Cortburg Speaks Retirement

5 Common Investment Mistakes When Planning for Retirement

November 11, 2020 Miguel Gonzalez, MBA, AIF®, CPFA®, CRC® Season 2020 Episode 9
Cortburg Speaks Retirement
5 Common Investment Mistakes When Planning for Retirement
Chapters
0:00
Introduction
1:07
Weekly Educational Update
4:06
Week on Wall Street
8:04
Weekly Tax Tip
9:57
Healthy Lifestyle Advice
11:39
Green Living Idea
12:39
Quote of the Week
13:02
Conclusion
Cortburg Speaks Retirement
5 Common Investment Mistakes When Planning for Retirement
Nov 11, 2020 Season 2020 Episode 9
Miguel Gonzalez, MBA, AIF®, CPFA®, CRC®

Cortburg Speaks Retirement

Cortburg Speaks Retirement / Investment in Stock Market, Financial Planning, Retirement Planning, Money Management

1. Educational Update = 5 Common Investment Mistakes When Planning for Retirement
 
2. Week on Wall Street


3. Tax Tip =  Bartering and Taxes

4. Healthy Lifestyle Advice = Keeping your Heart rate up

5. Green Living Idea = Green up your business

6. Quote of the Week

Show Notes Transcript Chapter Markers

Cortburg Speaks Retirement

Cortburg Speaks Retirement / Investment in Stock Market, Financial Planning, Retirement Planning, Money Management

1. Educational Update = 5 Common Investment Mistakes When Planning for Retirement
 
2. Week on Wall Street


3. Tax Tip =  Bartering and Taxes

4. Healthy Lifestyle Advice = Keeping your Heart rate up

5. Green Living Idea = Green up your business

6. Quote of the Week

INTRODUCTION

Welcome to Cortburg Speaks Retirement

An audio podcast about investing in the stock market, financial planning, money management and retirement planning.  Each Wednesday, we help investors at all stages of life learn how to grow and preserve their money from first job through retirement.

Now here is your host, Miguel Gonzalez.

 

HOST

Hello and welcome to the CORTBURG SPEAKS RETIREMENT audio podcast.   On this episode, I am going to share 5 common investment pitfalls investments make and we are going to recap last week on Wall Street.   Our tax tip is about bartering and taxes.  Our healthy lifestyle idea is about keeping your heartrate up as temperatures go down.  We will discuss how to keep your business green and end with a motivational quote of the week.


 1st – weekly educational update
5 Common Investment Mistakes When Planning for Retirement

This segment of our audio podcast describes five common investment pitfalls — and how you might avoid them. 

Only about 23% of American workers say they are "very confident" they will have enough money to live comfortably throughout retirement. To help reduce such uncertainty in your life, consider these five common investment pitfalls -- and how you might avoid them. 

 

Mistake #1: Waiting to Maximize Your Contributions The sooner you start contributing the maximum amount allowed by your employer-sponsored retirement plan, the better your chances for building a significant savings cushion. By starting early, you allow more time for your contributions -- and potential earnings -- to compound, or build upon themselves, on a tax-deferred basis. 

Mistake #2: Ignoring Specific Financial Goals It is difficult to create an effective investment plan without first targeting a specific dollar amount and recognizing how much time you have to pursue that goal. To enjoy the same quality of life in retirement that you have become accustomed to during your prime earning years, you may need the equivalent of 80% or more of your final working year's salary for each year of retirement. 

Mistake #3: Fearing Stock Volatility It is true that stock investments face a greater risk of short-term price swings than fixed-income investments. However, stocks have historically produced stronger earnings over the long term. In general, the longer your investment time horizon, the more you might consider adding stock funds to your portfolio. 

Mistake #4: Timing the Market Some investors try to base investment decisions on daily price swings. But unless you have a crystal ball, "timing the market" could be very risky. A better idea might be to buy and hold investments for several years. 

Mistake #5: Failing to Diversify Investing in just one fund or asset class could subject your investment portfolio to unnecessary risk. Spreading your money over a wellchosen mix of investments may help reduce the potential for loss during periods of market volatility. Diversification may offset losses in any one investment or asset category by taking advantage of possible gains elsewhere.[1]

Now that you are aware of these five common investment errors, consider yourself lucky: You are ready to potentially benefit from other people's experiences -- without making the same mistakes. 

Advice from Employee Benefit Research Institute’s “The 2019 Retirement Confidence Survey” 2019[i]


[1] Diversification does not ensure a profit or protect against a loss in any market


[i] Employee Benefit Research Institute, "The 2019 Retirement Confidence Survey," 2019

 

2nd – Week on Wall Street

Stocks soared last week as investors anticipated that a split Congress would raise legislative hurdles to changing corporate taxes and adjusting regulatory oversight of big technology companies. 

The Dow Jones Industrial Average jumped 6.87%, while the Standard & Poor’s 500 tacked on 7.32%. The Nasdaq Composite index surged 9.01% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 7.65%.[i],[ii],[iii]

Bulls Take Charge

Coming off a poor close to October, stocks surged throughout election week, jumping higher in pre-election trading on bargain hunting and strong factory activity. The rally picked up steam as Americans went to the polls and shifted into overdrive Wednesday morning.

Investors were buoyed by Congressional results that indicate that the next president would have to work with a divided Congress. Though a divided Congress might result in a smaller potential stimulus package and continued gridlock, investors seemed to believe that was outweighed by a diminished risk of higher taxes, greater regulation, and policy initiatives that might be challenging to businesses.

