Cybersecurity Presentation - Event Recap

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In today's world where everything is digital, how can you keep your data protected? We took a further look into this topic to provide clear solutions.

On September 16th 2022, Gilbert & Cook hosted a cybersecurity event, featuring three members of our Compliance Committee. We presented the ways Gilbert & Cook protects your data, the ways Charles Schwab protects your data, and ways you can protect your data.

Here are the big takeaways from the event:

  • Be password smart; create a strong password by using letters, symbols, and numbers. Never use the same password for multiple logins. For critical accounts such as your bank account, credit cards, retirement account, and phone, setup two-factor authentication. Two-factor authentication is where you are required to enter a generated code sent to you as a text message or email to gain access to your account.

  •  Think before you click on links in an email or text. You can do this by hovering your cursor over any URL links being sent; is the URL link a legitimate site? Scammers will attempt to disguise themselves as someone familiar to you, verify the sender's email address or phone number. Another area to look at is the time the email or text was sent. Often times scammers will send emails or texts outside of regular business or daily hours.

  •  Keep your devices updated. Computer and mobile operating systems offer updates that will include security patches. These patches are important as they allow your devices to be up-to-date on the most recent systems upgrades. Typically these updates are pushed out to you, and you are prompted to allow them to update and install.

  •  Almost everyone has home Wi-Fi, password protect yours. Ensure your network is private, check to make sure only your devices are using your internet. Do not use public Wi-Fi networks such as those available at the grocery store, library, coffee shop, or airport. When you need to use Wi-Fi while on-the-go, use your phone as a hotspot.

Disclosure: The presentation on September 16th 2022 was meant for informational purposes only. The featured speaker is not affiliated with Gilbert & Cook, Inc. Gilbert & Cook, Inc. does not offer tax or legal advice. You should consult with an attorney for legal advice and a qualified tax professional for tax advice. Gilbert & Cook, Inc. is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client services agreement is in place.

2022 Mid-Year Update - Event Recap

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History doesn’t repeat but it often rhymes. To gain a better understanding of our current markets and put this year in perspective, it’s important to understand what’s happened in the past.

On June 30th 2022, Gilbert & Cook hosted a mid-year update event, featuring BlackRock economist, Mark Peterson. Halfway through the year and it's certainly been a remarkable historic start. Let’s take a look back at some of the unusual outcomes thus far.

Here are 5 big takeaways from the event speaker:

1) We’ve clearly seen a challenging start for both stocks and bonds so far in 2022. Stocks and bonds are both negative; which is very rare. Over the last 95 years, stocks and bonds have been negative at the same time in the same calendar year, twice – in 1931 and 1969. The culprit? The market trying to digest the economy and figure out where we’re headed from here. This year, the markets priced in a lot of short-term interest rate increases by the federal reserve in effort to slow the economy and bring inflation back to more modest levels.

2) Speaking of inflation… 2022 saw the worst start ever for bonds going back to 1926, down more than 10%. However, we’ve reset interest rates and bond returns to much healthier levels for investors going forward.

3) Looking at the stock side…through the end of June we saw the 5th worst start for stocks, out of 95 calendar years. However, history tells us that the first half of the year and the second half of the year are not correlated. In fact, in 7 out of the 9 worst starts to the calendar year, stocks have ended up much higher 12 months later.  

4) A big part of the story on the stock side is the volatility. If we look at the number of days that the market moved up or down by more than 2%; as of June 30th, 2022 has seen 14 down days and 12 up days, greater than 2%. Interestingly enough, the best and worst days in market history are often around the corner from each other. For example, in March of 2020 we had 3 of the worst days in stock market history – but we also had 5 of the best days in market history in the same month. Diversification is more important than ever and it’s important to remember that when we see volatility in the market, don’t let it derail your long-term financial plans.

5) Consumer satisfaction level is often a contrarian indicator for the market. History shows that if less than a 3rd of the country is satisfied, 1 year later stocks are up better than 15% on average. The opposite is true as well; whenever there is a lot of satisfaction, expectations are high and returns are lower.

