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Much to be Grateful For

This month, we give thanks for such good markets, but more importantly, our families and clients. Since we are entering the season when families get together, we offer some thought on important conversations we may want and need to have with our loved ones. Last but hardly least, we thank all of you for being great to work with.

Grateful for Good Markets

We certainly have much to be thankful for financially this year. While stock market returns have been gangbusters, the bond markets have also outperformed historical averages. This means conservative investors have enjoyed great returns, too:

Table 1: Key Index Returns

  MTD% YTD %
Dow Jones Industrial Average 0.48 15.94
NASDAQ Composite 3.66 24.97
S&P 500 Index 2.04 21.17
Russell 2000 Index 2.57 15.96
MSCI World ex-USA* 3.13 14.15
MSCI Emerging Markets* 4.09 7.89
Bloomberg Barclays US

Aggregate Bond TR

0.30 8.85

Source: Wall Street Journal,, Morningstar, MarketWatch

MTD: returns: Sep 30, 2019-Oct 31, 2019

YTD returns: Dec 31, 2018-Oct 31, 2019

*in US dollars

And it’s not just this year the markets have blessed us. The bull market began in March 2009, about three months before the Great Recession ended, according to the National Bureau of Economic Research—the official arbiter of recessions and expansions.

Since touching bottom, the S&P 500 Index has advanced 349% over the period (St. Louis Federal Reserve S&P 500 data). It has been an impressive run.

Yet, we know that markets never move in a straight line. Roughly speaking, the broad-based index of 500 large U.S. companies moved ahead for about two years—through early 2011. What followed was a period of volatility and little upward movement for about 18 months.

The bull market resumed in 2013 and ran nearly two years. That period was followed by two years of volatility.

The third leg began after the last presidential election and concluded in early 2018. Although the S&P 500 Index and the NASDAQ Composite closed at new highs on November 1, I recognize we’ve been in a holding pattern that included a sell-off of nearly 20%.

Put another way, we have experienced three upward thrusts followed by three periods of consolidation.

The next question that always arises—are we set to move into a fourth leg of the bull market?

Economic fundamentals—corporate profits, economic activity and Federal Reserve policy—are the medium- and longer-term driver of stock prices. Driven by an expanding economy and rising profits, stock buybacks over the last 10 years have also provided support.

More recently, trade tensions between the U.S. and China have hampered equities. We saw it late last year. We saw it again in May and in August.

Tensions began to recede in September, which lent support to the broader market. In October, negotiations between the two economic superpowers concluded an agreement that covers technology, agriculture, and financial services.

The details of Phase 1, as it has been called, are still being hammered out. It’s not the all-encompassing deal that we hoped might be achieved early in the year, but it’s progress, and it’s helped remove a headwind that has enabled stocks to move to new highs.

Moreover, the economy is expanding, albeit at a more moderate pace than a year ago. While the Federal Reserve hinted that we’re unlikely to see another rate cut this year, policy makers have little inclination to begin raising interest rates anytime soon.

While new highs are welcome, let’s not discount the potential for more volatility. A new round of tariffs slated for December is still on the table, and global growth remains an issue.

Still, new highs once again seem to confirm the old adage, “Bull markets climb a wall of worry.”

Important Family Financial Discussions

We’ve all heard it—never discuss religion and politics. It’s easy to understand why. Some folks hold very strong opinions, and it’s easy to get swept up into an unwinnable argument.

Interestingly enough, though, politics and religion aren’t considered the most difficult subjects to tackle, according to a 2014 study: Wells Fargo.

Notably, the study found that personal finances (44%) ranked ahead of both politics (35%) and religion (32%).

In case you were curious, death came in at 38%, taxes at 21%, and personal health at 20%.

Not surprisingly, the study shows that 71% of adults learned the importance of saving from their parents. Yet, barely more than one-third of today’s parents report discussing the importance of saving money with their children frequently.

Sadly, about a third have a hard time discussing money with their spouse or partner, and 25% often end up in heated discussions.

But it doesn’t have to be that way. This month, I’ve put together an outline you may use as a guide for getting through these conversations cooperatively.

Money Talk with your Spouse

When discussing financial matters with your spouse, it’s important that you find shared ground. Otherwise, you’ll be working toward different goals, and the risk of failure and frustration is high.

