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Joe Lucey

What Is a Cryptocurrency?

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Cryptocurrencies, such as the best-known version called bitcoin, emerged in 2009 as a means to process electronic payments. As we move further away from a cash-based economy, so much of how we conduct financial transactions is based on two factors: Credit and trust.

In order to extend credit, a financial institution must trust that the consumer will pay it back. The consumer, in return, must trust that the institution will keep his or her personal data, account numbers and other financial information secure. As we have learned during the course of this transition to a cashless society, mutual trust can and is breached quite often.

That chasm is what created a new form of currency, referred to as cryptocurrency because it exists only in electronic form. Instead of trusting a financial institution to securely conduct transactions, it takes the institution – and its accompanying need to collect personal data and impose middle-man fees – out of the trade deal. Cryptocurrency is a direct, peer-to-peer electronic transaction system secured by code that only the entity on the receiving end can read and process.

The transaction is secure, instant, irreversible, anonymous and incurs no third-party transaction fees. Also note that it is not backed, controlled or overseen by any central authority, and all transactions are recorded via a central cloud-based database. Because of the level of anonymity they offer, cryptocurrencies are unfortunately often connected with illegal activity.

Walk It Off

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It seems the older we grow, the more sedate some of us become – particularly during retirement. It takes an effort to put regular, daily exercise into our routine, but the rewards are worth it. In fact, scientists report that chronic sitting can increase the risk of early death.

New research reveals that walking as little as 15 minutes every day can have a significant and positive long-term impact on health. The key isn’t speed; it’s consistency. You need to do it every day, and it doesn’t require that you go to a gym. The key is to do it. The good news is that, as with most exercise, the more you do it the more you crave doing it – and will miss it if you’re laid up for a few days.

The study involved participants aged 60 and older who were asked to exercise for 15 minutes every day. The study concluded that this simple act reduced the risk of dying by 22 percent compared to people who don’t exercise. The benefits of walking can’t be stressed enough, for physical, mental and even emotional health.  With the discovery of the clear benefits from walking just 15 minutes a day, why would most healthy adults not implement this easy and impactful change?

Benefits:

  • Reduces risk for high blood pressure and diabetes
  • Promotes weight loss
  • Increases metabolism
  • Tones muscles
  • Increases vitamin D levels
  • Relieves pain
  • Helps prevent the development of colon, breast and lung cancer
  • Strengthens bones and joints
  • Strengthens heart
  • Reduces stress
  • Boosts mood
  • Improves self-esteem

The Case for a Rising Equity Glide Path During Retirement

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Financial advisors often recommended that retiring investors transition growth assets to more conservative options. This is due to a concept called “sequence of returns.” If the financial markets decline at the beginning of retirement, an investment portfolio could be reduced to the point in which retirement income is greatly affected.

To help avoid this negative impact on retirement income, reducing high-risk securities may help minimize losses. However, many financial analysts are reassessing this traditional strategy in light of longer retirements due to today’s longer life expectancy. Because it is not uncommon for retirement to last at least 20 years – retire at age 65 and live to age 85 or longer – that is a substantial timeframe for equity growth. Retirees who have not saved enough to provide for a 20- to 30-year timeframe may need to keep a portion of their portfolio invested for growth opportunity for sustainable income.

In recent years there have been studies on the “rising equity glide path,” which refers to the strategy of positioning a post-retirement portfolio so that it starts out conservative and becomes more aggressive over time. Research has found that greater equity exposure in the later years of retirement may help offset the impact of a poor sequence of returns during the early phase of retirement.

The following analysis explores how a rising equity glide path could potentially fare in various market environments during retirement:

  • If financial markets remain stable throughout the entire retirement period, the strategy should be successful with the opportunity to provide a larger
  • If financial markets decline throughout the entire retirement, there really isn’t any equity-based allocation strategy that would produce long-term income, although a rising stock allocation would likely fare better than a more aggressive asset allocation throughout.
  • If financial markets perform well early in retirement but poorly later in retirement, the portfolio should benefit from a higher initial nest egg to produce a sustainable income. In this case, a rising equity glide path would simply yield a lower inheritance.
  • If financial markets decline early in retirement and then recover later, a rising equity glide path provides the optimum outcome; this is important given a scenario that is generally the most detrimental for retirees.

