Fresno Financial Advisor News: The Coronavirus and Other Oddball Risks

One of the reasons investing never gets boring is because it is an ever-changing, never-sleeping industry that presents new opportunities — and new risks — every day.

One of the most recent threats to the global business economy, and therefore investors, is the coronavirus and its far-reaching impact. China, home to much of the world’s manufacturing, has been hard hit by the epidemic. In its wake, travel has been one of the first casualties. This is bad news not just for tourists, but for the thousands of business representatives who fly in and out of the country each day. The virus outbreak among Chinese workers threatens business trade and supply chain production for markets throughout the world.¹

The outbreak of coronavirus is but one example of the types of unexpected risks that can disrupt a wide variety of industries — and one example of why financial advisors recommend diversification. While all investments involve risks, there are additional risks associated with foreign investing, such as currency fluctuations, economic instability and political developments. Building an investment portfolio that includes uncorrelated asset classes can help defend against the wide range of both anticipated and unanticipated risks that investors face. We’re happy to review your portfolio to assess how much market risk you might be exposed to; just give us a call.

If you don’t think the coronavirus has impacted U.S. companies, think again. McDonald’s, Starbucks and H&M have all had to shutter stores in China. Disney closed its Shanghai and Hong Kong theme parks. The Marriott, Hyatt and Hilton hotel companies have suspended some operations in areas most affected by the virus. Carnival and Royal Caribbean Cruises have been forced to cancel scheduled voyages to help curb the spread from one country to another.²

The problem isn’t isolated to retail stores, either. Technology companies like Apple and Google have restricted employee travel either completely or only for “business-critical situations.” Additionally, General Motors, Honda and Nissan have suspended auto production.³

According to Wilbur Ross, the U.S. Secretary of Commerce, there is perhaps a silver lining to the crisis. In a recent interview, he intimated that if U.S. manufacturers returned many of their offshore operations to America, they could better control such risks.⁴

However, risk is risk — and it takes on many different guises, even domestically. Some investment analysts warn that political campaigns heading toward the November elections may be a primary source of market volatility throughout the year. The two major political parties appear as divided as ever with policies that offer both positive and negative components. Regardless of party affiliation, both offer platforms that seem likely to increase spending and expand our nation’s debt.

This dynamic is likely to stretch U.S. Treasury valuations even further, while the relationship between the Federal Reserve and the investment markets may continue to be strained. While the Fed altered monetary policy in 2019 to accommodate markets, there could be less wiggle room now to combat any further risks to the economy such as rising asset price inflation.⁵

And then there’s the problem of trade wars promulgated by aggressive 140-character tweets — an approach that tends to pain Republicans and Democrats alike, not to mention Wall Street.⁶

Fresno Financial Consultant Takeaways

As your Fresno financial advisor we thought this was a good takeaway. Investing never gets boring. One of the most recent threats to the global business economy, and therefore investors, is the coronavirus and its far-reaching impact. The virus outbreak among Chinese workers threatens business trade and supply chain production for markets throughout the world.¹ If you don’t think the coronavirus has impacted U.S. companies, think again. McDonald’s, Starbucks and H&M have all had to shutter stores in China. Keep in mind that while the Fed altered monetary policy in 2019 to accommodate markets, there could be less wiggle room now to combat any further risks to the economy such as rising asset price inflation.⁵

Soutas Financial & Insurance Solutions Inc. your Fresno financial advisor is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Content prepared by Kara Stefan Communications.

¹ Franklin Templeton. Jan. 24, 2020. “Monitoring China’s Outbreak and Other Potential Market Shocks.” https://www.franklintempleton.ca/en-ca/investor/article?contentPath=html/ftthinks/common/blogs/monitoring-chinas-outbreak-and-other-potential-market-shocks.html. Accessed Feb. 5, 2020.

² Sergei Klebnikov. Forbes. Jan. 28, 2020. “Coronavirus Hits Big Business: These Companies Are Cutting Operations And Restricting Travel To China As Disease Spreads. https://www.forbes.com/sites/sergeiklebnikov/2020/01/28/coronavirus-hits-big-business-these-companies-are-cutting-operations-and-restricting-travel-to-china-as-disease-spreads/#509d69381264. Accessed Feb. 5, 2020.

