Lifestyle

Top # Medicare Planning Mistakes and How to Avoid Them: A Guide for High-Net-Worth Clients

Top # Medicare Planning Mistakes and How to Avoid Them: A Guide for High-Net-Worth Clients

Linda had always been the picture of health. She ate well, exercised regularly, and never had any major health issues. So when she retired at the age of 65, she didn’t think much about long-term care. After all, why would she need it?

 

For the first few years of retirement, Linda enjoyed traveling, spending time with family and friends, and pursuing her hobbies. But then, she started to notice that she was having more trouble with everyday tasks. Her arthritis made it difficult to get around, and her memory wasn’t what it used to be.

 

Despite these challenges, Linda was determined to stay in her home as long as possible. She hired a part-time caregiver to help her with housekeeping and personal care, but she didn’t think much about the cost. After all, she had plenty of savings, and she assumed that Medicare would cover any medical expenses she might have.

 

But as Linda’s health continued to decline, her care needs became more complex. She needed help with bathing, dressing, and getting in and out of bed. She needed medication management and supervision to ensure that she didn’t wander away from home. And as her needs increased, so did the cost of her care.

 

Linda was shocked to discover that Medicare doesn’t cover long-term care. She had assumed that her savings would be enough to cover any costs, but she hadn’t counted on needing care for years on end. She had no long-term care insurance, and she hadn’t set aside enough money to pay for the care she needed.

 

As a result, Linda’s savings quickly dwindled. She had to sell her home to pay for her care, and she had to rely on Medicaid to cover some of her expenses. She was no longer able to afford the things that had brought her joy in retirement, like travel and hobbies. Instead, she spent her days in a small room in a nursing home, watching TV and waiting for visitors.

 

Linda’s story is a cautionary tale for anyone who thinks that long-term care is something they can worry about later. The truth is that none of us know what the future holds. Planning ahead for long-term care can be the difference between a comfortable retirement and financial ruin.

 

But, this is just one of the many common mistakes high net worth investors have made when planning for the Medicare piece of their retirement puzzle.

 

Don’t make a major Medicare planning mistake like Linda did. Start planning for your future today, and talk to a financial advisor about how you can protect your assets and ensure a secure retirement.

 

Mistake #1: Bottom of Form Not Understanding Medicare

 

One of the biggest mistakes high net worth clients make is not understanding the different parts of Medicare. Medicare is made up of several different parts, including Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage). It’s crucial to understand how each part works and what they cover to ensure you have the right coverage for your needs.

 

Mistake #2: Choosing the Wrong Medicare Plan

 

Choosing the wrong Medicare plan can be a costly mistake. You may be tempted to choose a plan with a lower premium, but this could result in higher out-of-pocket costs for medical expenses. On the other hand, choosing a plan with a higher premium could be a waste of money if you don’t need the additional coverage.

 

Mistake #3: Not Reviewing Medicare Coverage Annually

 

Your health needs can change from year to year, and so can your Medicare coverage needs. It’s important to review your coverage annually during the open enrollment period (October 15 to December 7) to ensure that you have the right coverage for your needs. Failing to do so can result in missed opportunities to save money or receive better coverage.

 

Mistake #4: Failing to Plan for Long-Term Care

 

Medicare does not cover long-term care, which can be a significant expense for high net worth individuals. Failing to plan ahead for these costs, either by purchasing long-term care insurance or setting aside savings, can be a costly mistake that depletes retirement savings.

 

Mistake #5: Not Working with a Financial Advisor to Avoid Medicare Planning Mistakes

 

Working with a financial advisor who specializes in Medicare planning can help high net worth individuals avoid costly mistakes. An advisor can help you understand the different parts of Medicare, choose the right plan for your needs, review your coverage annually, and plan for long-term care costs. By working with an advisor, you can have peace of mind knowing that your Medicare planning is in good hands.

