Thoughts on Current Market News

I think of today’s video as my “mid-newsletter” thoughts, as I want to be timely in my communication with you.

The stock and bond markets have been more prominent in the news lately, and I want to share with you my analysis.

So, is it jumping off the ledge time, or is this just a part of the cyclical nature of the markets?

Watch my video to find out my opinion.


Hi there. Mike Brady with Generosity Wealth Management, a comprehensive, full service, wealth management firm headquartered right here in Boulder, Colorado and I wanted to send out this video because there’s been a lot of news recently about the global sell off and yields and bonds and China, et cetera, and I wanted to bring you up to speed with where it is and also, just to make sure that we’re all on the same page.

The very first thing is — step away from the ledge. Everything in my opinion is going to be all right and this is a normal thing that happens. The markets are cyclical, which means they go up and they go down. Nobody really worries about things and everyone goes on with their daily lives when things are going up. When it starts to go down a little bit, people really start to freak out but it is part of the natural cycle of the market but this most recent one, I think, has been started by a number of different factors.

The first one is just some concerns about a tightening monetary policy, both in China and in the United States. Over in China, there’s a concern that they’re having a credit crunch and that money will not be loaned out in order to continue their great growth. That has really been harming a lot of the Asian markets, leading over to Europe, which is already sick and then leading to the United States and then Bernanke last week said that he is also putting out a blueprint – an outline for a tightening monetary policy or maybe not so much of a tightening one, but not as loose as it has been, which of course, leads to from that point of view, a tightening, so I’m going to put up on the screen here, if you could look at it, it is normal for there to be a intra-year decline in the unmanaged stock market indexes. That is normal and as you can see, I’ve just focused in there a little bit, and sometimes they’re double digit returns. It does not mean that the end of the year ends negative, okay, so that’s just real important that in an up and down market, things do go down at various points and I do think that this is an overreaction. That’s my opinion.

The next chart that I’ve thrown up there are historical returns by holding period and you’ll notice that in the left hand side is the one year, the range of going back many, many years, going back to 1950 that the range for one year is very high but then as we go up five year, 10 year, 20 year, the ranges have a tendency to get smaller, so the longer a time horizon, historically at least, the smaller those ranges are and it has a tendency to work itself out.

This next chart here are the stock markets since 1900 and you’ll notice that keeping the big picture in mind, there are some times great movement on the upside, sometimes on the downside as well, but you’ll also notice that those little tiny blips, et cetera, are what they are, just blips right there. I think that having a well diversified portfolio, while it does not guarantee any kind of an outcome or an absolute return one way or the other and many times, it has a tendency to go down in a generally trending market. It is appropriate for most people and if you’re my client, we of course, have talked about what portfolio and what managers might best meet you with your goals and your risk levels, et cetera.

Remember at the beginning of the year, I talked about how I felt that this was going to be a trading range type of year to two years and I was surprised by how strong things have looked over the last five to six months. Part of that is being a correction right now. You’ll also remember that I talked about China and Europe being sick and how they might spill over into the United States and I think that we’re seeing some of that right now. What’s interesting is the sharp decline in bonds, which would mean that their yield is going up and we’re just kind of quickly show you a graph there. This is the last five years of the 10-year note and in this case, down on the yield is actually good from a price point of view. Up is actually bad, so it’s kind of a funny chart in that regards. If you’ll notice that most recently it has swung up but – so that means that the price of things going down and so you know that’s just kind of what happens, you kind of see the whole chart there. It does go up and down. I don’t think that we should necessarily freak out. These things do happen but I will keep you informed as things go on.

Mike Brady, Generosity Wealth Management.

Give me a call if there’s anything that I can do to explain a little bit further. The end of the quarter is in just a few days. I’m actually doing this Monday afternoon. The market is down today. It’s very possible that the quarter will be negative, so the year-to-date, hopefully, will be positive but it’s very possible that this quarter will be negative for both the stock and the bond market, et cetera, so we’ll have to see how things turn out. If something dramatic happens later this week, I will send another video out. Otherwise, the next video you receive from me will be my quarter end review and my quarter preview for the third quarter, so anyway. Mike Brady, 303-747-6455. You have a wonderful day. We’ll talk to you later. Bye-bye.


