When Will This Bull Market End?

by Ryan Kurtz

Just in case you haven’t been paying attention the last 3127 calendar days, we are in a bull stock market (as of September 30 measured by the S&P 500).  That means stocks have been on a steady climb and have not had a 20% drop from its highest point since 2009.  So when will this bull market end?

Before answering that question, let’s start by looking at what has really happened in the last 3127 days.

Over the last 8 years investors around the world were willing to pay more to own companies like Walmart, Apple, and Exxon.  Even though the Federal  Government shutdown briefly, terrorists attacked different places around the world,  and  we had two Presidential elections during that time period, investors as a whole have felt confident in owning stocks.  The stock market is like an auction, when you have bidders that are willing to pay more for something, you have to bid higher to get it and that is what investors have been willing to do.

So when will this bull market end?

Many economists, financial advisors, and business writers have been more than happy to give their opinions and predictions on when this may occur.  The truth be told, nobody knows.

This bull could keep running for another 8 years or the market could begin its descent tomorrow.

To keep things in perspective, let’s look at history and what we can expect to be normal.

Dow Jones Industrial Average from 1900 – 2016 (information based on Capital Group research)

-5% decline about three times a year

-10% decline about once a year

-15% decline about once every two years

-20% decline about once every 3.75 years

What is the lesson in this?

We do not know how long this bull market will last but when it does end, it is not a tragic event.  It is normal for investing into the stock market.

So what can you do?

Review your financial plan regularly and make sure you are prepared if your investments in the stock market begin to lose value.  Historically, if you were able to hold them long enough, you would have been rewarded by enjoying the next bull market that came along.  Although past results are not a guarantee of the future, this can be a comforting fact to a long term investor.

“The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” — Warren Buffett

If you are wondering if you are prepared for this bull market to end, contact us at Bare Wealth Advisors.  We would be happy to review your plan with you.

Watch Out! A Common Investment Mistake

by Ron Bare

I have had the privilege of working with hundreds of people over the years building financial and investment plans based on their goals, values, and the purpose of the wealth given to them. Looking back over 20 years of doing this, a common theme has risen to the top relating to investment decisions and long term success. It relates to how closely we make investment decisions based on a financial plan compared to making investment decisions outside of a well thought out plan.

When we make investment decisions based on a financial plan that aligns with our goals and values, a few things occur. First, we know how much is enough – a critical element in helping us live a life of contentment. Without knowing what enough to meet our goals is, we are left with accumulation without purpose. A second result of knowing our plans and goals prior to making investment decisions is that we can more easily determine what types of investments (from the endless options) are in our best interests. Most investment decisions should be determined by our values and goals, purpose for the money, timeframe, income needs, and liquidity needs.  It is also important to have a proper understanding of risk and return (most of us do not understand the definition of risk – perhaps another blog for the future).  However, many investment decisions are based on something outside of these items….

When we make investment decisions outside of a financial plan that aligns with our values, purpose, and goals, we are extremely susceptible to our emotions. A previous blog (March 2017) written about fear and greed can certainly be applicable here.  You don’t need to look far to find reasons not to invest.  Just pick up the paper or go to your favorite news website and there will be a multitude of reasons not to invest. The ironic item is whether the market is doing very well (such as a time as this) or is doing extremely poorly (remember 2008), the reasons not to invest are always there. My theory is that fear sells more than optimism and journalism wants us to read their press.  Therefore, they print fear.

On the other side of emotions is greed. Jesus said in Luke 15 “Watch out! Be on your guard against all kinds of greed; life does not consist in an abundance of possessions” (NIV) Notice the emphasis on “Watch Out!“, Jesus clearly knows we need to be on the lookout against greed and He also makes the point that life does not consist of accumulating possessions. When we have no plan and have not defined “enough”, we tend to want to accumulate more and more.  This then becomes our focus. If our focus becomes our possessions, then our investment decisions lead to speculation and an over concentration on the news, markets, and timing – which all lead back to fear. The danger of greed is that wealth begins to control our thoughts, feelings, and emotions, thereby consuming us.

True abundant life should be focused on our relationship with God, our family, and how to make the world a better place. By developing a well thought out financial plan that aligns wealth with our God-given purpose, we can make better investment decisions that honor God, impact our family and make the world a better place.