Disclosure: The presentation on June 30th 2022 was meant for informational purposes only. The featured speaker is not affiliated with Gilbert & Cook, Inc. Gilbert & Cook, Inc. does not offer tax or legal advice. You should consult with an attorney for legal advice and a qualified tax professional for tax advice. Gilbert & Cook, Inc. is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client services agreement is in place.

Sources: Morningstar as of 6/30/22. U.S. bonds represented by the IA SBBI US Gov IT Index from 1/1/26 to 1/3/89 and the Bloomberg U.S. Agg Bond TR Index from 1/3/89 to 6/30/22. U.S. stocks are represented by the S&P 500 Index from 3/4/57 to 6/30/22 and the IA SBBI U.S. Lrg Stock Tr USD Index from 1/1/26 to 3/4/57, unmanaged indexes that are generally considered representative of the U.S. stock market during each given time period. Past performance does not guarantee or indicate future results. Index performance is for illustrative purposes only. You cannot invest directly in the index

2022 Mid-Year Update Event (Video)

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“History doesn’t repeat… but it often rhymes”.

On June 30th 2022, Gilbert & Cook hosted a mid-year update event, featuring BlackRock economist, Mark Peterson.

This event is meant for informational purposes only. The featured speaker is not affiliated with Gilbert & Cook, Inc. Gilbert & Cook, Inc. does not offer tax or legal advice. You should consult with an attorney for legal advice and a qualified tax professional for tax advice. Gilbert & Cook, Inc. is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client services agreement is in place.

G&C Employee Spotlight: Amy Mitchell

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Amy joined Gilbert &Cook, Inc. a year ago as our Director of Operations.

An organization that is near and dear to Amy, is Dobbers Up . The organization was created in 2007 to help support Dan Dowson & his family during his courageous battle with ALS. Dan lost his battle in 2009 but never lost his faith, humor, or giving spirit. Amy has been part of Dobbers Up since it's inception in 2007. She serves as a Board Member & Treasurer. Amy, along with several other volunteers, spend countless hours fundraising, organizing, and participating in the annual Dobbers Up Golf Tournament.

Amy believes the spirit & focused mission of Dobbers Up brings out the good in people, while providing support to families that have been "thrown a curveball in life".

On June 10th, Gilbert & Cook supported the 15th annual golf tournament for Dobbers Up. Since 2009, Dobbers Up has made contributions to local families who have been "thrown a curveball in life", totaling more than $100,000.

50 Growers Across America 2021 - CityWire RIA

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We are pleased to share that Gilbert & Cook has been named a 'runner-up' for the fastest growing Registered Investment Advisory firm in Iowa by Citywire's RIA magazine!

CityWire RIA has selected the fastest-growing firms in every state based on the previous years Form ADV data reported to the Securities and Exchange Commission at the time of publication. Read more about this honor on citywireusa.com

Your Year-End Financial Checklist

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Aspects of your financial life to review as the year draws to a close.

The end of the year can help remind us of last-minute things we need to address and the goals we want to pursue. To that end, here are some aspects of your financial life to think about as this year leads into the next. 

Keep in mind, this article is for informational purposes only. Make certain to contact a tax or legal professional before modifying your tax strategy.

Your Investments.

Set a goal to review your investments with your Advisor at your next meeting. Your Gilbert & Cook investment team will review your portfolio positions and asset allocation. Remember, asset allocation and diversification are approaches to help manage investment risk. They do not guarantee against investment loss.

Your Retirement Strategy.

You may want to consider contributing the maximum to your retirement accounts. It’s also a good idea to review any retirement accounts you may have through your work. This is also a great time to decide on making catch-up contributions if you are eligible. 

  • $19,500 for 401(k), 403(b), 457 (b) Roth 401(k); $6,500 catch-up provision for individuals 50 and over

  • $13,500 SIMPLE plans; $3,000 catch-up contribution for individuals 50 and over

  • $6,000 Roth IRA / IRA contribution; $1,000 catch-up contribution for individuals 50 and over

Your Tax Situation.