In a roundabout way, let me provide you with an example. I know a couple that’s been married almost 10 years. Each year, they come up with a word or an area of focus.

In their first year, they came up with two goals— ‘fun’ and ‘debt reduction.’ Rick told me their first year of marriage was a blast. You could see it in his body language; you could see it in his eyes as he shared his experiences. He and his wife created lasting memories. They never turned down invitations with friends.

Moneywise, they squashed over $20,000 in debt. As their life together has progressed, goals have changed. Today, they have two young kids, and they continue to keep the lines of communication open.

What might be the best way to talk about money with your spouse? Go on a date—a money date. Get out of the house, get away from distractions, and leave the kids with a babysitter. Here’s where you’ll discuss goals and craft a plan. Nothing is off limits. You may discuss retirement savings, large purchases, debt reduction, a down payment on a new home, or bolstering your savings.

Yet, don’t overindulge. It’s one step at a time. Retirement savings may be the first topic. Or getting out from under credit card debt may be your first challenge.

Come up with realistic goals together and check in on a regular basis. When you’ve accomplished various goals, reward yourself.

Talking with Aging Parents

Many parents rarely discuss their finances with their children. Their parents didn’t share details, and they don’t feel obliged to break with family tradition.

Surveys bear this out. According to [[ GoBankingRates]], 73% of Americans haven’t had this discussion with Mom and Dad. The survey found that respondents ages 45-54 were the most likely to say that they haven’t broached the subject because they are not comfortable with the topic.

That’s understandable. Besides, many don’t know how to begin the conversation.

So, here are some tips to help you get the conversation started with your parents:

  1. Express genuine concern. You care about what’s going on with your parents, and it extends beyond their financial situation. While money matters may seem difficult to explore, let them know you are having the discussion because you love them and want to be sure they are being taken care of as they age. They may be open to talking or they may take time to process your invitation.
  2. Tell parents “My financial advisor made me do it.” One way to jumpstart the conversation is to point the finger at us, or another trusted advisor like your lawyer or CPA. “I was talking to my financial advisor the other day, and he said we should have a talk.” Or, “I was reading my newsletter from my advisor, and she emphasized the importance of having a conversation about finances with you.” Leveraging our credibility, or the credibility of another trusted advisor, can go a long way in opening doors.
  3. Elder fraud may be on their minds. Not comfortable jumping in? Scams that target the elderly (and for that matter, all of us) have exploded. None of us want our parents to become victims because there is little we can do to undo the damage. Money lost will never be money recovered. Expressing genuine concern by sharing articles on elder fraud is a good way to ease into the subject.
  4. Give an example. If you believe the situation is appropriate, you may talk about a friend or acquaintance whose lack of planning negatively impacted the family. Piggybacking on the point above, you might bring up how elder fraud affected a friend or neighbor. Or, you may have read about someone who was an unfortunate victim. Such scams hit home because we see ourselves or close family members as potential victims.
  5. Discuss your own experiences. Open up to Mom and Dad about your retirement planning, 401k decisions, debt payoffs, or student loans. Or, casually mention the new life insurance policy you have taken out. You know, just in case something happens. Your spouse knows about the policy. However, if you are single and the proceeds will help pay for your funeral and assist your kids, it’s important that your folks know you have insurance. When you share something that is personal to you, your parents may become more willing to open up about themselves.
  6. Focus estate planning on their priorities. Stay away from who gets what. Make this about them, not you. The goal is setting up the will or trust. Emphasize they can do what they want with their assets. If it’s something they haven’t done, checking the ‘estate-planning’ box will lift a burden that’s likely been simmering in the back of their minds.
  7. Make things easier. Have you thought about helping your parents with a budget, paying the bills, online banking, or helping with credit? Simply getting your parents to tidy up loose ends can pay huge dividends for them.

Remember, we are here to assist you. Meeting in a neutral territory, such as our office, can help keep the lines between personal matters and finances from blurring. We know these conversations can be difficult and awkward. If we can help you, please let us know. We’re simply an email or phone call away.

Thanks to all of You

Voicing our gratitude must include all of you. We value each and every client relationship. We enjoy making progress with you toward your financial goals, and appreciate all the referrals you have sent us.

As usual, we will be contributing 10% of profits to the NAPFA Consumer Education Foundation. Many of you found me through NAPFA, and this is a way to pay it forward. For more on their mission, please see

May you all have a blessed holiday season!