³ Megan Cerullo. CBS News. Jan. 30, 2020. “China coronavirus causing chaos for U.S. companies.” https://www.cbsnews.com/news/coronavirus-brings-business-operations-in-china-to-standstill/. Accessed Feb. 5, 2020.

⁴ BBC News. Jan. 31, 2020. “Wilbur Ross says Coronavirus could boost US jobs.” https://www.bbc.com/news/business-51276323. Accessed Feb. 5, 2020.

⁵ Sonal Desai. Franklin Templeton. Jan. 14, 2020. “On My Mind: Will the US Survive the Politics in 2020?” https://www.franklintempletonnordic.com/investor/article?contentPath=html/ftthinks/common/cio-views/on-my-mind-will-the-us-economy-survive-the-politics-in-2020.html. Accessed Feb. 5, 2020.

⁶ Ibid.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Fresno Financial Advisor News: Baby Boomers Staying Home for Retirement

In 1989, Harvard economists published a study concluding that as baby boomers aged out of the residential real estate market, there would be a glut of empty homes and prices would plummet.¹ That clearly hasn’t happened yet, for a variety of reasons.

Economists didn’t account for boomers’ life expectancy extending so much longer. People are living more years in retirement and choosing to age in place instead of moving to retirement homes. About 63% of homeowners over age 55 say they plan to live out their life in their current home, and 37% plan at least one more move.²

Thanks in part to the lean lessons of the recession, people are also less inclined to “trade up” and place so much of their net worth into higher-priced real estate. The average duration someone lives in one house has increased from six years (before the 2008 crisis) to around 10 years.³

Economists also didn’t imagine another generation (millennials) would one day be larger than the baby boomers’. As millennials age, they are placing greater demands on the housing market. This crossroads of increased demand and low supply has caused home prices to increase substantially in quite a number of places in the country, particularly metropolitan areas where there are good-paying jobs.

Economists at a recent Real Estate Forecast Summit, sponsored by the National Association of Realtors, predicted real estate prices will continue to rise and asserted that a recession in 2020 was unlikely.⁴ In a separate forecast, Realtor.com calls for a continued shortage of existing homes, but a boon from new homebuilders. They say a contingent of millennials have skipped the traditional starter home and moved straight to midpriced, trade-up homes.⁵

Today’s new residential market has generated a new trend: January is the new April. Spring has traditionally been the most active buying season, but in 2019, January was the busiest month in many of the largest metropolitan markets, including Chicago, Dallas, Houston, Seattle, Atlanta, Denver and San Jose. Given this current trend, industry experts anticipate fewer homes for sale this spring.⁶

Fresno Financial Planner Takeaways

When it comes to Fresno retirement plan consultant Soutas Financial puts your future first. Don’t forget these great reminders: Economists didn’t account for boomers’ life expectancy extending so much longer. Thanks in part to the lean lessons of the recession, people are also less inclined to “trade up” and place so much of their net worth into higher-priced real estate. The average duration someone lives in one house has increased from six years (before the 2008 crisis) to around 10 years.³ Economists also didn’t imagine another generation (millennials) would one day be larger than the baby boomers’. As millennials age, they are placing greater demands on the housing market. Given this current trend, industry experts anticipate fewer homes for sale this spring.⁶

Soutas Financial & Insurance Solutions Inc. your Fresno retirement planning advisor is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Content prepared by Kara Stefan Communications.

¹ Paul Kupiec and Ed Pinto. Los Angeles Times. Jan. 5, 2020. “Are baby boomers ruining the housing market for everybody else?” https://www.latimes.com/opinion/story/2020-01-05/are-baby-boomers-ruining-housing-market. Accessed Jan. 9, 2020.

² Ibid.

³ Ibid.

⁴ National Association of Realtors. Dec. 11, 2019. “Expect Continued Economic Growth, Slower Real Estate Price Gains and Small Chance for Recession in 2020, According to Group of Top Economists.” https://www.nar.realtor/newsroom/expect-continued-economic-growth-slower-real-estate-price-gains-and-small-chance-for-recession-in. Accessed Jan. 9, 2020.

⁵ Diana Olick. CNBC. Dec. 4, 2019. “Next year will be hard on the housing market, especially in these big cities.” https://www.cnbc.com/2019/12/04/harsh-housing-forecast-for-2020-especially-in-these-big-cities.html. Accessed Jan. 9, 2020.