 

“Working with a financial advisor has been a game-changer for my retirement planning. Before, I was making costly mistakes with Medicare and had no idea how to plan for long-term care costs. But my advisor has helped me navigate these challenges and ensure a financially secure retirement.” – John D., high net worth client

Next Steps

 

Medicare planning can be complicated and confusing, but it’s a crucial part of retirement planning for high-net-worth individuals. By avoiding common Medicare planning mistakes and working with a financial advisor who specializes in Medicare planning, you can ensure a financially secure retirement. Don’t wait until it’s too late to start planning. Schedule a call with Platt Wealth Management today to learn how we can help you avoid costly Medicare planning mistakes and achieve your retirement goals.

 

You can omit this or replace it with a real testimonial if you’d like.

 

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

The Pros and Cons of Retiring at Different Ages

The Pros and Cons of Retiring at Different Ages

While retirement sounds like an absolute dream, getting there can often feel a little stressful. Are you saving enough? How much do you really need? Will the market be favorable when you do? And, the big one: When can you actually retire?

 

Narrowing down the best time, or really the best age, for you to retire comes with a lot of considerations, especially what sort of lifestyle you want to have in retirement. So, we’ve put together this list of the pros and cons of retiring at different ages to help guide you to your ideal retirement window.

Retire Before Age 65

 

Retiring before age 65 is traditionally “early” and is what most of us would like to do. However, the Center for Retirement Research data shows that most Americans retire before or at age 65 with men retiring at an average age of 65 and women at an average age of 62. But is an “early retirement” right for you?

Pros

The two biggest advantages are that you are likely to have more energy and better health at a younger age. Plus, shifting from a full workday to either a part-time job, monetizing a hobby, or finding volunteer opportunities can help make the retirement transition easier.

Cons

Your retirement funds will also have to last longer if you retire early. Leaving behind your career and what are probably your highest earning years early will mean you could be leaving however many years of potential retirement savings (and potentially an employee match) behind. Plus, while you are eligible for Social Security at age 62, your monthly amount will be less if you don’t wait until you are old enough for your full benefit. And, finally, you will need to have a plan for health insurance since you won’t be able to get Medicare until age 65.

Retire Between Ages 66 and 70

 

Sixty-five has been viewed at the age of retirement since Social Security was established. However, as of 2022, Social Security views the full retirement age at 66 for those born between 1943 and 1959 and at the age 66 plus a few months depending on your exact birth year if you were born between 1955 and 1959. For anyone born after 1960, the full retirement age is 67.

Pros

Getting a few more years of savings and investing on top of waiting until you are eligible for both Medicare and your full Social Security benefit can make a huge difference in your finances. Private insurance premiums and prescription co-pays are not cheap after all. Plus, you paid into Social Security all of those years. So even if you have a pension and other retirement savings accounts, waiting just a few more years to get your Social Security benefits will ensure you get the full amount you are eligible for.

Cons

Well, you saw the data above. Most Americans aren’t waiting to age 66 to retire and most don’t want to. So waiting those extra years could feel like you’re back in school waiting for that last month of school to get over.

Retire at Age 70 and Older

 

If you’re in the group of folks who have to wait until 67 to get their full Social Security benefits, waiting just another couple years may not seem too bad. But is there anything to gain or lose?

Pros

Some folks just love their work and feel like they would be lost without it. And that’s OK! So continuing to work longer may be better for you mentally and emotionally if you fall into that category. Plus, if you wait until age 70 or older to start taking your Social Security benefits, your payout will be the highest on top of the extra years of retirement savings and investing. You may never have to worry about having enough money in retirement.

Cons

You will not be able to predict what your energy level or overall health will look like as you get older. Your health could start declining before you retire or after. You could be giving up the opportunities to travel or do other things you enjoy that you always planned to do in retirement if you wait. Even if your nest egg is larger, you could end up not having enough time to use it.

 

Finding the Right Answer

 

There is not really a right or wrong answer to when you should retire. Each person and your unique circumstances can change and so can the financial landscape. Many of our clients even benefit from doing a “test run” on their retirement plan before they actually leave work to see if this changes their perception of their need. Either way, we encourage you to lean on an expert to help guide you to a retirement plan that works best for you.

