Author Archive
Timely Thoughts from Evan and Dale
“What’s the market going to do?” “Why is it going down?” “What is making money?’ “Its up 500 points, should we be buying?” “Its down, should we be selling?”
All of these are legitimate questions we have always received but recently the questions have turned more aggressively rhetorical with some clients.
Dale and I have been working with clients for over 25 years. Never in those 25 years have we experienced the rapid back and forth on a minute by minute, hour by hour and day by day basis. For many months now we have seen the markets and almost every sector within these markets sell off. We have had days where we start down 1-5% only to turn around for no reason, or the inverse. We have had days where everything looks great and we rally, only to give it all back within minutes or the next day. It is never enjoyable to lose wealth, even if it is temporary or if its giving back some gains. The toll this volatility is taking on our clients, our team and ourselves is reaching unprecedented levels. Some days it feels like we are capitulating, a term that references when most people are throwing in the towel and selling anything not nailed down. Other days, people are buying with both fists everything regardless of what we tell them. In a world where bonds, stocks and alternatives are all down double digits, its tough to find a more stable place to go.
What I want to reiterate to everyone is that nobody can be perfect in this business. Nobody has all the answers all the time. Including the talking heads on TV, your family, friends, or coworkers. Everyone likes to talk about their winners but not their losers. Absolutely no one knows where or when the bottom is, or the top. Anyone who thinks they or their adviser can be is fooling themselves. What we do know is that over the last 25 years, our team has developed, refined and gone back to the drawing board to create investment strategies that attempt to mitigate downside risk as much as possible, while allowing a client to reap rewards when the markets allow for that to happen. They are not going to be perfect. The markets will go up 70-80% of the time and pull back 20-30% of the time. One of our primary goals is to mitigate the impact of market crashes to client portfolios. (defined as declines 20% or greater in the S&P 500 lasting at least one year) which are imminent but not permanent or unmanageable. The last three crashes were -57% in 2007-2009, -49% 2000-2002, and -27% in 1980-1982.* We utilize a disciplined process combining fundamental, tactical and hedges to help further this mitigation goal but that is often not enough to sidestep common but painful pullbacks (defined as 15% or greater declines in the S&P 500). In light of the recent market deterioration, we have been revisiting our asset allocations and tactically favoring cash alternatives. If we knew where the markets would go before they went there, we would have clients positioned that way. Or we would be off somewhere sipping umbrella drinks out of a golden shoe. None of which is happening. We can’t promise much except that we and the entire CrossleyShear team are working our tails off for you.
We are going through a period of rising interest rates that have been in the wings for the last decade but on hold for a litany of reasons. We have seen a 12 year bull market with loose money across the globe inflate asset prices and now we are suffering from the hangover of inflation that ultimately comes from asset bubbles. We have had a global pandemic that has taken over 1 million souls in this nation, some very close to us. That same pandemic and the global response to it has also created a massive supply chain disruption, which has exacerbated the inflation we are seeing. Throw the cherry on top with a war in Europe and a continuous, rolling lockdown in China and things just keep getting crazier.
If you are stressed about your account and the market’s volatility, we need you to know we are as well…X 600. One of the things we have always stressed is that we treat our clients’ money, as if it were our own. So please know that we too lose sleep, get sick to our stomach and even get emotional over the gyrations of this market. However just as “hope” isn’t an investment strategy, neither is “fear.” We will continue to manage this environment to the best of our abilities, with the tools of experience, research and non-emotional investment moves. While most of our clients have been supportive and understanding in this chaos, some have been less courteous and we understand your frustration. If you wish to chat, we welcome it, but we ask that you try to be professional, just as you would expect from us and our team.
I the end, we know all of these challenges will pass. The markets will eventually reach new highs, as they always do. We could be headed for more back and forth until…it stops. When it does, we are prepared to succeed for you, our trusted clients because we have processes and time tested strategies in place. We don’t move on fear or hope, we move on facts and math. Hang in there and keep yourselves and your family healthy and all things in perspective.