An equity glide path will increase market exposure later in life, so it’s important to consider whether or not this is an appropriate strategy given your asset base, tolerance for risk and investment timeline. It’s also important to consider risk within the context of losing money versus running out money. Retirees should work with an experienced financial advisor to determine a suitable long-term investment strategy based on individual circumstances.

Investing involves risk, including the potential loss of principal.  No investment strategy can guarantee a profit or protect against loss in periods of declining values. This information is not intended to provide investment advice. Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.

Experiences Over Possessions – Live, Love, Laugh and Save Money

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Make a list of the top 10 things you want in life that you currently have not achieved. Then make a list of the 10 most expensive things you bought over the last month. How do they align? Could you have cut back on some of your most recent purchases to help achieve one of your top priorities?

Instant gratification is one of the most basic instincts in human nature. However, focusing on the here and now can often shortchange what we achieve long term. It’s a matter of examining our priorities. For example, is it more important to you to dine out at your favorite French restaurant several times a month, or to visit Paris one day?

For many, living the “good life” doesn’t mean having it all; it’s about embracing experiences. It’s interesting that this philosophy has been embraced by the millennial generation – but in a way, it makes sense. Many of these young people came of age during the Great Recession and saw the toll that economic uncertainty took on their parents.

Lessons like these can be difficult but meaningful. They help us streamline our priorities and focus on the most important things in life. This a good strategy to pursue throughout retirement. To see if you’re on track for a more fulfilling lifestyle, consider how well you’re achieving that list of top 10 things you want during your lifetime. We’d be happy to discuss your financial goals with you and work with you to create a financial strategy using a variety of investment and insurance products that is designed to help you meet those goals; just give us a call at (952) 460­-3260.

Shopping Trends

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At this time of year, many of us are shopping the post-holiday sales. But no matter what time of year it is, the way we buy things has changed dramatically over the last decade. Sure, there are those who still enjoy the rush of finding a great in-store deal, joining the throngs of shoppers during big sale days, and ducking in and out of stores and parking lots.

But for those who don’t, alternatives abound. These range from voicing an Amazon order through a tabletop Alexa device, shopping online on their computers or using their phones or tablets to make purchases.

Some people combine their retail and online shopping resources. A recent survey found that 43 percent of mobile shoppers of electronics buy products on their phones right inside a store after searching for a better price. And nearly 70 percent of shoppers say they want retailers to offer a variety of channels to buy a product, including in-store, online, or buying online and picking up in the store.

Another new trend embraces the idea that cherished experiences are more important than physical products. These may include concerts, weekend vacations or a spa day.

In fact, since 2005, spending in restaurants and bars has grown twice as fast as all other retail spending. Even more remarkable is that 2016 was the first year ever that Americans collectively spent more money dining out than on groceries.

Investors in an Aging Bull Market

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Many investors who have participated in the eight-year bull market have done well. But those approaching retirement may wonder if it’s time to transition assets to more conservative holdings.

Here are factors to consider before making a decision about changing your portfolio: The U.S. economy and markets are still in good shape. U.S. stock valuations continue at above long-term averages, interest rates and unemployment are low and consumer confidence is high. It’s also important to remember that today’s 65-year-olds are statistically likely to live into their 80s.

Based on these factors, some investors with substantial financial resources and who are comfortable with leveraging market risk for longer-term financial goals may want to discuss with their financial advisor whether they should stay the course in their equity allocation even after they retire. Give us a call at (952) 460­-3260, and we’ll be happy to help you weigh the potential risks vs. rewards of your current strategy.

The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at info@securedretirements.com or call us at (952) 460­-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.