular spousal benefit, you can elect to receive 50% of your ex's benefit (whether ex is living or deceased), as long as you were married 10+ years, you are 62 years or older and are single.  Your Ex will not know (since filing does not involve them, only the Social Security Admin) and it doesn't affect his or her benefit.

32%

Once you hit Full Retirement Age, you may choose to delay taking your benefit.  This can equal a big increase in your check.  Each year you wait your benefit will grow by 8% until age 70, thus the four years from age 66 to 70 provides you a 32% increase in benefits.  Possibly well worth the wait, if it fits your financial plan.

Use Professional Advice

It is estimated that many Social Security recipients don't maximize their available benefits.  This is "money left on the table."

As a trusted advisor, I regularly help clients determine the most suitable course of action not only in regards to Social Security-claiming options, but also in how those choices dovetail into their overall financial plan.  You have to consider your likely longevity, coordinate your spouse's potential benefits, minimize taxes and maximize filing strategies (like "file and suspend") as you develop a retirement income plan that should comfortably last for decades.

To your happy Social Security benefit claiming,

Luke Fields, CFP®

Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. You should discuss any tax or legal matters with the appropriate professional.

About Stewardship Cents 

Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources.

Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is aCERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances.

Follow additional insights and connect onLinkedIn,Facebook, hisblogorTwitter. You can always reach him with comments or questions at:luke.fields@raymondjames.com.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

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Who Taught You About Money?

Who Taught You About Money?

My grandfather was a great man.  He taught me many things such as work ethic, the importance of family, taking pride in my work and financial responsibility.  His work ethic was tremendous.  He retired after 30 years with Ohio Bell on a typical Friday and on Monday morning, started his new full time career as a stock broker.  Although he meant well in his money savings, he didn't always strike a healthy balance.  There are numerous family stories of his "unhealthy" frugality.  My favorites involve him at age 75 roofing his house and at 77 black-topping his long driveway.  His roofing project gathered the attention and aide of the younger men in the family.  The driveway he had completed by himself before we even knew he did it.

My point in sharing about my grandfather is that he taught me invaluable lessons through his words and actions.  I am very grateful.  As parents and grandparents, we are responsible to teach wisely through our behavior and discussions with our kids and grandkids.  A recent survey (by Capital One) revealed that only 20% of High School students reported regularly discussing financial topics with their parents.  A whopping 34% said they have NEVER talked about money with their parents....34%!  The average credit score High School students reported as a "good score" was 500.  Oops (If you don't know, 500 is a bad score, good starts at 700 and excellent at 750+).  Our kids need our help and it is never too late to start or change a behavior.

Some children will ask about finances on their own, however most will not.

Here are some ideas and resources to use for a variety of ages.

Teaching our kids to save is a must.  The key is to find what works for your family.  Maybe it is a glass jar or a container with their favorite cartoon character.  It is then important to discuss choices with their money-- Here is what my family uses to encourage a choice after money is earned.

Choices:  1.) Share (church)  2.) Save3.) Spend Then at some point the "piggy-bank" turns into a wallet/purse.  Mint.com is a great free app to track and review spending habits.   Or try AllowanceManager.com to track allowance.

The Value of a Dollar.  There are different views on this.  Key is to teach work ethic, responsibility and that nothing is free.  Some say allowance should be earned, some say it should just be given.  In our family, our kids have set things they must do (chores).  Once those are completed for the whole week- they get a pay day.  They have the opportunity to do extra chores or be thoughtful helping around the house to even earn extra money (a bonus).

Teach in the Moment.   For example, at the grocery store as I swipe my credit card, I ask Kaitlyn, my nine year old, "Am I paying cash for our food?"  The first time I asked this she was confused but since then, we have had many discussions why I am using credit- as a convenience and ONLY because I have the actual dollars in the bank to pay off my bill each month.  Or try this- when that cool new car commercial comes on... pause the TV (right when all the fine print pops up).  Ask them "Would you rather pay for the car and own it or pay for the car for 3 years and then give it back to the dealership?"  I am not saying a lease is always a bad idea, but it is a money choice that has to made and understood.

Get a Job.  The responsibility and duties of a job are extremely valuable.  Think back to your first job- what did you learn?  I bet similar learnings will be for your child.

Open a bank account.   The simple balancing of a check book or using a debit card can be a big learning experience along with talking to a banker about their money.  It is an important process to learn.

Seek out financial learning.  Personal financial courses are sometimes offered in Middle School and typically in High School for your child.  As well, ask your financial planner to meet with you and your child to share some ideas/tips.  Any advisor worth something will love to do this to help educate and as a service to you as their client.

Start a Roth IRA.  With a job, even if it is mowing lawns in the neighborhood- there is earned income, which is eligible for a Roth IRA contribution.  Picking a suitable investment to watch encourages healthy retirement saving habits.  Starting at age 15 and contributing a one-time $5,000 investment (with no additional investments) for 50 years, averaging 7% return will yield about $147,000 tax free at age 65.