Sincerely,
Evan M. Shear, CERTIFIED FINANCIAL PLANNER™
W. W. Dale Crossley, Jr., JD, CWS®, Financial Planner
CrossleyShear Wealth Management’s Evan Shear and Dale Crossley Named Again to Forbes’ List of Top Wealth Advisors
HEATHROW/MERRITT ISLAND, FLORIDA, April 12, 2022 – CrossleyShear Wealth Management (CrossleyShear), a team of premier financial planning and wealth management advisors, announced today that both founding partners, Evan Shear and Dale Crossley, have been named to the Forbes' prestigious 2022 list of America’s Best-in-State Wealth Advisors. Out of approximately 34,925 nominations, the annual ranking spotlights more than 6,500 advisors who are researched, interviewed, and assigned a ranking based on an algorithm of qualitative and quantitative criteria. This is the fifth consecutive year CrossleyShear has been appeared on the distinguished list.
“This honor continues to be a humbling achievement for me, Dale and the entire CrossleyShear team. It’s also a tribute to our clients who place their trust in us on a daily basis. We understand the important role we play in our client lives. It’s this very responsibility that drives our culture and mission,” stated Evan Shear, Co-Founder and Branch Manager of CrossleyShear Wealth Management, and CERTIFIED FINANCIAL PLANNER™ professional. “This recognition is a testament to our team’s commitment and dedication to delivering the very best in care and financial planning to our clients. It’s a passion that continues to be the foundation of our individual and collective success,” added W. Dale Crossley, Jr., JD, CWS®, Co-Founder of CrossleyShear Wealth Management, Branch Manager and Financial Planner – RJFS.
To learn more about CrossleyShear Wealth Management and the practice’s financial planning and wealth management solutions, visit CrossleyShear.com. For more information about CSsports, visit CSsports.net.
About CrossleyShear Wealth Management | Since 1998, CrossleyShear Wealth Management has served as a premier financial planning team dedicated to helping provide clients and families with innovative financial solutions and wealth management strategies. With offices in Heathrow and Merritt Island, Florida, their tailored customer care philosophy and customized planning process helps empower its clients to achieve their financial goals and financial independence. The company’s CSsports division exclusively serves the unique needs of professional athletes – before, during and after their sports career – providing customized solutions ranging from everyday spending advice and retirement planning to managing investments, insurance and business planning. For more information about CrossleyShear Wealth Management and CSsports, visit CrossleyShear.com.
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CrossleyShear Wealth Management and CSsports are not registered broker dealers and are independent of Raymond James Financial Services. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC.
Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
The Forbes ranking of Best-In-State Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative criteria, mostly gained through telephone and in-person due diligence interviews, and quantitative data. Those advisors that are considered have a minimum of seven years of experience, and the algorithm weights factors like revenue trends, assets under management, compliance records, industry experience and those that encompass best practices in their practices and approach to working with clients. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. Out of approximately 34,925 nominations, more than 6,550 advisors received the award. This ranking is not indicative of an advisor's future performance, is not an endorsement, and may not be representative of individual clients' experience. Neither Raymond James nor any of its Financial Advisors or RIA firms pay a fee in exchange for this award/rating. Raymond James is not affiliated with Forbes or Shook Research, LLC. Please visit https://www.forbes.com/best-in-state-wealth-advisors for more info.
From the Desk of Dale Crossley and Evan Shear
From the Desk of Dale Crossley and Evan Shear
We hope you and your loved ones are doing well.
There’s no shortage of nerve-wracking headlines, particularly as Russia continues to wage war against Ukraine. Our hearts go out to the people of Ukraine as they fight to keep their country sovereign. Pair worrisome geopolitical tensions with rising inflation and soaring oil prices, and the markets are struggling to gain ground. Adding to the volatility, during the mid-March Federal Open Market Committee meeting, interest rates were increased a bit earlier than anticipated to help curb rising inflation. The market downturn is the unfortunate part of investing. Although it's very hard to keep emotions in check with the current headlines, we carefully plan for periods of economic downturns and market instability.Â
Although expected, March was the first interest rate increase since 2018. The decision was based on 2022 inflation projections previously at 2.7%Â and adjusted up to 4.3%, as well as GDP growth projections originally at 4%, but adjusted down to 2.8%. By raising or lowering interest rates, the Fed stimulates or slows down economic growth, as needed. Fed officials anticipate at least another 150 basis points in rate hikes by the end of the year to keep rising inflation in check. The markets will be closely watching the timing and frequency of interest rate increases as it's a delicate balancing act raising rates enough to curb inflation, but not too much as to completely stunt economic growth.Â
Lastly, you may also be aware that during the first quarter of this year, we experienced a yield curve inversion of the 2-year Treasury yield and the ten-year Treasury yield. This is often, but not always, an indicator of an upcoming recession. It’s important to note that the spread between the 3-month Treasury yield and the 10-year Treasury yield has not inverted, which is positive. While this yield curve inversion is being carefully watched, since 1976, there have been 10 inversions of this yield curve, but only 6 recessions.