Consider checking in with your tax or legal professional before the year ends, especially if you have questions about an expense or deduction from this year. Also, it may be a good idea to review any sales of property as well as both realized and unrealized losses and gains. (1)  

Beginning in 2023 you will no longer be able to deduct your Federal Taxes paid from your Iowa State Tax Return. At the corporate level the Federal deduction gets eliminated starting in 2022. To take advantage of the allowable deduction on your 2021 tax return, please be sure to pay all federal tax estimates in 2021 as opposed to waiting until January of 2022 when estimates are due. 

Your Charitable Gifting Goals.

Plan charitable contributions or contributions to education accounts and make any desired cash gifts to family members. The annual federal gift tax exclusion allows you to give away up to $15,000 in 2021, meaning you can gift as much as $15,000 to as many individuals as you like this year. Such gifts do not count against the lifetime estate tax exemption amount, as long as they stay beneath the annual federal gift tax exclusion threshold. Besides outright gifts, you can explore creating and funding trusts on behalf of your family. The end of the year is also a good time to review any trusts you have in place. Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional who is familiar with the rules and regulations. (1,2) 

Note: If you are making Qualified Charitable Distributions (QCDs), make sure that you communicate that to your CPA so that it is reported on your taxes.

Your Life Insurance Coverage.

The end of the year is an excellent time to double-check that your policies and beneficiaries are up to date. Don’t forget to review premium costs and beneficiaries and think about whether your insurance needs have changed. Several factors could impact the cost and availability of life insurance, such as age, health, and the type of insurance purchased, as well as the amount purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, you may pay surrender charges, which could have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Finally, don’t forget that any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.

Life Events.

Here are some questions to ask yourself when evaluating any large life changes in the last year:

  • Did you happen to get married or divorced this year?

  • Did you move or change jobs?

  • Did you buy a home or business?

  • Was there a new addition to your family this year?

  • Did you receive an inheritance or a gift?

All these circumstances can have a financial impact on your life as well as the way you invest and plan for retirement and wind down your career or business.

As always, your Gilbert & Cook team is here for you. Please talk to your Advisor if you have any questions regarding your financial situation.

 

Citations

1. turbotax.intuit.com, October 16, 2021

2. irs.gov, October 14, 2021

CYBER SECURITY: Tips for Preventing Fraud

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From Charles Schwab Advisor Services:

Cybercrime and fraud are serious threats and constant vigilance is key. While my firm plays an important role in helping protect your assets, you can also take action to protect yourself and help secure your information. This checklist summarizes common cyber fraud tactics, along with tips and best practices. Many suggestions may be things you’re doing now, while others may be new. We also cover actions to take if you suspect that your personal information has been compromised. If you have questions, we’re here to help.

Cyber criminals exploit our increasing reliance on technology. Methods used to compromise a victim’s identity or login credentials – such as malware, phishing, and social engineering – are increasingly sophisticated and difficult to spot. A fraudster’s goal is to obtain information to access to your account and assets or sell your information for this purpose. Fortunately, criminals often take the path of least resistance. Following best practices and applying caution when sharing information or executing transactions makes a big difference. 

Let's Work Together to Protect Your Information & Assets

Safe practices for communicating with our firm:

  • Keep us informed regarding changes to your personal information.

  • Expect us to call you to confirm email requests to move money, trade, or change account information.

  • Establish a verbal password with our firm to confirm your identity, or request a video chat.

How Schwab Protects Your Account:

Schwab takes your security seriously and leverages protocols and policies to help protect your financial assets. Below are actions you can take to reinforce their efforts and resources to assist you in keeping your account safe:

  • Confirm your identity using Schwab’s voice ID service when calling the Schwab Alliance team for support.

  • Use two-factor authentication, which requires you to enter a unique code each time you access your Schwab accounts.

  • Review the Schwab Security Guarantee, which covers 100% of any losses in any of your Schwab accounts due to unauthorized activity.

To learn more, visit Schwab’s Client Learning Center.

 

What You Can Do

  • Be aware of suspicious phone calls, emails, and texts asking you to send money or disclose personal information. If a service rep calls you, hang up and call back using a known phone number.

  • Never share sensitive information or conduct business via email, as accounts are often compromised.