Some Resources to check out, I mean it...

Money AS You Grow  This site shares guidelines and talking points for specific age ranges with activities to complete from money basics, avoiding identity theft, credit cards to college loans.

Warren Buffett has created a great resource to teach kids about money using short animated episodes and a variety of other tools and family activities.

Teaching kids about money is not an easy task, but it is so necessary.  Find what works for your child and family.  Grandparents, come alongside your kids in teaching this to your grandkids; just like my grandfather.  Fight to be consistent in allowance, chores, discussing topics and share from your money experiences- both the good and the bad.  It will likely stretch you to also improve your current financial behavior.

To Your Child's and Grandchild's Financial Success,

Luke A. Fields, CFP®

All examples are hypothetical illustrations and are not intended to reflect the actual performance of any particular security. Future performance cannot be guaranteed and investment yields will fluctuate with market conditions.  Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Luke Fields and not necessarily those of Raymond James.  The companies and their opinions are not affiliated with Raymond James.  Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members. 

About Stewardship Cents

Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances.

Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at: luke.fields@raymondjames.com.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

Join Our Mailing List

Do you have a Gap? ...in your insurance coverage

Do you have a Gap?

My question has nothing to do with your teeth, I am not a dentist.  It actually is about the coverage gaps in your insurance...which may be just about as equally exciting to you as a root canal.  Like it or not insurance of all types are required for a well-balanced financial plan of protection: home, auto, life, disability, business, dental...you get the point.

Insurance can cover a wide variety of activities and professions.  For example, Germany who just won the 2014 World Cup, has an insurable estimated value as a soccer team of over $1.01 Billion (Lloyds of London).       

Common Gaps 

Jokes aside, insurance is the foundation of your financial plan and protecting your family.  It serves as protection for your income, wealth, business continuity and estate plans.

Here are some important gaps to consider closing:

No life insurance beyond your basic group coverage.

Basic life plans offered thru work are usually 1x or 2x your salary.  You probably need close to 8-10x your salary in life insurance.

Not enough protection on your earnings.

If you are disabled and unable to work, your finances could suffer quickly.  Group Long Term Disability offerings thru work are usually only 50-60% of your salary and that benefit is then taxed, leaving you with a large income gap.

Not updating your Homeowners regularly.

Enjoying the recent home renovation or addition?  Your actual home replacement cost if damaged just increased.

No coverage on your valuables.  You can easily add jewelry, collectibles, furs, artwork and others as what are called "inland marine endorsements." This will provide the right amount of coverage whether destroyed, misplaced (lost) or stolen.

No Umbrella policy.

This is personal catastrophic liability coverage that protects you above and beyond your basic home and auto policies.  It is relatively cheap ($150 to $200/year) to add to your current policies.

No proper plans in place at your business.

Is there enough money for your business to cover overhead expenses if something happens to you?  What if your business partner passes or becomes disabled?  Drafting sensible business continuity insurance is a necessary protection for your business' value, your employees and your estate.

Addressing insurance gaps is an essential part of any good, comprehensive financial plan.  They need to be identified, reviewed and updated regularly.  Contact your property and casualty agent for the home and auto items (I am sure they will thank me for these thoughts...).  I will be able to assist with the rest.

As always, I am here for any questions.

To Your Financial Planning,

Luke A. Fields, CFP®

About Stewardship Cents  Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances. Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at:luke.fields@raymondjames.com. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

Summer Vacation Plans. There may be more to your checklist. Estate Planning

Planning Your Summer Vacation

Ah summer time. School is out, schedules tend to be a little more relaxed and there are many fun family things to do.  One of our annual traditions, like most families is our summer beach trip.

Your Estate Plan

My practice is focused around each client's detailed and personal financial plan.  This is a comprehensive look at your goals, insurance coverage, tax situation, college needs, investments and your estate plan.  Each one of these areas has to work together and make sense for your family.  This is very true of your estate plan.

To share more on this topic in reference to summer vacation, I asked Gary Vinson, an Estate Planning Attorney to share some quick thoughts around the importance of estate planning.

Summer is here and vacation planning is in full swing.  In fact, vacation season seems to prompt more inquiries for first time consultations than any other time of the year.  As we move down our checklist to include the swimming trunks and sunblock there is not likely a "to-do" for updating the Estate Plan or for preparing for our untimely demise.  But, inevitably, this thought creeps into our mind and we think what if....

What if my spouse and I pass away at the same time?  What if our Executor is on the same plane as we are on?  What if our Guardian moved to Montana since the last time we updated our Will?  However unlikely these what ifs are to actually occur, the underlying fear should not be too quickly dismissed only to re-emerge at the first sign of turbulence on your flight.

Finding time to review your Estate Plan and Financial Plan before a vacation can provide you with the reassurance that your affairs are in order.  Whether a consultation reaffirms that your plan covers the what ifs or whether it reveals a gap in your plan, reviewing your plan with a professional can provide confidence it is right for you.  Then you can enjoy the trip that you worked so hard to go on in the first place.

