All Posts By

Ryan Smith, CFP®, RICP®

We Are in a Bear Market

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Yesterday, we officially entered a bear market when the stock market closed more than 20% from its recent February highs. On average, we experience bear markets every three years, but this one stands out in the speed with which we entered it. In fact, it’s one of the most sudden bear markets ever: the average number of trading days from the most recent market high to entering a bear market is 137, according to Dow Jones. This one took just 19 days, making it the second fastest ever. See the charts below for more context on bear markets:  A decline of this magnitude

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Your Home is Not An Investment (You Probably Won’t Downsize)

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Home prices, both nationwide and in the Triangle, have surged over the past few years. The escalation in prices across the country brings back memories of the boom period prior to the financial/housing crisis of 2007-2009. There isn’t evidence to suggest that is what’s taking place this time, but the rapid rise in home prices is nearly unprecedented. The chart above, taken from Robert Shiller’s website, displays four pieces of data: home prices, building costs, population growth, and interest rates. Looking at home prices in blue, you can see the massive bubble that was building from 2000-2007. The home price

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The Risks We Overlook

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I feel comfortable saying most people are aware that death or disability will affect their finances or the finances of the loved ones they leave behind. They may underestimate the impact or fail to take the necessary steps to mitigate these threats, but, at the very least, they recognize it’s a risk. Yet, there are other risks that are often overlooked, and while the results may not be as catastrophic as losing the ability to work (or worse), they can still upend a solid financial plan. Here are a few of them: Co-signing a loan: You may have been asked

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The President Has Been Impeached

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On Wednesday night, President Trump was impeached by the House of Representatives. The next step is for a vote to take place in the Senate, where a two-thirds majority is required to remove a sitting President. Given the Senate is controlled by Republicans 53-47, the likelihood of conviction is quite low. President Trump is only the third President to be impeached. The other two are Andrew Johnson in 1868 and Bill Clinton in 1998. (Coincidentally, former President Clinton was impeached on December 19th, putting President Trump’s almost exactly 21 years later.) Former President Richard Nixon was well on his way

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Is Saving to a 529 Plan Worth It?

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A few weeks ago, Geoff and I were discussing whether it made sense for a potential client to contribute to a 529 plan (“college savings plan”) for their kids who were entering college in a few years. Yes, the gains would be tax-free, provided the funds were used for qualified expenses, but the short timeframe made it imprudent to invest any contributions in stocks. If growth was minimal, did it still make sense to contribute? That, of course, sparked a larger debate about whether there is any real benefit in contributing to a 529 plan. The gains are tax-free, sure,
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The Roth IRA: You’re Using It Wrong (Most Financial Advisors Are, Too)

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Most Roth IRAs are used incorrectly. It’s not only some DIY investors that are getting it wrong, but, based on my experience, a good percentage of financial advisors, too. In order to understand why most are getting it wrong, it’s important to know the three primary types of investment accounts and how they work. Here’s a quick overview (this is a simple overview. Please do not make any contributions or withdrawals based on it. Talk to your financial advisor and/or your CPA first): Traditional IRA/401(k): You receive an income tax deduction in the year you contribute and the funds grow

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How Much Should You Save Each Year?

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There’s ample research about how much you can safely withdraw from your portfolio once you retire. There’s less research about how much you need to save annually so you can retire (this is called your “savings rate”), probably due to the large number of variables that exist. It’s easy enough to say you should be able to “safely” withdraw 4% from your portfolio in your first year of retirement and increase it annually for inflation without fear of running out of money. It’s harder to say how much you need to save each year because you may have started saving

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Two Charts that Can Make Investing Easier

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Investing offers what in theory seems like an easy trade: long-term wealth creation for short-term volatility. But the reality is that it’s not so simple. The promise of gains over 10 or 20 years becomes less compelling as you face large market drops that take place over the course of a day or two, never mind when the losses accumulate for weeks or months at a time. Make no mistake about it: investing is hard, and the most difficult part is managing your emotions against the swings of the market and the constant chatter from the financial media. Below you’ll

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Do It Now

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My family and I just returned from a trip to Johns Hopkins Medical Center, a journey we’ve made three times over the last two years as we’ve tried to get a handle on why Emily hasn’t been feeling well. During our last visit the team of specialists we met with gave her, in my words, a “non-diagnosis-diagnosis” of a “non-differentiated” auto-immune illness. They realized something was going on, they just couldn’t say what. When I think back to when Emily’s symptoms first began, I’m reminded of how quickly things can change. I’m sure the progression wasn’t this dramatic (or maybe

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Four ways the SECURE Act may impact you.

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There is a bill working its way through Congress that could impact every retirement saver and, potentially, their heirs. The Setting Every Community Up for Retirement Enhancement (SECURE) Act has four important provisions that you should be aware of: It increases the Required Minimum Distribution (RMD) age: Currently, everyone must begin to withdraw from their IRA or 401(k) in the calendar year they turn age of 70 ½. (There are narrow exceptions where 401(k)s are concerned.) In response to people both working and living longer, this bill would push the RMD age back to 72. There’s no indication as of

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