  • Beware of phishing and malicious links. Urgent-sounding, legitimate-looking emails are intended to tempt you to accidentally disclose personal information or install malware.

  • Don’t open links or attachments from unknown sources. Enter the web address in your browser.

  • Check your email and account statements regularly for suspicious activity.

  • Never enter confidential information in public areas. Assume someone is always watching.

Exercise caution when moving money.

  • Leverage our electronic authorization tool to verify requests. Featuring built-in safeguards, this is the fastest and most secure way to move money.

  • Review and verbally confirm all disbursement request details thoroughly before providing your approval, especially when sending funds to another country. Never trust wire instructions received via email.

Adhere to strong password principles.

  • Don’t use personal information as part of your login ID or password and don’t share login credentials.

  • Create a unique, complex password for each website, Change it every six months. Consider using a password manager to simplify this process.

Maintain updated technology.

  • Keep your web browser, operating system, antivirus, and anti-spyware updated, and activate the firewall.

  • Do not use free/found USB devices. They may be infected with malware.

  • Check security settings on your applications and web browser. Make sure they’re strong.

  • Turn off Bluetooth when it’s not needed.

  • Dispose of old hardware safely by performing a factory reset or removing and destroying all storage data devices.

Use caution on websites and social media.

  • Be cautious when accepting “friend” requests on social media, liking posts, or following links.

  • Limit sharing information on social media sites. Assume fraudsters can see everything, even if you have safeguards.

  • Do not visit websites you don’t know, (e.g., advertised on pop-up ads and banners).

  • Log out completely to terminate access when exiting all websites.

  • Don’t use public computers or free Wi-Fi. Use a personal Wi-Fi hotspot or a Virtual Private Network (VPN).

  • Hover over questionable links to reveal the URL before clicking. Secure websites start with “https,” not “http.”

 

What to do if You Suspect a Breach

  • Call your Advisor or service team so that they can watch for suspicious activity on your accounts and collaborate with you on other steps to take.

Learn more

Visit these sites for more information and best practices:

2021 Mid Year Update - Event Recap

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On Wednesday, July 14th 2021, Gilbert & Cook Private Wealth Management welcomed guests to a timely discussion on the economy and recent updates in various financial planning topics and considerations. Gilbert & Cook Founder & Advisor, Linda Cook, moderates a panel of professionals as they discuss the 2021 economic outlook, the current state of the market and current event topics and considerations within the financial planning industry.

QUESTIONS & ANSWERS

Q&A - When does inflation become important to our economic outlook?

Answered by Gilbert & Cook's Chief Investment Strategist, Chris Cook, CPA, CFA

Q&A - How do we look behind the headlines when it comes to politics and corporate tax rate?

Answered by Gilbert & Cook's Chief Investment Strategist, Chris Cook, CPA, CFA

Q&A - How do we separate facts from fiction?

Answered by Gilbert & Cook’s Chief Investment Strategist, Chris Cook, CPA, CFA

Q&A - What is your opinion on the mortgage rates? Are they here to stay?

Answered by Gilbert & Cook's Chief Investment Officer, Brandon Grimm, MBA, CFA.

Q&A - When is our federal deficit going to overwhelm our economy?

Answered by Gilbert & Cook’s Chief Investment Strategist, Chris Cook, CPA, CFA

Disclosure: This event is meant for informational purposes only. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Gilbert & Cook, Inc. does not offer tax or legal advice. You should consult with an attorney for legal advice and a qualified tax professional for tax advice. Gilbert & Cook, Inc. is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Gilbert & Cook, Inc. and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gilbert & Cook, Inc. unless a client services agreement is in place.

New Service Offering! Gilbert & Cook Presents, Retirement Plan Solutions

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Create a Comprehensive Retirement Plan for Your Business & Your Team.

No one knows your business like you do. However, there are elements to running a successful business, that have little to do with the core business you’re managing - but are still critically important to your overall long-term success.

Your company retirement plan is a perfect example.

You know you need excellent benefits in order to attract, reward and retain exceptional employees. You know that you need to keep these benefits costs reasonable and under control. You also know that you don’t want the complexities of monitoring this program taking up your valuable work time.

