THE UNCOMMON AVERAGE

For long-term investing AKA investing for your retirement we always preach two things: diversification and time in the market. We want diversification cuz when never know when one market, say U.S. stocks, will do very well and when other areas will do very poorly. Having a diversified portfolio helps to smooth out the wildness that comes with concentrating our retirement money in one specific area instead of spreading it out. And, as is highlighted in the attached article, “The data shows that, while positive performance is never assured, investors’ odds improve over longer time horizons.”

Please give the attached article by DFA a read, it’s a very short one, too, but I’ve also pulled out this image which shows the frequency of experiencing positive returns in the S&P 500 – the more time we spent in the market, the greater chance we gave ourselves of having a positive return on our investment. This also supports why it is so important to start saving and investing early and to continue to do so. If you start early you could experience two or three of these 15-year periods.

the longer you're in the market the greater your chances for positive returns

COST MATTERS

Two things we know about investing:
1. we do it to make money
2. the less we pay to invest, the more money we’ll make

That’s why investor costs are paramount at Pensinger Financial. Our management fee is low – lower than the industry average, and we use low-cost mutual funds – also, lower than the industry average. Our goal is to make you money, and we know we give ourselves a better chance of doing that when we keep your investment costs low. It’s a very simple, yet very powerful concept – the attached article digs into some of the costs associated with being an investor and why it benefits us to keep those costs as low as reasonably possible given the goal we are pursuing.

Enjoy!

Q2 2017 MARKET SUMMARY

Here you can find DFA's Quarterly Report for Q2, 2017. You should give the two-page article a read, it begins on page 16.

When interest rates rise, what happens to stocks, moreover, what happens to the value of your stock portfolio? The short answer is we don’t know what WILL happen. But, we can look at what HAS happened - albeit, what has happened has no bearing on what will happen, but, maybe we can be a little bit more informed using some history, so that we don’t make irrational decisions going forward. Please give the short article a read, and pay attention to the areas I highlighted.

WHAT IS BICE?

With recent Department of Labor rulings, the advisory world is changing. In certain instances, firms and its advisors are required to act in a fiduciary capacity for its clients. To act in a fiduciary capacity means for a firm/advisor to always put the client’s best interest before their own. I think firms and advisors should always act in a client’s best interest in all instances. Since day one, Pensinger Financial has always acted in its clients’ best interest, we have always put our clients first and will continue to do so.

Unfortunately, there’s a loophole for firms and advisors to exploit to get around acting in their client’s best interest. It is called Best Interest Contract Exemption or BICE for short. By signing this contract, you are exempting your advisor and his/her firm from acting in your best interest, in other words, you are signing away the right of your advisor and his/her firm to do what is best for you. I think it’s wrong and bad. But please know, Pensinger Financial will never use a BICE with you, we will always put your interests first, before of our own.


IT'S THAT TIME OF YEAR: PREDICTION SEASON

This article gets a little math heavy, so I pulled out the concluding paragraph for you to read. It sums up a crucial aspect of the investment management services Pensinger Financial provides your retirement portfolio…

CONCLUSION As the end of the year approaches, it is natural to reflect on what has gone well this year and what one may want to improve upon next year. Within the context of an investment plan, it is important to remember that investors are likely better served by trusting the plan they have put in place and focusing on what they can control, such as diversifying broadly, minimizing taxes, and reducing costs and turnover. Those who make changes to a long-term investment strategy based on short-term noise and predictions may be disappointed by the outcome. In the end, the only certain prediction about markets is that the future will remain full of uncertainty. History has shown us, however, that through this uncertainty, markets have rewarded long-term investors who are able to stay the course.

You’ll never hear us talk about predicting the short-term future movements of your retirement portfolio and that reason is simple – it’s because we can’t; we have no idea if the market will be up or down tomorrow. But frankly, those short-term market movements don’t matter, our focus is on the long-term market movements…the only market movements that matter to you and us. Long-term market movements will grow our portfolios, but the short-term market movements can derail that grow if we don’t focus on what truly matters in the short-term. Over the short-term we don’t look at predicting anything, we don’t look at buying the hot stock or investing in the flavor of the month sector of the economy, instead we focus on what we can control, which are: your portfolio allocations, your fees and expenses, and your tax implications. We do this because we know these areas add value to your portfolio over time, like keeping your costs low for example – our management fee is less than industry average and we use very low-cost portfolios because typically the less you pay in fees the more money you will make…and our job is to make you money. The areas that can severely derail your portfolio’s growth, like trying to predict where to invest next, can ruin your chance of having a safe, secure and comfortable retirement – we won’t take that chance.