 

At Platt Wealth Management, we empower our clients to lead their best lives by providing them with the financial expertise they need. We help our families think through their goals, and even dreams they never thought possible. Then, we work together to put in place financial options that give them peace of mind. Schedule a call with our team today to discuss your opportunities.

 

 

 

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

How to Test Run Your Retirement Plan (for Greater Success and Fulfillment Later in Life)

How to Test Run Your Retirement Plan (for Greater Success and Fulfillment Later in Life)

Sometimes long vacations can seem like a test run for retirement. Long walks on the beach. Endless rounds of golf. All the umbrella drinks you want. But there’s more to retirement than just all the cliches of tropical relaxation.

 

You are going to have plenty of regular days at home. But what will those look like? And how will you feel about being retired and on a “fixed” income? Are you confident in your current retirement plan to keep you not only financially comfortable but also enjoying life all the way to the end?

 

Here are three ways to test run your retirement plan for greater success and fulfillment later in life:

 

1. Start Thinking Like a Spender

No, we don’t mean to start spending frivolously.  We mean to start wrapping your mind around the idea that you will be moving from a saving mindset to a spending one. Because you will have chosen to invest wisely with the help of a trusted financial advisor, you will likely be receiving an income from your assets. But, for many folks, it can be a mental mind twister to no longer have a paycheck coming in (even if you owned your own business).

 

Some recent research from BlackRock and the Employee Benefit Research Institute showed that even after 17-18 years of retirement, retirees across all levels of wealth had 80% of their pre-retirement savings remaining. And that was even more likely for high-net worth individuals, who have assets worth more than $1 million.

 

You’re going to have to trust yourself and trust your retirement plan that you have enough to support the retirement lifestyle you want for the rest of your life. And enjoy it!

 

 2. Start Figuring Out Your Budget

  

A budget can really help you get into the right “spending versus saving” mindset. Now, a lot of folks think a budget means that you are limiting your spending, but a budget simply means telling your money where to go. And by figuring out a budget now, you will already have a game plan come retirement. No one wants to be the person who runs out of money, but you also don’t want to be the person who has millions just sitting in the background while you watch your life pass your by. It’s your money. You should leverage it to help you meet your goals, but also to make sure you live a fulfilling final chapter.

 

Once you have your budget all written out or put into a spreadsheet or app  — whatever works best for you (and your spouse) — take it for a test drive. See how it works for you for a month or so. You can make the necessary adjustments now so you’re ready once retirement comes along. You may uncover that you need more or less than you anticipated and can work with your financial advisor to make modifications as needed.

 

3. Start Planning a Routine

Aside from the money aspects, you also need to consider your time. It makes sense that all you can think of now is how great it’ll be not to have a plan. No meetings, no deadlines, no responsibilities. Woohoo! But, throwing routine completely out the window can be a huge change to you mentally and physically. Just think about the first few weeks of the pandemic when we were all asked to stay inside. It was certainly strange for many of us!

 

Often, mental health can be a touchy subject for some, but you do need to consider what a change in routine will do to yours. Remember that you will have had a schedule from the time you started school in kindergarten or preschool all the way through your working career. That’s a long time! And mental health can especially be a struggle for newbie retirees. Even before the COVID-19 pandemic caused depression and anxiety to skyrocket in adults of all ages, one in 10 (11%) older adults — those age 65 and older — reported depression or anxiety on the 2018 Medicare Current Beneficiary Survey. Consider printing out a calendar and writing up a model week of how you think you may spend your time, including when you will take care of non-negotiable responsibilities, your physical health, socialization, and household responsibilities to protect your mental health in this new stage of life. 

 

Still Need Some Help Preparing for Retirement?

 

Don’t have a retirement plan yet? Not confident in your current plan? Or simply need a retirement plan check-up? No matter where you are in your retirement planning journey, our team can help. Simply schedule an appointment with one of our trusted advisors to discuss your opportunities today.

 

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

How to Take Advantage of the Inflation Reduction Act

How to Take Advantage of the Inflation Reduction Act

Have you considered switching to a more energy-efficient vehicle or perhaps adding solar panels to your home? How about a new water heater? With inflation on the rise, you may have been holding off on some of these larger purchases, but the government incentives passed with the Inflation Reduction Act may just cause you to reconsider.  