The Gilbert & Cook team has developed a comprehensive process, built around bringing clarity to the many choices you face and providing you with confidence in making financial decisions for your business and the individuals and families you support.

Led by Retirement Advisors, Jerit Tripp & Jarret Sheets, Gilbert & Cook’s Retirement Plan Services provide businesses with customized suite of services to contribute to the success of your company’s retirement plan.

Contact a Gilbert & Cook Advisor today, to get a complimentary Second Opinion on your situation.

Tax Filing Season is a Little Later This Year

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What to know and dates to remember.

Recently, the Internal Revenue Service (I.R.S.) announced that tax season will start a little later than usual. This year the I.R.S. will begin accepting and processing 2020 individual tax returns on Friday, February 12, 2021. (1)

In light of the December 27 tax law changes which brought a second round of Economic Impact Payments and other benefits to many, the I.R.S. will use this additional time to update, program, and test their systems. (1)

However, if you intend to work with a tax professional or use tax software, there's no need to wait. If you prepare your return now, not only will you have your taxes done and out of the way, but your filings can be transmitted to the I.R.S. starting February 12. (1)

Even with this new date in mind, your deadline to file is still April 15. To request an extension, make sure you do so by April 15. This may grant you until October 15 to file your 2020 tax returns. However, this is an extension for filing only. The I.R.S. still requires you to pay any taxes due by the original filing date of April 15. (1)

Filing one’s tax returns can be a complicated and sometimes daunting process. If you have questions regarding your personal situation, please consult your CPA or a licensed tax professional.

Want More? Click here to download a “2021 Tax Guide” to help prepare for the upcoming tax season.

1 - IRS.gov, January 15, 2021

Disclosure: Gilbert & Cook, Inc. does not provide tax or legal advice. For advice regarding your individual tax situation please consult with a licensed tax professional.

2021 is Off to a Fast Start!

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Economic Update - written January 25th 2021

Ready… Set… Go!

The stock market’s first hurdle of the New Year was to assess the runoff elections happening for the two Senate seats in Georgia. A special election such as this has only happened a handful of other times in our nation’s history, so the market appeared anxious about the process.

The market’s second hurdle was the electoral college count that would confirm Joe Biden as the 46th president of the United States. A protest during the vote count unnerved investors, and most of the New Year’s rally was undone. However, just one day later the market climbed higher as traders looked past the unrest.

Stocks Scale New Heights

Midway into the 1st month of the new year stocks rallied. Testimony from incoming Treasury Secretary Janet Yellen raised hopes for a new round of federal spending when she suggested to the Senate Finance Committee that lawmakers should “act big” on fiscal stimulus.

An orderly presidential transition and the anticipation of a more effective vaccine distribution plan contributed to stocks touching multiple new highs this month. Investor enthusiasm was further supported by a strong start to the fourth-quarter earnings season.

What does this fast-paced market activity mean for investors?

There will always be a lot of noise. But remember, making a change to your portfolio should be driven by sound analysis and preparation. Reacting impulsively to market volatility can compromise the return of your portfolio and your overall financial plan. As Advisors we have come to expect the volatility that comes along with investing and have anticipated these trends as we developed your overall financial strategy.

If you have any questions about your personal financial situation, please reach out to a member of your Gilbert & Cook Abundance Team.

Economic Update - 12/24/20

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A rollout for a COVID-19 vaccine led to a positive reaction from the markets, and stimulus talks continue.

YEAR-END ECONOMIC STIMULUS BILL

On Monday, December 21st, congress passed legislation which offers a wide range of help, both for individuals and for struggling elements of the economy - including direct payments, enhanced unemployment benefits and tax breaks. Here are a few highlights of what’s inside the massive year-end compromise:

$166 billion in direct checks - Individuals making up to $75,000 a year will receive a payment of $600, while couples making up to $150,000 will receive $1,200, in addition to $600 per child.

$120 billion in extra unemployment help - Jobless workers will get an extra $300 per week in federal cash through March 14.

$325 billion small business boost - Pandemic-ravaged small businesses would see a total of $325 billion, including $284 billion in loans through the Paycheck Protection Program, $20 billion for businesses in low-income communities and $15 billion for struggling live venues, movie theaters and museums.

