If you’ve been paying attention, the stock market has been on a roller coaster to start 2016 – up and way down. Investors lack confidence in future investment prospects which is leading to selloffs which in turn is leading to the decrease in the stock market. Will the stock market continue to spiral downward? And if it does, how low will it go? Of course, no one knows the answers to these questions, but if you still have money invested in the market, especially a percentage of your retirement savings, you’ve probably been warned to keep an eye on China and interest rates. The real threat to your retirement savings is not so obvious.
Because China owns $1.3 trillion of US debt, it is our single largest creditor. It’s unlikely that China would request any significant payments because this would decrease the value of the dollar which would decrease Chinese exports.
The interest rate that you need to watch is the Federal Reserve's funds rate. This is the cost your bank is charged for borrowing money from Federal Reserve banks. When the Fed increases the funds rate, it becomes more expensive for banks to borrow money from the Fed which eventually negatively affects business and causes a decrease in the stock market.
A bigger threat to your retirement than China and rising interest rates is being exposed to too much risk. Meaning, your appetite for risk does not match your portfolio allocation. You mitigate this risk by first understanding your risk personality/profile (amount of risk you can handle) and then investing your retirement funds according to your risk profile. You can use my Riskalyze Application to find out your risk personality in 2-3 minutes. I’ll receive an email that we can use to compare to your current portfolio and determine a more appropriate portfolio. Even more powerful, you can run what-if scenarios to see how your portfolio would be affected if the market tanks.
Call 214-810-5881 or use this Riskalyze link today to determine your risk profile and protect yourself from the biggest threat to your retirement savings. It’s your money . . . until you give it away.
Small Business Owners
Ray Hodges Financial Group and Paychex Payroll Services recently entered into an agreement to offer the seamless integration of your payroll and your 401(K) plan. This relationship enables you to intelligently and securely integrate, move, and report employee, payroll, and retirement data. Meaning, you no longer have to involve multiple third parties when handling your payroll and retirement plan. Call 214-810-5881 today to schedule a meeting with RHFG and a Paychex representative.
J H Talley & Associates is an accounting firm owned and operated by James H Talley, CPA and IRS registered tax preparer. If you are an individual or small business owner, J H Talley & Associates can assist withtax preparation, tax planning, bookkeeping, accounting services, estate and trust taxes. Call him at (214) 941-3800 for all of your tax and accounting needs, and be sure to tell him I referred you.
Marcus Robin, owner of AFIG, LLC www.goafig.com. AFIG is an independent insurance agency that offers auto, home, life, health, commercial, business, and motorcycle insurance. Call AFIG today at 469-461-3381 to compare your insurance rates to see if Marcus and his staff can save you money. It's your money . . . until you give it away.
Women Called Moses (WCM), www.womencalledmoses.org a non-profit organization created to provide a secure shelter for battered women and their children . Make your charitable contributions count by giving to this worthy and necessary organization.
Business Shout Out!
The following businesses are now members of my Business Advisory Council.All members have proven to be reputable, fair, and committed to delighting their customers.Please join me in congratulating them!
Nathan Lawrence Group, LLC, OUTSTANDING and PROFESSIONAL web, video/audio, video commercial, and elearning in Dallas, TX, 214-212-6161
10 Minute Oil Change, HONEST car repair in Duncanville, TX, 972-572-7800
Buddy’s Sporting Goods, goto place for uniforms, sports equipment, etc, in Duncanville, TX, 972-780-8149
Dry Clean USA, the dry cleaners that keeps me so fresh and so clean, clean, Cedar Hill, TX, 972-291-9917
·Looking for a featured speaker for your group, association, organization, small business, etc? I regularly present "10 Principles of Money Mastery", "Financial Education in the Workplace", "Social Security Maximization", and "Color of Money" to organizations just like yours. Call or email to make me your featured speaker!
NOTE: My website is under reconstruction. Stay tuned. Please forward my newsletter to your friends, family, and associates.
401(K): You Deserve More than a Sharp Stick in the Eye
One of my best friends, who is very successful, told me about an incident in his corporate career that applies to you and your 401(K). One year my friend expected a sizeable raise in salary, but when his manager performed his review and told him his increase in pay, he was extremely disappointed (ticked off to be exact). His manager saw that he was miffed at his small increase in pay, and he told him “. . . well, it certainly beats a sharp stick in the eye.”
Some of you have employers who have offered you 401(K) plans that are under performing the market and have been for five, six, and in some cases over 10 years. I met with one of these employers recently and told him, “The 401(K) plan you’re offering your employees has under performed the market 10 out of 14 years.” His reply was “Umm, I like ‘my guy’ so I’m not interested in reviewing my plan with you.” After informing another employer that her plan had under performed the market for years and might be investigated by the Department of Labor, she told me they had no plans to make any changes. Unfortunately, some of you are invested in subpar company 401(K) plans, and your company is saying, “Well, it beats a sharp stick in the eye.”
You do not have to accept subpar performance and negligent management of your 401(K). As an employee, you need to ask your retirement plan administrator: How has our retirement plan performed compared to the S&P 500?
How have the mutual funds in our plan been ranked by Morningstar, the leading provider of independent investment research?
How do the fees being charged to manage our plan compare to our industry and our peers?
You cannot afford to be passive about your retirement savings. If your employer is unresponsive, you may be eligible for an in-service withdrawal of your retirement savings. Like my Facebook page at http://facebook.com/RayHodgesFG I’ll be sharing tips for the next 30 days you can use to improve your 401(K) position.
Call me at 214-810-5881 if you want to discuss your options or if your employer wants to perform a retirement plan review. It’s your money . . . until you give it away.
Did I mention . . .
Ray Hodges Financial Group is now a licensed Investment Advisor Representative (IAR). As an IAR, I can roll over your 401(k)/IRA you left at your former employer, act as your financial consultant if you are considering a retirement buy out at your employer, and provide IRAs and Roth IRAs to individual investors.
If you are a business owner, I provide SEP IRA, SIMPLE IRA, SOLO 401(k), and SIMPLE 401(k). If you are a plan sponsor/business owner, I provide 401(k), Profit Sharing, Defined Benefit, and Cash Balance Plans. In addition, I can facilitate an ERISA 3(38) Investment Manager relationship if you are exposed to fiduciary liability.
College Bound Rewards Program
RHFG recently signed an agreement that enables clients to earn College Bound Rewards at select private universities at over 300+ colleges in 45 states which includes Austin College, Lindenwood University, Fontbonne University, Clark Atlanta University, Morris Brown College, Bradley University, and DePaul University to name just a few. The program is similar to an airlines frequent flier program in that all points/dollars accumulate FREE OF CHARGE and can be applied at any member school. Current maximum reward range is $10,800 to $44,075. Call me today for more details.