Spring client newsletter

Greetings and Welcome to the 2nd Quarter and Spring of 2017

We wanted to provide you with some relevant information that you may find interesting regarding Mortgage Rates at historically low levels, an update on the economy as it relates to your financial investments, and the upcoming tax filing deadline of April 18th.

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In 2016, Plan for Success

Everyone has financial dreams—like being debt-free, retiring on our own terms, owning a beach house or paying for our kids' education without breaking the bank.

To turn those dreams into reality, financial planning is indispensable. Simply having a plan can instill confidence and erase uncertainties. In a recent survey from polling firm Harris Interactive, 88% of those with comprehensive financial plans reported feeling that they have a clear financial direction. That number is almost 50% higher than those without a professional financial plan.

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Balancing Risk and Reward in the Market

Many investors look at investing as a kind of horse race: To "win," the logic goes, you must beat the market.

While measuring performance against a market index such as the S&P 500 may be a simple way to gauge success, in the long run it may be harmful to your investing results. To understand why, let's look at the concept of risk-adjusted return.

Risk-adjusted return can be defined as the measure of how much risk an investor has taken on to achieve their earnings. Let's say two mutual funds post identical 10% returns. The less aggressive, less risky of these funds would be said to have the better risk-adjusted return.

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Social Security Change: What You Should Know

Maximizing your Social Security benefits: It's been an increasingly popular topic with those approaching retirement.

With "advanced" claiming strategies, couples have found a number of ways to increase their benefits, all while complying with Social Security rules. But one of these strategies will soon be no more.

Early this month, the "file and suspend" strategy was eliminated, as part of the newly passed budget. If you're not familiar with file and suspend, here are the basics: The strategy allows couples—typically where there is a higher-earning spouse and a lower-earning spouse—to squeeze the greatest benefit amount from the program.

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The Value of Risk-Adjusted Returns

Many investors, amateur and professionals alike, treat investing as if it's a contest.

In this approach, the winner is the investor who is beating the market. The rest are losers. But if you're a long-term investor, focusing on the market as a benchmark to beat is a mistake.

That's because successful investors aren't focused on the horse race. Just as important to them as returns is avoiding big losses. It's those big losses, after all, that can shrink your capital base and put your long-term goals out of reach.

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The Biggest Risk to Your Portfolio

There's a big risk to your portfolio right now—but it's not the stock market's volatility. It's your behavior.

During periods of market turbulence like the present one, investors are at special risk of making emotion-based decisions. Spooked by a big drop in the stock-market indexes, they sell to protect their remaining capital. Later, seeing a big rebound unfolding, they jump back in to avoid missing the gravy train.

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Understanding the Rate Hike

For months, there’s been talk of the Federal Reserve raising interest rates, and some market commentators have been stirring up fears about how that may impact investors.

At Acorn Wealth Advisors, we believe long-term investors have little to fear from rising rates. Let’s take a step back and look at why, starting with why the Federal Reserve wants to raise rates.

A fundamental part of the Fed’s job is to help the economy to grow and create jobs. (The other principal duty of the Fed is keeping inflation under control.)

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The Lessons of Greece

A few weeks ago, debt-burdened Greece reached a tentative bailout deal with creditors to save itself from economic collapse—at least for now.

With the deal, the country of 11 million has a lifeline for the next three years, and the threat of it leaving the euro has been at least temporarily defused.

But the Greek drama ended up hurting many U.S. investors. Or more precisely, it spurred them to inflict damage on their own investment portfolios. In the volatile weeks and months leading up to the bailout, countless investors made emotion-based decisions to buy or sell.

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The Value of Financial Advice

Many individuals and families seek out financial guidance as they accumulate wealth and their finances become more complex. Simply put, they want to be confident that they're stewarding their wealth wisely.

But is it possible to quantify the benefit of working with a good advisor? The answer, according to independent researchers, is yes. Morningstar has found that working with the right advisor can result in an additional 1.82% per year in additional retirement income.

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Should You Sell in May and Go Away?

The investing world is full of old saws, supposed rules of thumb for making a pile of money.

  • “Buy the rumor, sell the news.”
  • “Don’t fight the Fed.”
  • “Sell in May and go away.”

This time of year, you may be seeing articles championing that last axiom. But as with many of these pat rules, its logic doesn’t survive close scrutiny.

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