Tax Benefits - The legislation allows businesses to deduct expenses associated with their forgiven PPP loans, in addition to expanding the employee retention credit intended to prevent layoffs. The package rolls over a variety of temporary tax breaks known as “extenders” - some for multiple years. It also extends a payroll tax subsidy for employers offering workers paid sick leave and boosts the Earned Income Tax Credit.

 

WALL STREET

Stocks climbed higher amid the COVID-19 vaccine rollout and an improving outlook after a fiscal stimulus bill.

The Dow Jones Industrial Average, which has lagged all year, gained 0.44%. The Standard & Poor’s 500 picked up 1.25% while the Nasdaq Composite index surged 3.05%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 2.44%. (1,2,3) 

 

STOCKS CLIMB HIGHER

In a week that celebrated the national rollout of a COVID-19 vaccine, market enthusiasm was tempered by worries of infection caseload and fresh economic lockdowns.

Investors turned their focus to the fiscal stimulus negotiations in Washington, D.C., with the hope that a relief bill may be the bridge that gets the economy over its near-term troubles until vaccine distribution grows more widespread.

These negotiations were not smooth sailing. When a compromise bill appeared to gather support, markets quickly moved higher, with the Dow Jones Industrial Average, S&P 500, and NASDAQ Composite all setting new record high closes on Thursday. (4) Stocks slipped in the final day of trading as stimulus hopes wavered. 

 

FED OUTLOOK ON THE ECONOMY IMPROVES

The Federal Reserve on Wednesday concluded its last meeting of the Federal Open Market Committee for 2020. Fed officials provided more detail for its monthly bond purchase program and reiterated their commitment to a monthly purchase of $120 billion of Treasury and mortgage-back securities until its inflation and employment goals are met. (5) 

The Federal Reserve also raised its outlook on the U.S. economy. It revised its September forecast of a 3.7% decline in GDP in 2020 to a 2.4% decline, and increased its 2021 GDP growth forecast from 4.0% to 4.2%. It also expects unemployment at 2020 year-end would fall to 6.7%, substantially lower than its earlier estimate of 7.6%. (6) 

CITATIONS:

1. The Wall Street Journal, December 18, 2020

2. The Wall Street Journal, December 18, 2020

3. The Wall Street Journal, December 18, 2020

4. CNBC, December 17, 2020

5. The Wall Street Journal, December 16, 2020

6. CNBC, December 16,2020

Advice for Managing Your Portfolio in 2021

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By: Chris Cook, CPA, CFA
Gilbert & Cook, Chief Investment Strategist

My advice for managing your portfolio in 2021 is a lot like my advice was in 2002 and 2009.  And no, I am NOT going to tell you to “stay the course”.  I am going to advise that you CHART the course under the calmest of mindset that you can conjure up amid elections and Covid.

Periods of stress change our thinking.  Human beings change their mind, second guess, feel regret, and feel blame.  So, on a Sunday afternoon, with no screens going and no markets open, set a 10-year course you can stay true to.  Balance your 10+ year optimism, (and yes you should have some) with your near-term needs.  Two main reasons individual investors fail in times of extreme pessimism as well as extreme optimism is the extrapolation of current events into the future.  Things will be bad/good forever.  We do not want to be a forced seller or lose our nerve at the bottom of the market in March of 2020.  This period of stress, like those before it, has retaught those lessons.

If you have any questions regarding your personal financial situation, please don't hesitate to call a member of our Gilbert & Cook team at 515.270.6444 or email info@gilbertcook.com

Election 2020 - A Dose of Patience

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The upcoming election is prompting some people to reconsider their investment strategy. But if history is any guide, patience may be the answer.

For the past 12 presidential elections, the Standard & Poor’s 500 index has notched a 4% gain, on average, in the 90 days after the election. (1) 

Of course, past performance does not guarantee results. And there have been some notable exceptions to the trend. In 2008, for example, the S&P 500 dropped more than 10% in the three months following the election as the global financial crisis gripped the markets. And in 2000, the S&P 500 fell 4.1% from election day until December 12, when the Supreme Court ruled on the election between George Bush and Al Gore. (1) 

Investing involves risks, and your goals, time horizon, and risk tolerance should be what drives any changes to your portfolio strategy. If you’re concerned that the upcoming election may change one of these critical factors, perhaps it's time to review your investment approach.