Overcoming Financial Anxiety

Financial anxiety is a feeling that many people experience.  Whether someone has a large amount of resources or a small amount, it is common to experience some level of anxiety in one’s lifetime regarding money.  So, how does one avoid experiencing this anxiety?

To begin, we have to look at the heart.  In Proverbs 4:23 Solomon writes, “Keep your heart with all diligence, for out of it spring the issues of life.”  (NKJV).  Some versions begin the verse with “Guard” instead of “Keep”.     If we are not constantly guarding our heart, we can quickly fall into the temptations and patterns of this world.  We need to transform our hearts to align with the Bible and God’s desires for our lives.

When we begin to worry, we are focusing the eyes of our heart on something other than God.  I once heard it said that worry is a form of worship whose object of worship is the future.  When we look to the future and begin to worry, we are often imagining the future without including God in the picture.  When this happens, our worry increases and we may become paralyzed with fear.

So, how do we overcome this anxiety?  One important step is to learn to give thanks in every situation.  Whether you are worried about how to make your next mortgage payment or worried about your investment accounts losing value, you can be thankful.  If you’re concerned about making your mortgage payment, give thanks that you have the opportunity to own a home.  If you’re concerned about your investment accounts losing value, give thanks for the abundance that you have and that you have money saved.

In Philippians 4, Paul writes that he has learned to be content in every circumstance.  Notice that Paul writes that he learned to be content.  This wasn’t something that came naturally to him.  He had to learn contentment.  I believe that each of us also needs to learn to be content and it’s not something that comes naturally.

In closing, my challenge to you is to invite God to search your heart and expose the sources of anxiety in your life.  As He brings these areas to light, find something to give thanks for and pray for His peace to fill your heart.

by Curtis Burkholder

Five Reasons to Have Money in a Savings Account

One financial recommendation clients sometimes think is boring and unnecessary is to have money in a savings account. We normally recommend that a working family have between three to six months of their living expenses in a savings account.  For a retired family, we recommend having up to one year of living expenses in a savings account. For a business or a nonprofit organization, we recommend they have at least one month of operating expenses in a savings account. With that in mind, here are five reasons why it makes sense to have money in a savings account:

1. For unexpected expenses

Whether you experience the loss of a job, unexpected healthcare costs, or an unexpected automobile repair, there always will be things that are unexpected financially.  If these costs are more then we can cover with our normal income, having money saved is a great way to cover these expenses.

2. To avoid borrowing

You may need a vehicle, want to go Christmas shopping, or just have some things that you want to fix up around your home.  If you don’t have money saved for these, you will need to borrow for these expenses.   By borrowing money for these expenses, you will have to pay for them over a number of months or years; and usually you will pay interest on the money borrowed. This may mean that a simple Christmas shopping trip could cost you a lot more then what you planned.

3.  To meet someone’s need by giving

Paul tells us in II Corinthians 9:8 that we should “have an abundance for every good deed”.  If your neighbor loses his job, the local fire company is having a fund drive, or your church asks you to consider helping a missionary that is in need, you can always be ready to give with money that is in a savings account.

4. Be able to take financial risks

Knowing that you have a surplus set aside in a savings account, allows you to take on the risk of losing money when initially opening a business, buying a real estate investment, or purchasing the stock of a company. Even if these investments lose value or fail, you can know that you have some stability by having money set aside in a savings account that is not at risk of being lost.

5.  God says that it’s wise to save

Proverbs 6:6-8  “Go to the ant, you sluggard; consider its ways and be wise!  It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.”

The goal for money in a savings account is for it to be safe and available. That means the money is not at risk of being lost where it’s invested and you can get to it quickly if needed.  With that in mind, here are a few places to consider saving money.

1.  Your local bank savings or money market account

2.  An online bank savings or money market account

3.  A money market mutual fund

If you have questions on how much you should set aside in a savings account or where to invest it, please give our office a call. One of our advisors would be happy to talk with you.

by Ryan Kurtz

Medicare Insurance

Medicare insurance is a topic where a fence analogy works well.  You may be on the side of the fence saying “I’m too young to be thinking about Medicare”.  If that’s the case and you don’t read further, feel free to forward this to someone who may benefit.  You could also be on this same side of fence saying “I’m not ready to admit to turning 65 and all of this insurance stuff is overwhelming”.  That response is understandable.  Age 65 is a milestone birthday and the amount of mail that you receive reminding you of that can be daunting!

