A MESSAGE FROM SCOTT TO ALL CLIENTS

Scott Lowe, Principal, Wealth Advisor

These are challenging times as the world prepares for, and responds to, the coronavirus outbreak.

As a 401k participant in a plan where our firm The Affinity Group serves as your plan advisor, I want to reach out to you in order to provide some perspective on the current world events.

The 11 year and 2 day “U.S equity bull-market” came to an end last Thursday as the stock market continued to experience volatility in the midst of investor uncertainty. This officially marked the end of the longest continued rise in U.S stock market in history, and what I believe will be the longest continued rally that any of us will see again in our lifetime. We all knew it would end, we just didn’t know what would cause it or how quickly things would turn.

In my 17 years in the business I’ve seen many market swings both positive and negative, many times come without any signs or warning…rarely are these large movements predictable. Panic and emotions are not your friend during markets like these, and those investors who cash out during volatile markets find it impossible to know when to get back in.

For participants over the age of 55, since you are still working you are not pulling money currently from 401k plan to pay monthly expenses. Although you are getting closer to the time where you will need this money, you are not there yet and the portfolio has time to properly heal and recover. Additionally, not all your money is in the U.S stock Market….most of you are in a Target Date Fund, meaning a fund where the risk is based upon your age and proximity to retirement. So, a 55-year-old in a 2030 target date fund may only have roughly ½ of their money in the stock market, where the other half is in bonds and fixed income investments, which do not have the volatility of the U.S equity markets.

For all participants who are “accumulators” or under the age of 55, you are not on the doorstep of retirement, and you should remain more aggressively invested. Your retirement dollars are not needed or accessible for many years, and the current market environment, although unsettling, is not a cause for making changes. In fact, you should consider increasing your savings rate into the 401k plan as this downturn present the opportunity to buy things “on sale”.

As investors we all know this would happen….markets go up and they go down, and we know we cannot always make money. However, the past 11 years of unprecedented equity market gains have been a tremendous asset to your long-term retirement plans. The downturn in U.S equities creates a tremendous opportunity to “buy low” and utilize any excess cash to make some great long-term investments.

Over the past 10 years I have brought on board countless new clients who have recounted their stories of “going to cash” in economic recession of 2007-2008 before becoming clients of ours. All of these stories share a common thread; as the markets sprang back up in 2009 and 2010, things still didn’t look good here in Ohio economically, so these investors “stayed in cash” for the next several years not knowing whether or not it was “safe to come back out”. They locked in their losses and ended up much worse off than if they would have stayed the course, and never exited the market. Some of these investors are just now getting back to where they were in 2007, 13 years later. Investors that deviate from their long-term plans typically regret it later. An

investment plan established during calmer times should not be abandoned amid a market downturn.

The last point I want to stress is the importance of a Personal Financial Plan. All the above thoughts specifically pertain to our “investment management philosophy” for you as a 401k investor. Most of you, like most American’s, do not have a financial plan. The benefits to having a plan and numerous and extremely valuable:

  • · Knowing the exact rate of return your 401k needs to earn in order for you to meet your retirement goal age, then investing and saving accordingly.

  • · Knowing you/your families annual spending and total net-worth.

  • · Understanding how much social security and pensions will support your income needs in retirement, if at all.

  • · Understanding if your estate plan (wills, powers of attorney, etc.) are up to date, as well as if you are maximizing all your tax planning strategies.

  • · Ensuring that you are paying as little interest as possible on all of your loans and debt, and that you have the most competitive rates on the market.

  • · Having proper life insurance planning to protect you and your family.

  • · Having a team of specialist from a mortgage broker, estate and general attorneys, CPA’s, and insurance specialist at your fingertips to answer your questions anytime whenever you want to speak to them.

Put plainly, we believe that financial planning or “Total Wealth Management” as we have branded it in 2020, is the absolute best way to understand not only your retirement needs, but to have comfort in your complete financial picture. Although becoming a Total Wealth Management client comes with an annual retainer fee, I believe it is the absolute best investment that you can make into your personal finances each year. For most clients having all the above is equivalent in cost to their cell phone bill or less.

 

As always feel free to reach out to our team if you have any specific questions or would like to meet with us one-on-one to discuss your personal situation.

 

Tax time considerations

Rick Eicheldinger, Affinity Financial Planner, CFP

Enrolled IRS Agent

As tax season winds down for 2019, just a few reminders on tax moves you may be eligible for…

 

  • Provided your income allows, maxing out Roth and/or IRA contributions. You can contribute $6,000 under age 50 and an extra $1,000 if you’re over age 50 for a maximum of $7,000.

  • Provided you are part of a high deductible health plan, maxing out HSA contributions. Single individuals may contribute $3500 and families up to $7000. These limits go up to $4500 for singles and $8000 for families if the HSA holder is over age 55.

  • While many will take the standard deduction, be sure to let your tax preparer know of your eligible itemized deductions (i.e. mortgage interest, charitable gifts, medical expenses, property taxes, etc.) so they can make a determination as to how you should file and save you the most money.

 

Contact our office directly if you have any questions or if we can be of assistance in any way.

 

With record-low market prices, our advisory team suggests evaluating your mortgages with the changing times. 

NETWORK SPECIALIST HIGHLIGHT

Tom has over 20 years of experience in the mortgage loan industry. He is known for his personal service in guiding his customers step by step through the home buying and refinancing process. His company offers a variety of loan products such as VA, USDA, FHA, and Conventional loans. 

Contact Tom >

 

New TEAM MEMBER HIGHLIGHT

Julia Dulc

New Business Intern

Joining us as a 2020 graduate from Akron University, Julia is training under our New Business Director, Kate Bennett. 

 

4481 Munson St NW

Suite 302

Canton OH, 44718

Contact Us

Affinity Wealth LLC is a Registered Investment Advisor and provides financial-planning services. Affinity Insurance Strategies LLC is a licensed Insurance Agency and works closely with Affinity Wealth LLC to provide services to our clients. Affinity Wealth LLC does not directly offer legal advice.

Scott Lowe is a licensed Mortgage Loan Originator, NMLS #1972148, and is an independent contractor through Pioneer Financial Services