⁶ Diana Olick. CNBC. Jan. 2, 2020. “Competition for housing is so high, the spring market is starting now.” https://www.cnbc.com/2020/01/02/competition-for-housing-is-so-high-the-spring-market-is-starting-now.html. Accessed Jan. 9, 2020.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Fresno Financial Advisor News: Student Loan Debt Affects More Than Millennials

Common sense would suggest older workers have a much easier time saving than young adults. They are more likely to have already purchased a home, put kids through college and, by that point, are putting more money away for retirement.

A recent study by the Transamerica Center for Retirement Studies confirms this is true, but the difference isn’t as big as you might expect. The report shows 78% of baby boomers are saving for retirement, compared to 77% of Generation X and 71% of millennials. The numbers may be skewed by the fact that some baby boomers have already retired, but a 70-plus percent savings rate is pretty impressive for younger generations.¹

The message appears to be getting through: Americans need to save more for retirement. It’s heartening to see younger adults making this a priority, especially since many are also saddled with college student loan payments. Regardless of what life stage you’re in, saving regularly is an important habit. If you’re wondering which types of savings or investment vehicles are appropriate for your particular circumstances, we can help. Please give us a call to schedule a consultation.

Another reason the millennial generation may be saving more is that they’ve been squeezed out of the market for buying a house.² Home values have increased significantly in certain areas of the country, giving some potential first-time homebuyers time to focus their resources on getting out of debt and saving and investing for retirement. This could be a silver lining when you consider the advantages of compounding interest over many decades.

However, millennials aren’t the only ones juggling debt. Americans over age 60 have amassed a total debt of more than $3 trillion, mostly on mortgages. But this generation also owes nearly $100 billion on student loans,³ suggesting people close to or in retirement are co-signing loans for children or grandchildren, or even paying off loans on their own education later in life.

Note that one of the provisions included in the SECURE Act, passed in late 2019, allows for withdrawals up to $10,000 from college savings 529 plans to help repay student loans.⁴

Fresno Financial Advisor Takeaways

Fresno portfolio advisor – Soutas Financial appreciated these points: Common sense would suggest older workers have a much easier time saving than young adults. The message appears to be getting through: Americans need to save more for retirement. Another reason the millennial generation may be saving more is that they’ve been squeezed out of the market for buying a house.² However, millennials aren’t the only ones juggling debt. Americans over age 60 have amassed a total debt of more than $3 trillion, mostly on mortgages. But this generation also owes nearly $100 billion on student loans,³ suggesting people close to or in retirement are co-signing loans for children or grandchildren, or even paying off loans on their own education later in life. Regardless of what life stage you’re in, saving regularly is an important habit.

Soutas Financial & Insurance Solutions Inc. your Fresno retirement planning advisor is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Content prepared by Kara Stefan Communications.

¹ Transamerica Center for Retirement Studies. Dec. 19, 2019. “19th Annual Transamerica Retirement Survey.” https://transamericacenter.org/retirement-research/19th-annual-retirement-survey#compendium. Accessed Jan. 9, 2020.

² Lindsay Walker. Cronkite News. Jan. 8, 2020. “Despite slight uptick, millennials still face homeownership challenges.” https://cronkitenews.azpbs.org/2020/01/08/despite-slight-uptick-millennials-still-face-homeownership-challenges/. Accessed Jan. 9, 2020.

³ Angela Antonelli. Dec. 26, 2019. “When it comes to financial angst, boomers and millennials have more in common than they think.” https://www.marketwatch.com/story/when-it-comes-to-financial-angst-boomers-and-millennials-have-more-in-common-than-they-think-2019-12-24. Accessed Jan. 9, 2020.

⁴ Fidelity. Jan. 2, 2020. “The SECURE Act and you.” https://www.fidelity.com/learning-center/personal-finance/retirement/understanding-the-secure-act-and-retirement. Accessed Jan. 9, 2020.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Fresno Financial Advisor News: Late Career Management

The number of workers older than 64 has increased threefold since 1989.¹ And while working longer may be a marker of good health for some, it’s a necessity for others who need the income. As a result, we may need to rethink our idea of what retirement looks like in the 21st century.

Consider that working longer could be a problem if you’re relying on it as a retirement savings strategy. That’s because a 2018 study found that more than half of older U.S. workers, many of them mid- and late-career managers, were forced out of their jobs before they chose to retire.² Working longer has a lot of advantages, such as the ability to save more money and to grow your assets and your Social Security benefit. Unfortunately, sudden job loss — compounded by the difficulty older workers experience finding new jobs — can cause serious financial damage.