The other side of the fence has all the “seasoned” Medicare beneficiaries.  You may have been on Medicare for a few years now and while you continue getting all of the marketing information each October during the Annual Enrollment Period, overall you’re satisfied with your insurance plan.  Maybe, more accurate, is you just don’t want to think about changing your plan.

Finally, we have the middle of the fence sitters.  If you’re one of these individuals you may have resigned to the fact that you are now Medicare eligible.  You have read bits and pieces of the marketing information; you’ve talked to a few friends about their insurance plan; maybe you even attended an insurance company meeting discussing those plan details.  At this point, you’re looking back and forth wishing you didn’t have to make a decision or that the decision was already made.

Regardless of where you are sitting, feel free to give us a call to discuss this part of your insurance plan.  We can help make this process clearer so you can enjoy the green pastures of Spring weather and peace of mind!

-Jim Wahlberg

Pendulum: Fear and Greed

As humans, we sometimes make financial decisions based on two powerful emotions: fear and greed. These work as a pendulum swinging back and forth from one end to the other depending on our circumstances and priorities. Both of these emotions can lead us to decisions we will likely regret.

In Matthew 24 Jesus is talking to His disciples about the end times and the picture is not pretty! This chapter is all in preparation to instruct His followers on the importance of being ready for these days and what a faithful steward will look like even in the darkest of times. This is illustrated within the same “sermon” to His disciples in Matthew 25 with the parable of the talents. Being a faithful and ready steward means NOT making decisions based on fear but rather on using all that God has given us to its maximum potential for increase. However, we need to be careful the increase does not lead us to a place of greed, envy, or want which are at the other end of the pendulum.

The parable of the talents in Matthew 25 speaks about increase for the owner’s benefit. When the owner returns the steward will give an account for how they managed resources based on their abilities. If decisions are made based on fear or greed, the steward will be punished and has to give back all the resources to the owner.  If, however, decisions are based on what the owner desires, the rewards are indescribable… “Come share in the Master’s happiness”!

I would encourage you to go back and read both Matthew 24 and 25 in one setting as this was Jesus’ teaching to His disciples just a few days prior to heading to the cross on Calvary. Jesus wants his stewards to be faithful and that means to use all of what HE has given us in a way that would benefit Him.  We’re not worry about the future or be too concerned about what we want. Be on your guard as fear and greed can easily sneak in and prevent you from sharing in the Master’s happiness!

-Ron Bare

Contrasting the World’s View and the Bible’s View of Money

What does the world say about money?  It seems to suggest that money itself can offer us success, security, and significance.  It seems to offer a promise that if we only have a little bit more, we’ll be happier.  Is this true though?  When we look around – or within – do we see money equating to these things?  Even those in the United States considered to be in poverty have 85% more wealth than the rest of the world.  And yet we are surrounded by fear, insecurity, and discontentment – far cries from success, security, and significance.

Why is this?  We believe it’s because the world doesn’t understand money, or at the least is offering false promises about it.

If you’re reading this, you most likely agree that the Bible has a lot to say about money, and provides some clear answers and solutions regarding money management.   A link to a video summarizing some of these principles is included below, and serves as a framework for how we advise clients in their own money management.  Take three minutes and watch the video produced by the Ron Blue Institute and shared to us with their permission.

Do you know of a friend or family member who may benefit from watching this video?  Feel free to pass this link to the video on to them as well.

We’re all on this stewardship journey together, no matter which step we’re at in our process.  And it’s our honor to walk this path with each of you.

Click here to view the video.

The Team at Bare Wealth Advisors

Kingdom Giving

by Ron Bare

What Does Biblical Generosity Look Like for the Average Wealthy American?

The above title applies to most everyone reading this blog – I know this is true because anyone that earns $30,000 per year is in the top 1% of the world’s wealthiest people. Just the fact that we were born in the United States and had the opportunity to be educated and have been given access to a job automatically puts us in this category. Many of us even fall into the top .3% of the world’s wealthiest (if you earn more than $60,000 per year).

