The Flyer:

The purpose of this blogpost is to educate new investors and to remind seasoned investors about what they really own in their investment portfolios: equities.

A diversified portfolio that includes all facets of the world economy helps us to spread our risk around, and it encourages us to stick to our plan. It also acknowledges that there is no “right” answer. Routine savings and committed investing to a diversified portfolio that takes into consideration the quality of its holdings IS the plan. As investors, we can be easily overwhelmed by asset options. Propel advisors have spoken on that subject countless times over the years in individual client meetings, in our blogposts, on our webinars, and through our podcast. We keep talking about it because it’s true, and it’s also one of the primary ways an investor makes or loses money.

Have you ever walked into a store looking for a specific product and find a few different options? You may opt for the cheapest option because it will probably work just as well as the more expensive one. When our CPA Emily Agosto worked at a hardware store as a teenager, she saw many customers face this choice. Her store offered two hammers for sale: a cheap store brand and a superior, albeit more expensive, brand. Which one did customers typically buy? If you guessed the cheap one, you’re right. They figured the cheap hammer would get the job done for what they needed to do. After all, how much difference could there be between hammers?

Traditional retirement accounts like employer-sponsored 401(k)s are a large part of retirement savings, but there are benefits to using multiple account types. Contributing to accounts outside of your employer’s 401(k) not only gives you greater investment choice, but can free you from: age restrictions on withdrawals, administrative burdens of RMDs, and valuable tax flexibility.

In light of the recent bank closures, advisors Amanda Vaught, JD and David Vaught, CFA created a short video explaining the recent bank runs on Silicon Valley Bank and Signature Bank. They discuss:  The regulatory environment that led to their collapse, The FDIC response, What this could mean for the Fed hiking rates, and How we think investors should think of the recent news.

Social Security has gotten a lot of attention in the media recently. As a result, I answer questions from clients regularly that primarily ask, “Will Social Security exist when I retire?” The answer is yes, of course, for two main reasons: 1) The federal government owns a printing press for currency as was demonstrated spectacularly during the COVID crisis; and 2) the younger workers (which is a rather large group of people making more money than you did) are paying more into the system. Thus, it is important to be aware of the rules that surround your benefit. Too often, folks file for Social Security without doing any planning whatsoever. We cannot stress enough the importance of understanding how your benefit will impact you.