If there is one thing we can count on in life, it’s that life is always changing. We encounter great joys and great challenges, and often it’s how prepared we are that helps us recover and persevere. As insurance professionals, we believe it’s important to be prepared for any type of change that may come your way. If we can help you devise an insurance strategy to help you plan for the income you need in retirement, please give us a call.

It used to be more common for people to retire on their own terms, and there may be a way we can get back to that. But it doesn’t mean bucking the system; it requires embracing change. That change, for many people, could mean working in the “gig economy” with a sideline business. Think about it. By the time you are in the latter stages of your career, you likely have more experience than the vast number of colleagues around you. How can you leverage that for independent income?

Today, more than a third of America’s workforce participates in the gig economy, whether full time or part time.³ Even if you do not have knowledge that translates into a sideline business as, say, a consultant, perhaps you’ve developed another skill that could provide you income. Are you a baker or a carpenter? Perhaps you could drive for a rideshare service or walk dogs in your spare time. Working for yourself comes with plenty of perks, such as accepting only the jobs you want and scheduling hours that work for you. Like it or not, the gig economy could be the defining work/life balance solution of this century.

Many people may be uncomfortable with the idea of changing jobs or careers late in the game. That is certainly understandable. But it’s important to remember that many retirees didn’t get to make that decision on their own. So imagine for a moment what you would do if you lost your job late in your career. Would you look for another job in your field? Would you consider starting your own business? Would you go in a completely different direction — perhaps pursue something you’ve always wanted to do?

Let’s say you don’t even need the income; you have plenty of money saved to retire on — you just don’t want to retire … yet. So what would you want to do? Taking time to consider this question could be instrumental in shaping the new, 21st century perspective on retirement.

And why not? Consider that you have a lifetime of experience — both in career and in life lessons learned. If you are in the latter stages of your career, it’s time you take charge by putting together a plan B — just in case.

You could consider your potential career change a gift to the next generation. Many Gen Xers and millennials now say the biggest obstacle in their career path is that more baby boomers are putting off retirement, so there’s little room for promotions to middle- and higher-level jobs.⁴

That’s a lot to think about. But perhaps the 21st century vision of retirement isn’t to stop working, but rather to pursue income-producing dreams.

Fresno Financial Consultant Takeaways

Fresno financial planning is our utmost concern here at Soutas Financial and we thought these takeaways were worth mentioning again. In our day, while working longer may be a marker of good health for some, it’s a necessity for others who need the income. As a result, it might be good for us to rethink our idea of what retirement looks like in the 21st century. Sadly, sudden job loss — compounded by the difficulty older workers experience finding new jobs — can cause serious financial damage. Many people may be uncomfortable with the idea of changing jobs or careers late in the game. That is certainly understandable. So what would you want to do? Consider that you have a lifetime of experience — both in career and in life lessons learned. If you are in the latter stages of your career, it’s time you take charge by putting together a plan B — just in case.

Soutas Financial & Insurance Solutions Inc. your Fresno portfolio advisor consultant is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!

Content prepared by Kara Stefan Communications.

¹ Stef W. Kight. Axios. Nov. 16, 2019. “Special report: Retirement becomes more myth than reality.” https://www.axios.com/retirement-myth-reality-d64d1e74-df04-49b7-9629-2cab2609a917.html. Accessed Dec. 18, 2019.

² Knowledge@Wharton. Dec. 3, 2019. “Forced Out of Your Job Mid-career? Here’s How to Prepare.” https://knowledge.wharton.upenn.edu/article/forced-job-mid-career-heres-prepare/. Accessed Dec. 18, 2019.

³ US Bank. 2019. “Understanding the expanding gig economy.” https://financialiq.usbank.com/index/landing-page/gig-economy.html?c3ch=Paid%20Social&c3nid=TW-21808397. Accessed Dec. 18, 2019.

⁴ Paul Davidson. USA Today. Nov. 7, 2019. “Millennials, Gen Xers to baby boomers: Can you retire so I can get a job promotion?” https://www.usatoday.com/story/money/2019/11/07/jobs-baby-boomers-older-workers-may-block-millennials-careers/4170836002/. Accessed Dec. 18, 2019.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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