 

Following politics, especially in today’s divided times, isn’t everyone’s favorite pastime, so you may not be keenly aware of the opportunities made available by the passage of the Inflation Reduction Act.  Changes to Medicare and the Affordable Care Act seem to grab the most spotlight, but you would be remiss to ignore the other main components of the legislation: energy and climate. Starting in 2023, several tax credits will be available for Americans who switch to greener energy sources.

 

For a more in-depth look, here are three ways you can take advantage of the Inflation Reduction Act (IRA):

1. Electric Vehicles

Many Americans have started considering moving to an electric vehicle after gas prices hit record numbers. If you’re one of them, the time to buy may be now. The IRA adds incentive by offering tax credits up to $7,500 on a new electric vehicle and up to $4,000 on a used one placed into service after Dec. 31, 2022.

 

Even if you weren’t already thinking about getting an electric vehicle, you may want to change your mind. It seems the writing is on the wall for gas-powered cars, as California just banned the sale of new gas-powered cars by 2035 and even Ford is shifting to electric vehicle production. And you have time. The tax credit runs through December 2032.

2. Home Efficiency Updates

Homeowners looking to upgrade their home(s) may want to take advantage of the two tax credits and two rebate programs available for certain upgrades.

 

Installing energy-efficient insulation or exterior doors and windows are worth a 30% tax credit up to $1,200 per year. If you update or install heat pumps, heat pump water heaters, or biomass stoves and boilers, the cap increases to $2,000. There is also a 30% tax credit for installing solar panels or other renewable energy sources like wind, geothermal, and biomass fuel. To be eligible, projects have to be finished after Jan. 1, 2023 and before 2034, and, like all tax credits, the savings can only be realized once you file your income tax return.

 

In addition, the IRA established rebate programs that offer either up to $8,000 or up to $14,000 but you have to make 150% or less than your area’s median income, which is established by the U.S. Department of Housing and Urban Development. The HOMES Rebate Program covers upgrades that increase your home’s overall efficiency via upgrades, such as solar panels or new windows. The High-Efficiency Electric Home Rebate Act (HEEHRA) offers rebates for switching to electric appliances and doing other electric retrofitting like:

  • Electric stoves, cooktops, ranges, ovens, and clothes dryers
  • Electric wiring
  • Heat pump water heater
  • Heat pump for space heating and cooling
  • Insulation, air sealing, and ventilation

3. Prescription Drugs

Of course, the health care portions of the bill could help as well. For those old enough to be on Medicare, the IRA puts a $2,000 per year cap on out-of-pocket prescription drugs. This won’t take effect until 2025, so even those about to retire should keep their eyes open for ways to save, especially if you are diabetic. The IRA caps insulin costs at $35 a month.

Need Help?

We know that you’re used to us handling your investments and helping you with the most efficient tax strategies, but all major money decisions affect your financial plan—even if it’s just making some home or vehicle upgrades.  That’s why we want you to be aware of these incentives. They won’t last long, and we’d like you to take advantage if you wish. At Platt Wealth Management, we’re always here to help, even for life’s simpler decisions, like these.

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Messenger RNA Technology a Silver Lining

Messenger RNA Technology a Silver Lining

Many of us have been in lockdown for more than a year. We’ve canceled vacations, restaurant visits, and in-person schooling. More than 500,000 of our loved ones across the country have passed away.

Is there a COVID pandemic silver lining?

It turns out there is. The messenger RNA immunization technology developed for the Moderna and Pfizer coronavirus vaccines has the potential to revolutionize the way we treat—and prevent—a wide variety of other diseases and illnesses. Scientists are sequencing HIV, seasonal flu viruses, and certain cancers. They are identifying snippets of RNA that could teach the body to fight them off before they can run rampant through the body.

The vaccine approach to the coronavirus uses lipid nanoparticles—essentially fat bubbles—to deliver bits of a disease’s genetic material into the body, helping the immune system spot the spike proteins they use to enter human cells. At the moment, Moderna is working on two HIV vaccine candidates: mRNA-1644 and mRNA-1574.

