The data provides a baseline.
We are not prognosticators but except when we make an observation about current markets. We seem to be in the midst of the first correction in a long time with Year-to-Date averages performance Nasdaq -7.5% SP500 -6%. The heuristic bias that is very strong is whatever is happening now will persist forever. Markets are moving higher and that will persist. Markets are moving lower and that will persist. That is why it is hard for investors to purchase stock as the stock market declines. Even though the goal is to buy low and sell high. It is easy to discuss but much harder to practice. We had a great 2023 and a strong beginning to 2024 but declines happen much quicker than market advances. The stronger than expected economy and persistently higher interest rates have finally given the market pause with the persistently higher interest rate winning the good news/bad news balance point. Stock markets are expensive and interest rates are high. In the SF Bay Area, we are reading every day about technology company layoffs with Google being the latest but other smaller companies are laying off. The unemployment rate in the SF Bay Area is currently 3.8% which is still historically low but up from a year ago 2.9%.
The SAS team takes a deep dive into personal financial planning for our clients. Every meeting reminds us that the implementation of decision making in regard to financial planning involves tradeoffs. It is hard to have everything and give up nothing regardless of your owned assets. Part of the process is to highlight the tradeoffs in order to get a sense of current priorities. Ultimately, the decision is up to the client after thinking about the consequences and discussing the tradeoffs with the partner. It is necessary but not sufficient to have up to date data, including the basics such as income, saving and spending. That is merely one dimension of the information necessary to make the best decision. The data provides a baseline. Often the data offers options in regard to decisions. Determining which option is the best at the time involves a multi-dimensional discussion including lifestyle, life stage, emotions, partner, family members and more. There is no substitute for the meeting/discussion. Even with us and/or the client having some idea of what the questions/issues are, the discussion has a unique layer for enabling the advisory relationship to work the best, determining that you are doing the best that you can do at the time. The only guarantee we make is that whatever decision is made it will probably change in the future. The service of ongoing financial planning works well to help clients adapt and subject changes to the same advisory relationship that has been built over time.
In the News
Heirs Get More Time to Keep Their Money in Inherited Retirement Accounts
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