Regardless of who sits in the white house – business marches to it’s own drummer. Throughout history it has been better to be invested in the optimism of what is going to be created in 5, 10 and 20 years, and not who the president is going to be for the next 4.

In the news and in our social circles we are constantly being told how much we should care about the impact elections are going to have on business . The impact will be there to some extent - sentiment may shift, tax policy may shift, trade policy may shift. But in the long run US ingenuity, entrepreneurship, and the sheer force of creative people getting up and going to work everyday, that’s what’s going to push us forward.

Now is a good time to reflect on a quote from legendary investor Warren Buffett, who reminds us, “The stock market is a device for transferring money from the impatient to the patient.”

 

Citations

1. HartfordFunds, 2020

Two Factors Leading to a Recovery (Clip from our recent virtual event)

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TWO FACTORS LEADING TO A RECOVERY

1) Governmental Decisions.

2) Consumer Behavior.

In case you missed it! Here's a clip from our recent virtual event: Elections, Trade and Economy - in our "New Normal". Nationally acclaimed economist, Dr. Chris Kuehl discusses the lasting impact to our current recession and the 2 Factors leading to a recovery.

New to Gilbert & Cook!

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PHOTOGRAPHED FROM LEFT TO RIGHT: Lisa McCubbin - Relationship Manager & Jessi Swaim, CFP® - Associate Advisor

PHOTOGRAPHED FROM LEFT TO RIGHT: Lisa McCubbin - Relationship Manager & Jessi Swaim, CFP® - Associate Advisor

We are pleased to announce that Lisa McCubbin and Jessi Swaim have joined our Gilbert & Cook family!

Introducing Lisa McCubbin

In the role of Relationship Manager, Lisa serves as a direct contact for her clients to answer questions, while conducting client specific tasks and assisting the Advisor in helping clients and families achieve their goals.

Prior to joining Gilbert & Cook, Lisa worked in the financial services industry, both managing and supporting long-standing client relationships.

Lisa and her husband, Marc, live in Windsor Heights and enjoy spending time with their grandkids.

Introducing Jessi Swaim, CFP®

As an Associate Advisor, Jessi works alongside the Lead Advisor to help her clients and their families meet their financial goals.

Prior to joining our team, Jessi was a Financial Planner in the Des Moines area and obtained the Certified Financial Planner designation in 2017.

Jessi graduated from the University of South Carolina and played Varsity soccer. Active in her community, Jessi is formerly a Board Member of the National Association of Insurance & Financial Advisors - Iowa.

Jessi and her dog, Jada, live in West Des Moines. In her free time, she enjoys being outdoors, watching sports and spending time with friends.

Q&A: Value vs. Growth Stocks, from a Value Manager Perspective

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Below is an excerpt from our recent webinar, "Value vs. Growth", originally aired on September, 22nd 2020 - featuring Metin Akyol, Ph.D, CFA, Data Scientist at Zacks Investment Management.

Did you miss the original video? Click here to watch.

Historically, the average investor significantly underperforms the market – Why?

The reason investors tend to underperform is simple: the average investor works without a disciplined system, and he/she allows emotions or behavioral biases to drive investment decisions.

Sometimes investors become overconfident and misjudge risk. Other times they latch onto a price target or think they have identified a pattern that isn’t there. Whatever the case, the emotional decisions that result often lead to suboptimal investment outcomes. This is often referred to as the “behavior gap,” which can be catastrophic to retirement planning.

How to we overcome our investor biases?

Stay the course! Trying to time the market, means increasing the probability that you won’t be invested on big “up” days. And if stock market history tells us anything, it’s that there are a lot of up days.

With that stretch in outperformance in Growth/Technology stocks, are Value Managers stretching their parameters a little bit, in where they go hunting for their value names?