Stocks took a pause to close out the week, even as a solid jobs report saw the unemployment rate fall a full percentage point to 6.9%.[iv]

Yields Gyrate

Overlooked amid the powerful rally in stock prices was the swing in yields last week. Action in the bond market is important since 10-year Treasury yields are a benchmark for setting borrowing costs for businesses and they represent another view on the strength of the economic recovery.

The 10-year Treasury note rose as high as 0.942% during after-hours trading on election evening and dropped to 0.768% by the end of normal trading hours on Wednesday.[v]

THIS WEEK: KEY ECONOMIC DATA

Thursday: Consumer Price Index (CPI), Jobless Claims. 

Friday: Consumer Sentiment.

Source: Econoday, November 6, 2020

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THIS WEEK: COMPANIES REPORTING EARNINGS

Monday: McDonald’s Corporation (MCD), Simon Property (SPG)

Tuesday: D.R. Horton (DHI), Rockwell Automation (ROK), Datadog, Inc. (DDOG)

Wednesday: Air Products and Chemicals, Inc. (APD)

Thursday: Tencent Holdings (TCEHY), The Walt Disney Company (DIS), Cisco Systems (CSCO), Applied Materials (AMAT) 

Friday: Draftkings, Inc. (DKNG)

Source: Zacks, November 6, 2020

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

[i] The Wall Street Journal, November 6, 2020
[ii] The Wall Street Journal, November 6, 2020
[iii] The Wall Street Journal, November 6, 2020
[iv] The Wall Street Journal, November 6, 2020
[v] The Wall Street Journal, November 5, 2020

 

3rd – weekly tax tip
What You Should Know About Bartering and Taxes

Even if you don’t own a business, you may occasionally trade products or services with someone else instead of paying cash. If you barter, the value of the goods or services you trade is considered taxable income. Here are some things to keep in mind:

●       Both parties in a trade must report the fair market value of the products or services they receive as income on their tax returns. 

●       Barter exchanges, organized marketplaces where members trade goods or services, are required to issue Form 1099-B, “Proceeds from Broker and Barter Exchange Transactions.” You must include the amount earned on your tax return.

●       Bartering is taxable in the year the trade occurs. Depending on your individual situation, you may owe income taxes, self-employment taxes, employment taxes, or excise taxes on your bartering income.

If you have questions about how to handle income from bartering or other sources, contact a tax professional.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov[i]

[i] https://www.irs.gov/forms-pubs/about-form-1099-b

 

4th – healthy lifestyle advice
Keeping Your Heart Rate Up (When Temperatures Are Down)

 Colder weather can steal our motivation to leave the warmth of our homes unless we have to. But your workouts don’t need to stop during the winter. Here are a few ways you can feel the burn indoors, while Mother Nature keeps it cool outside. 

●       Hop to it with a rebounder (a mini trampoline) or a jump rope. If you have neither, fake it by keeping your hands to your sides and rotate them to mimic the exercise sans equipment. 

●       Find a YouTube video or other streaming guided workout. Can’t squeeze in a full half hour at once? Pause it and return when you’re ready.

●       If you can afford it, invest in a piece of workout equipment you know you’ll use. If you run or hike, consider a treadmill with an adjustable incline. Like to ride your bike? Think about getting a stationary one. 

There are lots of ways to stay fit while winter rages on outside. But don’t forget to always make sure to discuss any medical concerns with your health care provider before beginning any fitness routine; the information provided is not a substitute for medical advice.

Tip adapted from RealSimple.com[i]

[i] https://www.realsimple.com/health/fitness-exercise/workouts/indoor-workout-alternatives

5th – Green Living Idea
Green Up Your Business 

Are you a business owner? There are quite a few things you can do to save money for your business while helping the environment.

The top thing that you can do to “green up” your business is to buy local. This trend isn’t just for the “farm to table” restaurants, either! Buying your supplies locally supports the businesses and people in your community, while reducing your supply chain’s carbon footprint.

Are you guilty of leaving your computer on when you leave the office? Shutting down your computer at the end of the day can save you an additional 50% in energy costs. Want to save another 25% on your energy bill? Turn off all equipment that’s not in use and watch your monthly bill drop.

Tip adapted from HuffPost.com[i]

[i] https://www.huffpost.com/entry/7-green-ways-to-increase-_b_13505386 


6th – quote of the week

“What you get by achieving your goals is not as important as what you become by achieving your goals.”

– Zig Ziglar

 

Make sure to visit our website, www.CortburgRetirement.com.  Our site is filled with educational videos, eBooks, publications, and financial calculators designed to help you learn more about your finances.  As you search our site, send us a note regarding any questions you may have about any particular investment concepts or products. We will get back to you quickly with a thoughtful answer.

This is Miguel Gonzalez, Retirement Specialist and Managing Partner, with Cortburg Retirement Advisors signing off for this week’s educational update.  

 

DISCLOSURES  

Opinions expressed are subject to change without notice and are not intended as investment advice or a solicitation for the purchase or sale of any security. Please consult your financial professional before making any investment decision. 

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

CRC conferred by The International Foundation for Retirement Education.

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Private Advisor Group, LLC, a registered investment advisor.  

Private Advisor Group, LLC and Cortburg Retirement Advisors, Inc. are separate entities from LPL Financial.

Investing involves risk including possible loss of principal.


Introduction
Weekly Educational Update
Week on Wall Street
Weekly Tax Tip
Healthy Lifestyle Advice
Green Living Idea
Quote of the Week
Conclusion