The vaccine has been tested successfully in macaque monkeys, which developed neutralizing antibodies that bind to the proteins that HIV uses to enter cells, neutralizing the disease before it can spread. Another mRNA test protects mice against HIV infection.

 

Messenger RNA for the Flu?

 

Meanwhile, phase 1 clinical trials for more effective seasonal flu vaccines will start this year. Companies are developing additional RNA vaccines for mononucleosis, types of lymphoma, and nasal cancer. Other experimental cancer vaccines will require doctors to extract tumor samples from the patient, sequence the genome, and create a specific RNA therapy that will teach the immune system to destroy the cancer cells—and only the cancer cells. Six of 10 patients in an early trial responded positively to the treatment; in two, the cancer was destroyed, while four others stabilized and had no further cancer progression.

The newly-developed therapies also offer promise in fighting several autoimmune diseases, including multiple sclerosis. A recent mRNA experiment suggests that mRNA treatment can promote the development of blood vessels. An injection might improve outcomes in people undergoing coronary artery bypass surgery.

Some of these therapies might have happened eventually without the crash COVID vaccine projects, but almost certainly, they would not have been in clinical trials this quickly. We mourn the millions of people lost to the pandemic here and abroad, but there may be fewer deaths, and diseases, in our future.

 

 

 

Are you on track for retirement?

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

How Pent Up Demand Could Fuel Economic Recovery

How Pent Up Demand Could Fuel Economic Recovery

With major league baseball’s spring training just around the corner, you may already be daydreaming about the smell of cut grass and roasted peanuts, hearing the crack of the bat and the roar of the crowd — just to feel normal again. 

 

If so, you are not alone — not among fellow Americans weary of the COVID pandemic nor within the context of history. This would not be the first time Americans have lived through a period of austerity brought on by a pandemic that resulted in burgeoning pent-up demand and economic recovery. In 1918, the Spanish Flu and World War I largely curtailed social gatherings and other activities across the country. 

 

To be sure, the U.S. was a very different place in the early 20th century, but consider that attendance at baseball stadiums in 1918 was half that of the previous year.

 

By 1919, however, the pandemic had largely subsided, the war was over and attendance at games soared from 2.8 million in 1918 to 6.5 million in 1919. The decade that followed — the Roaring ‘20s a time of exploding economic recovery— coincided with the first golden age of the automobile. Americans eager to see the countryside bought nearly 26 million cars and 3 million trucks in the 1920s, according to Automotive News.

 

Could pent-up demand for travel and leisure drive a Roaring ‘20s economic recovery today? 

 

Ready, willing — and able — to spend

 

Indeed, cabin fever appears to have taken hold of consumers everywhere. There are signs that Americans are prepared to act: Savings rates have soared since the start of the pandemic, and though they have slowed a bit in recent months they remain relatively high.

 

 

Many consumers have boosted their savings during the pandemic

Bar graph showing US Savings Rate 2020

 

Once the current situation subsides, the desire to travel plus the ability for consumers to spend means we could potentially see a powerful economic recovery.

 

The economic environment is much different than the global financial crisis of 2008.  Today, looser fiscal policy, looser monetary policy, strong banking infrastructure and a higher personal savings rate could drive a sharp pickup in demand.

 

These conditions not only can benefit the travel and leisure industries but also the broader economy. To be sure, there will probably be hiccups along the way, and some areas will likely recover more quickly than others.

 

 

Passenger loyalty: A tailwind for cruise lines toward economic recovery

 

Cruise ships became the epicenter of the COVID crisis in February 2020, when 3,700 people were quarantined aboard the Diamond Princess after a shipboard outbreak. At the time, the ship accounted for half of all known cases outside mainland China.

 

Over the past year, this industry has gotten so much negative media, yet people are still booking cruises for 2021 and 2022. 

 

In fact, more than 70% of respondents to an industry survey said they will cruise again.

 

Loyal customers can keep cruise industry afloat

 

While cruising has resumed in Europe, the U.S. Centers for Disease Control imposed a “no sail” order that has not yet been lifted in North America.