1 Timothy 6: 17-18 says “Teach those who are rich in this world not to be proud and not to trust in their money, which is so unreliable. Their trust should be in God, who richly gives us all we need for our enjoyment. Tell them to use their money to do good. They should be rich in good works and generous to those in need, always being ready to share with others.”

In the Old Testament, the Jewish law commanded a 10% tithe on the first fruits of all income as well as other tithes and offerings on top of the 10 percent.  When added together these came to over 20% per year (Deut. 14:22-29). Many Christians today teach and believe in the 10% tithe as the primary objective when considering how much to give to the local church and Christian charities. While this may be a good principle to apply, when asking God to define generosity in your life, 10% should not be the end goal of our giving.

New Testament giving is similar to other parts of Jewish law in that Jesus raised the bar. Consider how Jesus taught on murder: “But I tell you that anyone who is angry with a brother or sister will be subject to judgement” (Matt. 5:22). Or consider His words on adultery: “But I tell you that anyone who looks at a woman lustfully has already committed adultery in his heart” (Matt. 5:28). Still other teachings on divorce, oaths and revenge all in Matthew 5 raise the bar on the standards God has given us.

Giving in the New Testament always centers on generosity: giving with joy and abundance. The Jewish law has been fulfilled by Jesus and many of the principles still apply, only taken to a new, higher standard. After all, “For God so loved the world that he GAVE, his one and only son,” this is the ultimate price and gift that God gave us in the death of His Son. Therefore, Biblical generosity does not focus on a percent or an amount, but has a focus on generosity, being ready to share, and a willingness to give richly to those in need and fulfill the calling on our lives – which primarily is to fulfill the great commission.

Practically, what does this mean for us? It starts by answering the question, “Who owns the money I have?” Psalms 24:1 says “The earth is the Lords and everything in it.”  If God owns all we have, then we must follow with another question: “What does God want me to do with His money?” Giving generously is a theme in the Bible and defining generosity is answered only in a relationship with God.  Only He can lead you to the answer. This answer will lead you to a life of better contentment and understanding of the Biblical truth that “It is better to give than receive” – Jesus (Acts 20:35).

Finally, Paul also tells us in Corinthians that we should “excel in our grace of giving”. To excel in any area of life we must work at it, practice, or push ourselves to new areas – whether physically, emotionally or spiritually. To excel in giving these same principles apply: we must work at it and take steps of faith to stretch ourselves. Finally, the best part of all of this is that giving generously comes with great promises! Continuing from the above 1 Timothy passage, verse 19 says: “By doing this they will be storing up their treasure as a good foundation for the future so that they may experience true life.”

Preparing for Misfortune

by Ryan Kurtz

Right in middle of the Bible, there is a book called Ecclesiastes written by one of the wisest and wealthiest men that ever lived.  His name is Solomon.  In Ecclesiastes 11:2 Solomon gives us a very useful verse that is sometimes overlooked.  It says;

Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.   

It is interesting to me that Solomon says that we do not know what misfortune will happen.  You mean we can’t predict it or see it coming?   Sometimes, we can’t.  How many people saw the dot com bubble burst coming in the late 90’s or the financial meltdown coming in 2008?  Those and a number of other times of “misfortune” are current examples of why Solomon tells us to divide our portion.

The word that is often used in the financial industry for divide is diversifying.

Let’s take a look at some of the places that people currently diversify their wealth.  None of these investments are bad places to invest, but as Solomon warns us, too much of your assets into any of these may be putting you at increased risk when “misfortune” occurs on the earth.

  • Money in the Bank – It is good to have some cash available. If your car breaks down or an unexpected expense arises, it is good to have money safe and available.

The risk to having too much cash is that you are constantly losing purchasing power to inflation.  We estimate that each year there is around a 3% increase in expenses due to inflation.  If you make 0.25% in a bank account, you are losing 2.75% of your money to inflation.  Having too much in cash sometimes can be a bad thing.

Most financial advisors recommend having 3 to 6 months of living or operating expenses in cash.  It is also advisable to have cash set aside for any purchases you may need to make in the next 3 years.