Feel free to reach out to Gary or me if you have questions.  Here is his contact information:

Law Offices of Gary Vinson II, Inc.

Telephone: 614.478.0777 Mailing Address: 7385 North State Route 3, Box #13

Westerville, Ohio 43082

Have a great summer break,

Luke Fields, CFP®

Raymond James is not affiliated with and does not endorse the opinions or services of The Law Office of Gary Vinson II, Inc.

About Stewardship Cents  Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources. Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is a CERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances. Follow additional insights and connect on LinkedIn, Facebook, his blog or Twitter. You can always reach him with comments or questions at:luke.fields@raymondjames.com. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC

Diversification is like making Cheesecake.

Use the Right Ingredients and Follow the Recipe

I unknowingly started a tradition 4 years ago.  It all began with making a cheesecake for Mother's Day for my wife, mother and mother-in-law.  Since I do not consider myself talented in the kitchen, it was a complete stab in the dark to attempt this...very much outside my comfort zone.  The cheesecake ended up being a big success and now it is a tradition.  What I discovered was that, by following some good advice from my wife and following a specific recipe precisely, the results were considered the "best cheesecake ever eaten."

Diversification is like making Cheesecake.

You have to have the right ingredients, mixed together properly with the right timing to get an excellent cheesecake.  This is also essential in the diversification of your investments.  Diversification is equated to the proverbial"don't put all your eggs in one basket."  While this is true to building a well-diversified portfolio, there is much more to it.  Let me explain some key principles.

"Diversity reduces adversity."

-Burton Malkiel, Princeton Professor and Economist

Don't Put All Your Eggs in One Basket.  Diversification seeks to spread the risk out into various investments (that have low correlation), thus reducing the volatility of a portfolio.  Think of diversification like the shock absorbers on a car, smoothing out the bumpy (volatile) ride of financial market roads.

Get the Right Asset Mix.  Variety is obviously important but the % allocation is important.  Factors based on your personal risk tolerance, goals and time horizon help direct this.  This is where your financial plan is essential.

Don't Over Do It.

  Yes, you can have too much of a potentially good thing (like cheesecake)- it is called "over-diversification."  This is a common problem.  Spreading yourself too thin will likely mute your return.  The focus should be on a variety of assets that are good quality, not the quantity.

Diversify Within Each Category.  Your stocks should include the proper allocation of US stocks and International Stocks between large, mid and small sized companies.  There are literally dozens of categories of bonds between Government, Corporates, Foreign, High Yield, Etc. Consider Real Estate, Commodities, Alternatives and Cash as other important diversifiers.

https://www.raymondjames.com/legal-disclosuresbetween Government, Corporates, Foreign, High Yield, etc.   Consider Real Estate, Commodities, Alternatives and Cash as other important diversifiers.

Evaluate Other Allocations.

  Do you have a large portion invested in your company's stock?  This is likely a risk because you are over diversified between your gainful employment and your investments being tied so closely together.  How about real estate?  If you own rentals and properties you likely don't need real estate investments in your portfolio.

Timing is Key.  Have patience and give it the correct amount of time.  Diversification works over long economic cycles.  Also attempting to time the market can't be consistently achieved, despite what some people say.  Dollar Cost Averaging (regularly placing money on a monthly basis) can also be an effective method for investing your portfolio.

Diversification is a delicate balance of the right investments and the right time-frame.  Utilize certified professional advice in making diversification work inside of your financial plan.

Enjoy some cheesecake too!  Mine is not for sale- I only make it once a year and it goes quickly.

All the best in your planning,

Luke Fields, CFP®

The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material and does not constitute a recommendation. Any opinions are those of Luke Fields and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Diversification and asset allocation does not assure a profit or protect against a loss. Investing involves risk, you may lose you principal. Dollar-cost averaging cannot guarantee a profit or protect against a loss, and you should consider your financial ability to continue purchases through periods of low price levels.

About Stewardship Cents 

Stewardship Cents exists to Educate, Entertain and Enhance the financial wisdom of all who read it.  Everyone needs to be wise with what has been entrusted to them and common sense can help us be good stewards of all that we have.  Stewardship is a belief of responsible overseeing and protecting of important resources.Luke Fields is Vice President of Foley & Foley Wealth Strategies, An Independent Firm, that has been based in Worthington, Ohio since 1981.  A graduate from The Max M. Fisher College of Business at The Ohio State University, Luke is aCERTIFIED FINANCIAL PLANNER™, holding his Series 7, 66 and Ohio Life, Health and Variable Annuity Insurance licenses.  He resides in Columbus, OH with his high school sweetheart, Beth and their three children.  Luke is an active member of his church, serving in leadership and finances.

Follow additional insights and connect onLinkedIn,Facebook, hisblogorTwitter.You can always reach him with comments or questions at:luke.fields@raymondjames.com.

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