What is Generosity Wealth Management’s Dynamic Value?

It’s been my experience that when people don’t reach their financial goals it’s not because they failed to buy stock A over stock B, or bought this mutual fund over another.

Most of the time, it’s the bigger questions they’ve failed to answer, like “am I spending more than I earn?” or “what happens if I lose my spouse?”.

What is the dynamic value Generosity Wealth Management brings to the table? A = helping clients answer and address these issues, and keep the big picture in mind.

For a full discussion of this, listen to my short video where I expand on these ideas.

Good morning. Mike Brady with Generosity Wealth Management, a comprehensive, full service, wealth management firm, headquartered in Boulder, Colorado.

Today I want to talk about the dynamic value that I bring as a professional to the relationship with my clients; or at least my philosophy of where I probably add the most value. Here it is:

Point A is today. Prospective clients come in and they usually have a point B; what their goals are in the future and most of the time that’s retirement. Of course there’s usually a point C as well which is not outliving your money. So there’s a point B, something that we’re striving for in the future and of course a point C which is a secondary goal which is not outlive their money. Where I add value is all the planning from point A to point B and of course to point C. All the decisions that are there.

Understanding and explaining with the client and working with them the interdependence of all the various variables of; the saving, the investing and when to retire. All the decisions around retirement, how much the particular portfolio supports with various assumptions, upon retirement or withdrawal. All those various decisions- because what my experience has led me to really understand is when someone has not reached their particular goal it’s usually not because they bought stock A instead stock B or they had mutual fund A instead of mutual fund B; it’s because they frankly, didn’t save enough money; they spent more. Here’s your income and here’s your expenses and the expenses were greater than the income. They just didn’t save enough. Or it’s because they had some kind of a catastrophic event along the way like the loss of a spouse, the loss of a job, the loss due to some kind of a disability; and so part of that planning process is to proactively identify and talk about what are the contingency plans that we should have that could derail the great plan that we’ve come up with together. Many times that’s trying to identify them and have a plan for them. So that’s where I think I add some of the best value in the relationship.

I do believe that just having the appropriate investment plan that’s consistent with the risk level and the tolerance and the goals of a client are absolutely essential. I don’t want to minimize that in any way; however, I do want to say that that’s kind of the sexy part that everybody likes to talk about but I think what people really should focus on is that planning and a contingency for all those things that could derail that particular plan. That’s where I add the dynamic value to the relationship.

Mike Brady, Generosity Wealth Management 303-747-6455. Hopefully you’re my client; if you’re not my client hopefully you’ll give me a call and we can talk about what that client/ advisor relationship would look like.

Mike Brady, 303-747-6455. Have a great day. Thanks, bye, bye.



Farewell 3% Mortgage Rates

Farewell 3% Mortgage Rates

farewell 3 per cent mortgage ratesMortgage rates are going back up, and will more than likely stay up.

However, they’re still very low from a historical point of view, with the normal being over 5.5%

Why the increase?

1. The Fed is going to stop bolstering the housing market

2. The economy is no longer reeling

3. 3.3% rates were unprecedented

For a deeper discussion of this, click on the link below

Farewell 3% Mortgage Rates


Financial Illiteracy

Financial Illiteracy

butterfly money and pig

Americans’ grasp of concepts such as investment risk and inflation has weakened, lower than 2009, according to research reports.

On the flip side, confidence is still high, and many people gave themselves high marks for managing their finances even as they were using payday loans or over-dawing their checking accounts.

As my video above discusses, understanding some of the “big issues” can determine the success or failure in reaching your goals.

You obviously have higher than average financial knowledge (because you’re reading my newsletter), but still let me know if I can help you or someone you know, in tackling all financial decisions.


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