Home | Contact Us | Site Map
HOME
This Month's Member Profile
Franco M. Piscitelli
Barnum Financial Group
Financial Services Representative:Franco Piscitelli
Phone: T: 203-689-9012 | F: 203-458-1167
Address: 2614 Boston Post Road, Suite 33B, Guilford, CT 06437
Email: FPiscitelli@barnumfinancial.com
Website: www.barnumfinancial.com

Investing in Unchartered Waters

Currently, markets are at all-time highs. We have been in an 8 year plus S&P 500 bull market run, the second longest in history. The longest bull market run for the S&P 500 was from 10/1990 to 03/2000 which lasted 113 months. A bull market is defined by stock prices that continue to rise without a 20% decline, which then would be considered a bear market. We've had several market "corrections" since the lows of the market on 3/6/2009. A correction is defined as a 10% drop in the market from it's high point. Corrections are more common than bear markets.

In a new and unique political climate, my clients from both sides of the aisle ask me, when will the bear market come? This of course is a very difficult question to answer. As a Certified Financial Planner , I assess the financial needs of individuals and businesses and help them with investments, retirement, and insurance planning, regardless of the political climate.

There is always a reason not to invest and every major geopolitical or global incident feels like this will be "the big one." A quick look at recent history, we had a gas shortage in the 70's, high unemployment and inflation in the early 80's, the bank crisis of 1985, the Black Monday stock market crash in 1988, the first Gulf war in 1990, the tech bubble burst in the 2000's, 9/11, the 2nd Gulf war, the mortgage crisis of 2008. The US even had their credit rating lowered in 2011. And that's just to name a few. Yes, those moments showed times of great volatility in the stock market, but eventually the markets recovered, and grinded ever higher. From the period of 10/1/1996 through 9/30/2016, a 20 year period, consider these points. If you invested $10,000 at the beginning of that period in the S&P 500 and made ZERO changes, just left it alone and forgot about it, you would have $45,850 at the end of the period, an average of 7.64%. If you tried to time the market in the same time frame and you got it wrong and missed the best 25 days of the market, you're $10,000 would only be $11,568. Less than 1% return. The lesson here is its "time in the market, NOT timing the market."

So, what does one do? It's about having a plan in place to weather storm of any market condition. If you're uncertain, now is a good time to reevaluate your situation. First, reevaluate what your financial goals are. Is it retirement? College planning? Buying a home? Each goal requires a different investment strategy and risk profile depending on your time frame.

We find many times that clients who come to us for the first time have investment strategies and financial goals that don't align. Perhaps you thought you were super aggressive, but your investment allocation might be considered conservative. Or, your expectations for retirement might be unrealistic. For most people, retirement is a big goal. People think once they retire, their investment strategy will change drastically. But they don't consider the fact that they may be retired for 20, 30, or 40 years! That's a long time frame for investment purposes. Don't automatically assume you should be more conservative when you retire. If your investments can't keep up with inflation, you run the risk of running out of money. Longevity is a major risk many retirees don't consider. It's possible you may be retired for a longer period of time than you actually worked! You need to make sure your investments can grow to keep up with the need for more income each year in retirement. Based on 4% inflation rate, a $1 of expenses today will be $3.31 of expenses in 30 years!

In today's uncertain political and economic environment, it's more important than ever to reevaluate your goals, reassess your risk tolerance, and tweak your strategy so that it all dove tails together to increase your chances of success. As a CFP , we can't predict the future. But, we can help you make sure you're making good decisions with what you have and keep you on track with your financial goals. No matter who's in the White House or what's going on around the globe, it's important to invest in the areas that will most benefit from those economic conditions or policies. It's very important to take the emotion out of investing. If not, you run the risk of making the "big mistake." Through uncertain market conditions like these, it's important to have a financial advisor that can hold your hand. Together, you can navigate those unchartered waters and achieve retirement success.