  • Real estate – Real estate has been a great long term investment. Not only can you collect income from owning real estate that someone else is using, you can increase the value of investment by the property growing in value over time.

The risk to owning real estate is the potential of the real estate market contracting or collapsing.  This has happened before and could happen sometime again.  Another risk to real estate is lack of liquidity.  If you need money and it is tied up in real estate, it could take several months or even years before you can sell it depending on the current state of the market.

Owning real estate should be done with resources that you can keep invested for the long term.  Avoid excessive amounts of debt when buying real estate and, if possible, don’t buy it all in the same location.

  • Stocks – Owning stocks has been a great investment for future growth. The risk to owning too much of one company is the potential to lose a lot of your money quickly.  A company could lose ½ of its value or more over short periods of time.

Buying stocks is often best done within mutual funds.  This way you can invest into stocks while not owning too much of any one company.

  • Mutual Funds – A great and relatively inexpensive way to invest is in a mutual fund. A mutual fund is where a number of investors pool their money together and pay someone to manage it for them.  You can use mutual funds to invest in different assets like stocks or bonds with someone else doing the work of looking for good investments for you.

A risk to owning a mutual fund is the potential loss of value of the investments that it is invested in and therefore, a loss to the investor.  Most mutual funds are not good short term investments for this reason.

  • Business – One of the places people often invest their wealth is into a business that they run or manage. Most people like investing into their business because it is what they understand and they can see firsthand how their money is being used. Sometimes they are forced to invest into their business because investing into the business may be what keeps the business going.

When possible, it is advisable to take money out of the business to invest in other businesses or real estate.  Since an income or salary often will come from a business they own or operate, it may make sense to make it a priority not to have all of your assets invested here.

So, what is the best investment to prepare for misfortune?  The best investment you can make may be to put some time and resources into putting together your own financial plan.  A financial plan will tell you which investment or combination of investments is best for you.  All of the investments listed are good ones.  A good financial plan will tell you how much you should invest into each so you are prepared when misfortune does occur on the earth.

If you need help putting together a financial plan for yourself, you are welcome to contact the Bare Wealth Advisor office to set up a meeting with one of our advisors.  We would be happy to help you.

What a Team-Based Approach Looks Like

by Jeremy Walter

As a company, we as advisors work together as one team.  Some clients realize this, others may not – and even though there is a lead advisor responsible for each relationship we have, the whole team is working together behind the scenes as a team to provide that level of service.

This is relatively unique in our industry, and I wanted to call attention to it because I feel it delivers a lot of value to each advisor and ultimately to the client we’re serving.

Practically, this means each one of us has to lay our pride and any selfishness aside and not be a lone ranger.  We don’t have separated books of business.  We formally meet every Monday as a team to discuss each planning case and review each meeting we have coming up, as well as informally during the week as other topics come up.  When clients call in, multiple team members are familiar with the case and can answer questions even if the lead advisor isn’t available.

Why do we do this?  For a number of reasons.  Chief of which, we believe that there is wisdom in a multitude of counselors (Prov. 15:22).  Combined, the advisory team has 55 years of industry experience (20, 10, 10, 7, 8).  That’s significant.  Additionally, we each have different perspectives and specialties within the planning realm – all framed by what we believe the Bible has to say about general money principles.  It also is a great way of learning from each other, and as we continue to bring new team members on they are able to see how we operate and learn new technical or biblical skills within the advice we give to clients.

This makes for a significantly better client experience – from both the prompt service of multiple team members and multiple perspectives mentioned above, as well as a confidence that we are placing their interests before the individual interest of a singular advisor and holding each other as an advisory team to that.

Speaking from a personal perspective – I regularly rely on Ron’s holistic planning perspective, Curtis’ technical planning skills, Ryan’s insurance experience, and Jim’s expertise in Medicare planning and annuities.  Without each of these team members, I’m less effective as an advisor.  With them, I’m equipped to better serve and advise each client relationship I’m personally leading.

So next time you’re chatting with one of our advisors, know that a lot of the conversation you’re being a part of was influenced by more than the person sitting in front of you.  We feel this is better for the business and, again, ultimately a better client experience.