The Russia-Ukraine conflict continues to be a destabilizing factor in global markets, but the Fed has repeatedly asserted that the U.S. economy and labor market are strong. We’ll be keeping a close eye on all of these factors affecting the markets and keeping you informed. As always, if you have questions or concerns about your portfolio, please do not hesitate to reach out.Â
Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.
There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. All opinions are as of this date and are subject to change without notice. Past performance is not a guarantee of future results.
Deep clean your portfolio this spring
Deep clean your portfolio this spring
Mark your calendar with important market deadlines and closures.
Refresh your portfolio this spring by reviewing your expenses and checking your credit report.
Spring 2022 market closures
- Apr. 15: Good Friday
- May 30: Memorial Day
Dates to remember
- April 18: Tax Day - The deadline to file your return and pay taxes or request an extension. Also, first quarter estimated tax payments are due, if required.
- April 18: Last day to contribute to traditional and Roth IRAs or health savings accounts for 2021.
Things to do
- Mind your RMDs: If over 72, take required minimum distributions (RMDs) from your IRAs and qualified plans. You must begin RMDs by April 1 the year after you turn 72. Subsequent distributions must be taken by Dec. 31 each year. That means if you reached 72 during 2021, and you delayed your 2021 initial RMD until April 1, 2022, you still have to take your 2022 RMD before Dec. 31, 2022. For more information, go to irs.gov/rmd.
- Home in on housing: If you’re considering buying or refinancing a home, keep an eye on mortgage rates and plan to review the terms with your advisor – this transaction will impact your financial plan.
- Consider an extension: If applicable – particularly if you hold securities subject to income reallocation – ask your tax advisor if filing an extension with the IRS would be beneficial.
- Tune up your portfolio: Similar to your retirement accounts, consider a seasonal review of your portfolio to ensure your allocation is optimal for your objectives.
- Review your cash flow: Make sure all expenses are considered and that you’re still allocating enough to your savings retirement and “rainy day” accounts. Flexible liquidity is key.
- Consolidate and donate: Create a spring cleaning ritual and let go of the clutter consuming space in your home – digitizing your files is a good place to start. Though giving items away offers its own benefits, remember to get a qualified appraisal for more valuable donations.
- Comb through your credit report: Making a habit of checking your credit report at least once a year can help you detect and dispute errors.
Withdrawals from tax-deferred accounts may be subject to income taxes, and prior to age 59 1/2 a 10% federal penalty tax may apply. Roth IRA owners must be 59 1/2 or older and have held the IRA for five years before tax-free withdrawals are permitted. The process of rebalancing may result in tax consequences. Asset allocation does not guarantee a profit nor protect against loss. Investment products are: not deposits, not FDIC/NCUA insured, not insured by any government agency, not bank guaranteed, subject to risk and may lose value. © 2021 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. © 2021 Raymond James Financial Services, Inc., member FINRA/SIPC. Raymond James financial advisors do not render legal or tax advice. Please consult a qualified professional regarding legal or tax advice. 21-BDMKT-5147 ME/KF 11/21
Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.
Five habits of 401(k) millionaires
Five habits of 401(k) millionaires
Although a million dollars may seem like a daunting figure, especially if you haven’t been diligent about saving, there’s good news: you don’t have to make $1 million to save $1 million.
