financial planning

While no one knows what this decade will bring, we might look to history for some insight. One hundred years ago, America was reeling from the Spanish Flu and uncertain economic prospects. At the time, many may have been pessimistic, but then we entered the Roaring 20’s. While there is much uncertainty now, we may emerge from this crisis into a period of new opportunities, much like the 1920s. We could be entering the Roaring 20’s, round 2.

From Crisis to Opportunity – Then and Now

We think of the Roaring ’20s as a carefree, prosperous time, but the events leading up to it were worse than now. The Spanish Flu claimed about 675,000 lives in America,[1] many American soldiers fought and died in World War I, and about a year after the war, there was a short depression. The Dow Jones dropped 32% in 1920 before rising for almost a decade. As we’ve started to emerge from the COVID-19 pandemic and its economic consequences, we’ve seen market rallies, businesses reopening, and increasing employment. The New York Federal Reserve’s May report already shows an increase in consumer confidence. Consumers were reportedly more optimistic about the job market and earnings growth, ending a three-month-long decline in confidence.[2]

Entering a New Age

In the 1920s, the automobile and the airplane changed travel forever, and washing machines, vacuum cleaners, and radios changed homes forever. New technologies can change our world, and this has financial consequences. When entering a new age, it helps to bring wisdom from the past and an eye for new opportunities. You may need to review your portfolio after recent market ups and downs, especially if you are nearing or in retirement. A financial advisor can help you create an investment plan for retirement that takes your risk tolerance and income needs into account, while working to take advantage of growth opportunities.

A Long-Term View

There will always be recoveries as long as there are market drops. Over time, the market goes up, with periods of volatility and downturn along the way. A major rebound could happen in a single day, making the probability of missing it high if you only follow a timing the market strategy. Consider the findings of a study on what would happen to a hypothetical $10,000 investment into an S&P 500 index fund from 1980 to 2018.[3] Staying invested throughout the entire time period resulted in hypothetical gains of $708,143. But, missing the five best days of the market resulted in 35% lower gains ($458,476), and missing the best ten days in the 38-year period resulted in gains of only $341,484. An investment plan that takes these facts and your risk tolerance into account is one important strategy for creating a solid retirement plan.

By thinking long-term and looking for opportunities, you can aim to make the most of this decade. We’re here for complimentary financial reviews so we can discuss your financial concerns and a potential plan of action. No one knows what opportunities this decade might bring, but you can choose to be open to them.

[1] https://www.cdc.gov/flu/pandemic-resources/1918-pandemic-h1n1.html

[2] https://www.wsj.com/articles/consumers-more-optimistic-about-economys-future-in-may-new-york-fed-says-11591628426

[3] https://www.fidelity.com/viewpoints/investing-ideas/six-tips

The commentary on this blog reflects the personal opinions, viewpoints and analyses of BML Wealth Management’s employees providing such comments, and should not be regarded as a description of advisory services provided by Cooper Financial Group. The views reflected in the commentary are subject to change at any time without notice. Nothing on this blog constitutes investment advice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future returns.

Investment Advisory services are offered through Cooper Financial Group, an SEC Registered Investment Advisory firm. All Insurance Services are offered through BML Wealth & Insurance Services. California Insurance License #0M15550. BML Wealth Management & Cooper Financial Group are not affiliated.

We do not provide tax or legal advice, all individuals are encouraged to seek guidance from qualified professionals regarding their personal situation. Any references to protection benefits or steady and reliable income streams in this guide refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by insurance company. Annuities are not FDIC insured. Indices mentioned are unmanaged and cannot be invested into directly.

 


The commentary on this blog reflects the personal opinions, viewpoints, and analyses of BML Wealth Management’s employees providing such comments and should not be regarded as a description of advisory services provided by West Wealth Group, LLC. The views reflected in the commentary are subject to change at any time without notice. Nothing on this blog constitutes investment advice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future returns.

Investment advisory services through West Wealth Group, LLC, an SEC Registered Investment Adviser. BML Wealth Management and West Wealth Group, LLC are affiliated entities. Insurance Services are offered through BML Wealth & Insurance Services, California Insurance License #0M15550.

We do not provide tax or legal advice. All individuals are encouraged to seek guidance from qualified professionals regarding their personal situation. Any references to protection benefits or steady and reliable income streams in this guide refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products.