A few years ago, on the heels of the financial crisis of 2008-2009, I had the pleasure of attending a conference where renowned financial author, Nick Murray, was speaking. 

I still remember the core of his message: he was concerned that, due to the scars of the huge stock market meltdown, many investors were going to become solely focused on safety of principal and, in doing so, completely and regrettably forget about the risk of inflation. 

In short, he was witnessing people, in the interest of feeling better temporarily, moving all of their money into 1, 2 or 3% CDs (or even burying it in the backyard) and vowing never to go back into the markets again—all the while forgetting that if inflation went back up to 3-4% (as we know it historically often does), their real return would then become negative.

So, while we have been in an unprecedented period of very tame inflation, we always want to make sure that our clients understand the risk that comes with over-allocating to so-called “no risk” assets. 

Of course, there is no substitute for secured deposits for funds that are going to be needed for near-term and sometimes even mid-term expenses. 

But for longer-term funds, a well-designed investment portfolio will go a long way to offset the erosion of purchasing power that inflation can cause.  And with life expectancies on the rise, the need to at least keep up with inflation becomes an even more important factor to consider as we do our planning.

Up next:  Timing risk

As the amount of information that we receive continues to increase instead of decrease, we wanted to remind you that your investment information is available electronically.

CIRstatments.com is the place where you can view most of your accounts that are either held or serviced by our firm—in one place.

We believe this is another way to simplify your financial planning and reduce paper clutter.

We also offer an electronic version of this quarterly newsletter. If you would like to skip the paper copy of the newsletter or get signed up for online investment account information, a phone call to our office is all it takes. Call Susan at (815) 842-4393.

1.) Check your liquid reserves. Setting one to two years of living expenses aside in true cash instruments allows you more confidence in letting your long-term portfolio do what it’s going to do.

2.) Look at your allocation plan.Look at how your portfolio is allocated across cash and bonds and stocks. Being well diversified will be the main determinant of how your portfolio behaves.

3.) Consider your withdrawal strategy.A turbulent market is a good time to consider your withdrawal strategy and what you are spending money on. There could be areas to pull back your spending during tough markets.

4.) Mind the small stuff.Take a look at all of your investment related expenses, mind your transaction costs, and if you’re paying commissions to trade, don’t trade more than you need to.

Learn more at: http://bit.ly/4RetireeToDos (Source Morningstar.com)

When we talk about having freedom in our lives, we believe this includes having the freedom in our schedules to give our time, talents and resources, to the people, projects and organizations we care about.

Dave has taken on the role of mentoring a young man through Big Brothers and Big Sisters of Central Illinois.

According to BBBS, only one out of ten new volunteers that enroll as a “Big” is male, while the majority of children applying to be partnered with a mentor are boys being raised by a single female parent. These youngsters are ready and waiting for a man to step into this role. Being a big brother requires no special skills – just a desire to make a difference.

Call Dave to more about BBBS mentorship or visit www.bbbs.org.

Over the past year, we have been thrilled to have many clients make transitions to new homes across the country. 

While moving sometimes takes clients farther away from us, we are excited for them to start this new phase of their lives. We have every confidence that we will find ways to continue to work effectively together. That is what we are here for—to help you walk through big decisions.

We are always only a phone call away.And for those of you that are staying put, just another reminder that now is the ideal time to think about refinancing your mortgage if you haven't already done so in the past few years. Take advantage of this historic opportunity to lock in low long-term rates.  

Call us at (815) 842-4393 if you want to discuss.