Sound Advice

Write it on your heart that every day is the best day in the year. Ralph Waldo Emerson   Best wishes for a healthy and happy new year. N. Russell Wayne, CFP Ò  

Withdrawals in Retirement After folks save money during working years, the obvious question that needs answering is whether enough has been put away to support one’s desired lifestyle in later years.   So if, for example, you have managed to accumulate $1 million, it will be helpful to estimate your future returns on that total as well as other income, such as Social Security benefits you will receive.   You will also need to estimate your ongoing expenses. If you earn 4% on your investments and receive $2,500 a month from Social Security, you will have an available pretax total of $70,000, which will leave disposable income of $55,000 to $60,000 depending on the tax bite in the state where you live.   If your expenses are above that level, you’ll have to dip into the investment principal regularly to fill the gap.   That may be a concern if you hope to leave a substantial legacy for children or others.   In the absence of better returns, there will be a shortfall without even cons

Inside Information Have you ever wondered about unusual price changes in stocks?   These days, more often than not, atypical price movements are the result of new information about the related companies.   Some of the time, it’s about the possibility of a merger.   Other times, the information is about potential surprises in the pace of operations.   Perhaps there’s a large new contract on the way or maybe the level of incoming business has slowed dramatically.   Whenever such a change will impact profitability, there’s likely to be a reflection in the stock’s price. Before government regulations were tightened, it was entirely possible for analysts to get a head start on important information and take advantage by buying or selling a stock.   As part of their research process, analysts always ask about things like incoming order rates, supply issues, acquisition possibilities, and what’s new in company pipelines.   Those who were in regular communication were the first to know.  

Strategy of the Day, Week, Month, Year, etc. Knowledgeable investors can only gag at the plethora of schemes that bombard the public every day.  Whether it’s 10 stocks to buy now, funds you can hold forever or strategies to make money in up or down markets, there seems to be no end to these preposterous enticements. Unlike Las Vegas, Atlantic City or Monte Carlo, the odds of success when investing in stocks and bonds are on your side.  However long a period you choose, assuming it’s 20 years or more, there has always been a positive return on stocks.  Indeed, over the past half century, the Dow Jones Industrial Average has risen more than 50-fold. Yes, the increase over the five-decade period has not been consistent. During some decades, such as 2000-2010, the stock market went nowhere, yet in the 10 years that followed, the annual gains from stocks were nearly double the historic average.  It’s a cyclical thing that depends largely on valuations.  Back in the mid-1970s, amid a