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Recessions are Painful; Expansions are Powerful

This chart comes from the Visual Capitalist. Since 1950, the average economic expansion lasts 67 months. The average recession, though painful, only lasts 11 months.

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Small- and Mid- vs. Large-Cap Stocks

As of today, small- and mid-cap stocks on a year-to-date basis are performing better than their large-cap counterparts by 3% and 2%, respectively.

There is an ebb and flow but going all the way back to 1994 small- and mid-cap stocks have outperformed large-cap stocks by an annual 0.66% and 1.49%, respectively. Financial theory supports, and so far this year it is also true, that when you add them to your portfolio they lower your risk due to the additional diversification.

Since this follows our motto of obtaining the “highest returns, for the least amount of risk,” we include small- and mid-cap stocks in all our portfolios.

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The "Chiclets Chart"

One of our clients calls this the “Chiclets Chart” because of its resemblance to that classic brand of candy-coated chewing gum.

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Active vs. Passive Funds

Today’s chart from Morningstar shows annual net flows into passive funds (in purple) vs. active funds (in orange), and their dominance for the last 11 years.

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8 Qualifications to Meet SBA 7(a) Loan Requirements

The U.S. Small Business Administration (SBA) helps small businesses lock in funding by setting guidelines for loans and reducing lender risk. SBA loan programs provide financial support to small businesses by helping build capital, recover from disasters, purchase real estate, and more.

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What’s the Difference Between a Will and a Trust?

Estate planning is an important subject that almost everyone—but especially older people—needs to address. Many believe that estate planning is for those with substantial means. However, estate planning determines how an individual’s assets are preserved, distributed, and managed, so even people with assets limited to a residence, bank accounts, and a retirement plan need to form a plan. 

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The Answers to 4 Frequently Asked Questions About Roth IRAs

If you have typed your questions about Roth IRA retirement plans into Google, you have most likely come across articles from the IRS that detail the retirement plans in ways that aren't exactly reader friendly. 

Sometimes, the easiest way to understand Roth IRA retirement plans is to have a question and answer session with a knowledgeable source. Consider this blog post one of those “conversations.” 

Here are four frequently asked Roth IRA questions and answers.

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37 Years of Retirement

Today’s chart from BlackRock shows that from 1940 to 2015 life expectancy went up 15 years and the average years spent in retirement went from six to 37.

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May 2022 Market Update

Below are a couple of my thoughts on the market. 

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Top Heavy = Top Losses

This chart is from today’s Wall Street Journal. Because of their heavy weights in the S&P 500 index, eight companies make up half of the stock market’s 14% decline year to date. It is notable that the value index was only down 3%, while the technology-heavy growth indexes are down 25%. As usual, the S&P 500, which includes both, splits the difference.

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