Many individuals who are saving for retirement aim to have at least $1 million in their retirement accounts when they exit the workforce. But retirement savings aren’t a one-size-fits-all matter. Instead, the amount you’ll need depends on a variety of factors, including your lifestyle, specific financial obligations, future plans and health needs.
According to a recent study, the number of 401(k) plans with a balance of $1 million or more hit 180,000 in the first quarter of 2019, marking a 35% increase from the end of 2018. While the circumstances of these 401(k) participants may have varied on the margins, all were average workers who followed a handful of basic principles that enabled them to help successfully prepare for retirement. Below, we explore five of these principles, including how you can apply them to your financial plan.
Start Early
A powerful tool when it comes to saving for retirement, compound interest refers to the interest you gain on a loan or deposit. And the best way to take advantage of compounding is by saving and investing early on. In fact, a recent study showed that the average 401(k) millionaire started saving early and remained invested for at least 30 years.
As you may have read in some of our other pieces, compounding in positive markets – even at a modest rate of return – can allow you to increase an initial investment over a period of time.
Maximize your contributions
In 2022, employees can contribute a maximum of $20,500 to their 401(k) accounts, not counting any potential employer match. Depending on your income, maxing out your contributions may be more challenging earlier in your career. However, studies have found that the average 401(k) millionaire contributed a minimum of 10% to 15% of their income year after year.
Make the most of your employer’s match
Many employers offer to match their employees’ 401(k) contributions up to a certain percent, and failing to meet this match is like leaving “free money” on the table. Even if you’re not in a position to max out your 401(k) contributions, you should consider contributing the minimum amount necessary to earn your employer’s match.
Not convinced? According to one study, 28% of contributions in the average account of 401(k) millionaires came from their employers. Each year, employer contributions increased the average 401(k) millionaire’s savings by almost $4,600.
Choose the right asset allocation
A 2000 study by economists Roger Ibbotson and Paul Kaplan found that asset allocation accounted for more than 90% of the variation in a portfolio’s return over time. If you’re a long-term investor, you know that asset allocation has been one of the most important determinants of your investment earnings over time.
Investing in growth-oriented investments can help significantly boost your retirement savings through the years. While this strategy may not be appropriate for everyone, research has shown that the average 401(k) millionaire invested roughly 75% of their portfolio in growth-oriented investments such as equity mutual funds.
Avoid cashing out early
As most 401(k) millionaires know, staying the course and maximizing your earnings are crucial in helping meet your long-term retirement goals. You should resist the urge to cash out early even if you change jobs. Instead, consider rolling your current 401(k) balance into your new employer’s 401(k) plan or another option. Early withdrawals come with tax consequences and other penalties. It’s also best to avoid abandoning your investment strategy in turbulent market conditions. Many investors who cashed out in a market downturn missed part or all of the subsequent recovery.
NEXT STEPS:
- Assess your progress. If you haven’t checked your 401(k) balance in a while, now is a good time to do so. Understanding where you are can help you determine a sound strategy to attempt to reach $1 million in savings by retirement.
- Revisit your investment strategy. Is your asset allocation consistent with your retirement savings goals? Your investÂment mix should reflect your growth expectations and risk tolerance, as well as your time horizon until retirement.
- Make necessary adjustments. Depending on how far you are from your retirement goals, you may need to increase your monthly contribution rate or adjust your investment mix. Working together, you and your financial advisor can navigate these decisions and help you work toward the retirement you envision.
Sources: cnbc.com; fidelity.com; Ibbotson, Roger G. and Kaplan, Paul D., Does Asset Allocation Policy Explain 40, 90, 100 Percent Of Performance? Financial Analysts Journal, Jan/Feb 2000, Vol. 56, No. 1. Available at SSRN: https://ssrn.com/abstract=279096
Investing involves risk and investors may incur a profit or a loss. Past performance may not be indicative of future results. Withdrawals from tax-deferred accounts may be subject to income taxes, and prior to age 59 ½ a 10% federal penalty tax may apply. Diversification and asset allocation do not ensure a profit or protect against a loss. Holding investments for the long term does not ensure a profitable outcome. The foregoing is not a recommendation to buy or sell any individual security or any combination of securities.
Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.