Zack’s Investment Management has not changed it’s parameters and will stay true to their process. Particularly in their dividend strategy, they are not changing their process because volatility and exposure pullback is expected.

Is there anything that you see in the overall evaluation of the market that would lead you to a more muted expected return over the next 5-10 years?

Not necessarily. History shows us that in the long-run, value stocks typically outperform growth stocks, because they are cheaper and stand the test of time. Recently however, the Growth space has taken off due to the overall dominance of the technology sector.

It is important to remember, when you are looking into performance, that it’s not just a difference of “Value vs. Growth” approach, but also a matter of which stocks are overly represented in each classification.

“Value” stocks are represented heavily in the energy and financial sector.

“Growth” space consists of an over-weight of technology businesses. Lately, the overall dominance of the tech sector drives a lot of what we’re seeing in growth.

Ultimately, we are expecting a convergence in the long-run of the growth and value sectors, due to an increased adaption of technology in the other sectors.

We have seen this before and the important thing to remember is that, in the long-run, short-term performance is not a reliable predictor for what you expect in the future. Instead, rely on the long-term investment plan your Advisor has put in place.

Understanding Social Security Benefits

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When planning for your financial future, decisions around claiming Social Security benefits can be one of the most important financial considerations. We often hear questions from clients, and prospective clients alike, regarding their Social Security benefits.

When’s the best time to take my benefit?

Should I take it as early as possible or wait until I’m 70?

First, let's review how Social Security came to be, how we make decisions with clients on their Social Security benefit, and look into the future for the Social Security program as a whole.

In 1935, the Social Security Act was signed into law. This program was created in response to the Great Depression and providing some sort of an income stream to retired workers 65 and older. It should be noted that the life expectancy at birth in 1930 was only 58 for men and 62 for women. Increases in life expectancy are a factor in the long-range financing of Social Security; but other factors, such as the sheer size of the "baby boom" generation, and the relative proportion of workers to beneficiaries, are larger determinants of Social Security's future financial condition.

Here's a look at how life expectancy has changed over the years and how it originally impacted the development of the Social Security Act.

Over the years, there have been various amendments that have transformed the program into what it is today. Changes such as added benefits for spouses and minor children, benefits for disabled individuals, cost of living adjustments on payments, and the creation of Medicare in 1965. Today, one in seven Americans receive some form of Social Security, and when looking towards the retirement benefit specifically, it’s not inconceivable for individuals to receive a benefit for 20-plus years in retirement.

As we discuss Social Security benefits with our clients, there’s much more to the conversation than originally meets the eye. We begin by sitting down and getting a better understanding of their overall situation, including retirement goals and any additional thoughts and concerns.

We walk through various topics such as:

  • What benefits are they entitled to (personal, spousal or ex-spousal, etc.)

  • Family medical history and their own personal health situation

  • Their investment accounts and assets

  • Their income sources in retirement such as pensions and employment income (if someone decides to work while receiving benefits, we discuss how benefits may be reduced because of income)

  • Spending desires/needs in retirement.

Considering the specific situation of each individual, we can begin to analyze the optimal time to begin receiving their benefit. We ultimately visit with the client to find the Social Security strategy they’re most comfortable with and walk them through what they can expect with their payments (tax withholdings, Medicare premiums, etc.).

Will the Social Security program last until I retire?

One concern we hear from younger clients is regarding the program’s longevity and the benefits they’ll receive. With the number of retiree’s claiming their benefits rising and fewer people paying into the program, we certainly understand, but do want to reduce some of that concern.

As of right now, the Social Security Board of Trustees projects that due to increasing costs, by 2037 the program’s cash reserves will be depleted and payroll taxes will only be able to cover 75% of the scheduled benefits going forward. With this in mind, we do see changes coming for Social Security and feel those changes will mirror those made back in the 1980s: increasing the retirement age for individuals born after a certain age, changes to the payroll tax rate, and slightly reduced benefits. As we move into the future, this is certainly something we will continuously monitor and work to navigate through together with clients.

If you have any questions regarding your personal financial situation, please don't hesitate to call a member of our Gilbert & Cook team at 515.270.6444 or email info@gilbertcook.com