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Out with the Teens; In with the Twenties.

Matthew Costigan, CFP®, CPA/PFS

01/09/2020 — Download

Technically, what has been labeled the decade of discontent doesn’t end until December 31, 2020. But you didn’t celebrate the millennium New Year’s Eve on December 31, 2000, did you? So for practical purposes let’s agree the twenty-teens are coming to a close.

We’ve seen momentous changes to the way we live during this decade. Smartphones: don’t leave home without one. Amazon Prime: it’s how we go shopping. Netflix: it’s how we watch our favorite TV shows and movies. My wife and I started the decade with no kids and end it with three happy and healthy daughters — twin 8-year-olds and a 6-year-old: talk about life changing! Looking back, I’m grateful for the changes that have added to our lives.

It has been a noteworthy decade for the financial markets as well. The S&P 500, which measures the stock performance of 500 large U.S. companies, started the decade at a measure of 1,115. It ended the year at 3230.78. The increase of 197.83 percent represents a compounded 10-year annual return of more than 11.53 percent. Given that the decade before, 2000 to 2009, saw two major market meltdowns in the dotcom bust and the so-called Great Recession, the twenty-teens by any measure provided a welcome reversal of fortunes for most investors.

U.S. equities, particularly large cap U.S. growth stocks, were a front-runner among asset classes. So going forward, should investors overweight their portfolios with the same? Consider the ubiquitous warning, “Past performance is no indication of future results.” U.S. equities have benefited from huge inflows of investors’ cash, but that is no guarantee the trend will continue for another 10 years — or even through 2020.

The Asset Management Group at HBKS® Wealth Advisors recommends a globally diversified portfolio as the best way to grow your wealth and manage risk — balancing investments in U.S. equities with non-U.S. equities and other asset classes, like real assets and fixed income. History tells us clearly that chasing past performance is inadvisable.

What piece of technology will be the next smartphone or Netflix? What asset class will be the top performer in the 2020s? When it comes to allocating investment assets, return rates and risk ratios are only part of long-term financial planning. I am optimistic about the coming decade and look forward to my role as a financial advisor developing long-term financial plans for clients driven by how they help them reach their goals. We’re here to help. For more information or to schedule a meeting to talk about your retirement savings program, call us at 724-934-8200, or email me at mcostigan@hbkswealth.com.

The S&P 500 Index consists of 500 stocks chosen for market size, liquidity, and industry group representation. It is a market-value-weighted index with each stock’s weight in the index proportionate to its market value. You cannot invest directly in an index.

The included information related to the performance of the S&P 500 was obtained from or prepared by other sources. It has not been independently verified, but was obtained from sources believed to be reliable. HBKS® Wealth Advisors does not guarantee the accuracy of this information and does not assume liability for any errors in information obtained from or prepared by these other sources.

The information included in this document is for general, informational purposes only. It does not contain any investment advice and does not address any individual facts and circumstances. As such, it cannot be relied on as providing any investment advice. If you would like investment advice regarding your specific facts and circumstances, please contact a qualified financial advisor.

Any investment involves some degree of risk, and different types of investments involve varying degrees of risk, including loss of principal. It should not be assumed that future performance of any specific investment, strategy or allocation (including those recommended by HBKS® Wealth Advisors) will be profitable or equal the corresponding indicated or intended results or performance level(s). Past performance of any security, indices, strategy or allocation may not be indicative of future results.

The historical and current information as to rules, laws, guidelines or benefits contained in this document is a summary of information obtained from or prepared by other sources. It has not been independently verified, but was obtained from sources believed to be reliable. HBKS® Wealth Advisors does not guarantee the accuracy of this information and does not assume liability for any errors in information obtained from or prepared by these other sources.

HBKS® Wealth Advisors is not a legal or accounting firm, and does not render legal, accounting or tax advice. You should contact an attorney or CPA if you wish to receive legal, accounting or tax advice.