2020: Market Update

We follow many of you on social media and it has been great to see you and your families camping, fishing, boating, cycling, golfing, hiking, BBQing and hitting the beach this summer. We believe that less time spent inside watching the news and more time spent outside in the great outdoors is a wonderful prescription for improved happiness and wellbeing during a global pandemic!

Current State of the Stock Markets and your 457(b) Accounts

If you hold equities in your 457(b) account, then you have seen a dramatic increase in your account balance over the last few months as stock markets around the world continue to rebound from the impact of the global pandemic.  Twelve-month trailing returns for the DecisionPoint model portfolios are once again positive and the DOW is surging yet again today over 27,000.

You may ask how stocks could be rising when we are in the midst of a severe recession with many people out of work and economic growth that is declining.  The answer is complicated, but in the simplest of terms, the stock market is forward looking.  In other words, today’s prices often reflect expectations for the future.  The collective wisdom of millions of investors today believes that a viable COVID-19 vaccine will likely be available for the masses within 6 months and that world governments will use all fiscal and legislative tools necessary to ensure that economic activity will be allowed to thrive once this health threat has passed. 

We know you are tired of hearing us preach against ever trying to time the market, but 2020 provides us the best example yet of why market timing can do serious damage to your financial future.  We intentionally review your accounts every 6 months, and we give you our cell phone numbers because we are trying to prevent you from making bad investment decisions.  Whenever you believe you need to make an investment allocation change in your 457(b) or other investment accounts, we hope you will call us first to talk it over. 

Financial Planning Tip - Refinance your Mortgage!

We highlighted this financial planning tip several months ago, but since that time, mortgage interest rates have fallen even farther.  The 30-year rates are now around 3.0% (2.75% for VA loans).  The 15-year rates are now as low as 2.50%.  If you have not taken the time to investigate whether you can reduce your mortgage rate and monthly payments through a refinance, then we highly encourage you to do so.  We know lots of great mortgage brokers that come from the fire service community if you need a referral.

As always, please reach out if we can be of assistance! 

- Your DecisionPoint Financial Planning Team -