 

There is still uncertainty as to when ships will set sail again, but there is a possibility that they will be cruising near full capacity quicker than many people expect.

 

What’s more, with intense focus on healthy sailing practices, there’s a case to be made that they could one day be considered among the cleanest places on earth to vacation.

 

Vacation plans up in the air

 

As was the case in the cruise industry, global air travel was down an estimated 66% in 2020, about 20 times worse than the previous record. Within the U.S., which is more dependent on business travel, the devastation was worse: Air travel declined as much as 95% in the early months of the crisis.

 

The rollout of the vaccines and, prior historical events, leads to increased confidence that demand will bounce back. For example, we also saw this after the September 11 attacks. A lot of people thought consumers would never fly again, and traffic recovered quickly.

 

Indeed, in China, where the virus is largely under control and the economy has rebounded, domestic air travel has nearly returned to pre-COVID levels.

 

Air travel in China has soared back. Will the U.S. soon follow with it’s own economic recovery?

The ripple effect for economic recovery waves

 

A revival in travel demand can also have a powerful ripple effect, creating the need for a range of goods and services and helping drive job growth across a variety of industries. Among these are aircraft manufacturers, jet engine makers, hotels, casinos and restaurants — all of which were devastated by the pandemic.

 

Consider aircraft engine makers, which operate a recurring revenue business model. Companies like Safran and General Electric build the engines and sell them at a modest profit, but the engines must be serviced regularly, and the engine makers can generate a great deal of revenue from the service contracts.

 

Unlike other sectors of the economy during COVID, aircraft engine makers are not going to see digital disruption upend their business. After all, there are no digital aircraft engines. 

 

Markets tend to anticipate recoveries

 

Markets often anticipate recoveries in the underlying economy, so it’s important to recognize underlying trends early. Consider the global financial crisis, a period when the housing and automobile industries were severely beaten down. By 2012 it became clear that demand was building, thanks to changing demographics and an aging auto fleet. In both industries, a full recovery took several more years, but a rebound in auto- and housing-related stocks anticipated the recovery in demand and earnings. From February 2009 through December 2010, auto sales fell 6% while auto stock returns advanced 496%.

 

 

Auto stocks rebounded ahead of sales after the global financial crisis

More recently, since the introduction of the vaccines, shares of companies across a number of travel-related industries have registered strong gains.

 

 

 

The market often reflects a recovery in earnings before they materialize.  In a year from now, we could be in a very different environment where demand and earnings for some of these companies begin to recover in a more meaningful and sustained way.

 

 

 

Maintaining a balance

 

 

 

Students of history can look to many examples of past crises and declines that were followed by powerful economic recoveries thanks in part to pent-up consumer demand. Examples include the travel sector after 9/11 and the housing and auto industries following the end of the great financial crisis in 2008–2009. 

 

 

 

For investors and their advisors, it is important to make sure portfolios are balanced with exposure not only to growth strategies but also to strategies focused on more value-oriented companies, like many of the travel-related stocks.

 

 

 

A review of more than 4,000 portfolios by Capital Group found that investors significantly reduced allocations to value equities over the last three years. It may be time to rebalance. 

 

 

 

Returns for leading growth companies have continued to be strong, for good reason. But it may be shortsighted for investors to become seduced by the runaway growth stories, considering that many of the beaten down stocks in travel and other sectors have attractive valuations. And recently there have been some early signs that the market rally may be broadening as many of these stocks have posted meaningful gains.

 

Investors have scaled back their exposure to value funds

 

We just experienced a market downturn and recovery where the growth-oriented companies led during the decline and on the way back up.  Historically, that is an unusual pattern.  As the vaccines roll out and the recovery broadens we may begin to see companies in the travel industry, or perhaps energy or financials, all of which had been very hard hit during the downturn, participate in the recovery.

 

 

 

 

Are you on track for retirement?

 

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is a critical part of your journey to the retirement of your dreams. An experienced Financial Advisor can help you navigate the complexities of investment management. Talk to a Financial Advisor>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

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