Fleming Watson Financial Advisors
The Hidden Risk In Bonds

The Hidden Risk In Bonds

August 14, 2019

Recent volatility in the stock market has many investors looking for "safety". Many turn to government bonds. But is now the right time to invest in these notes? Today we'll talk about the hidden risk in bonds.

Key Concept 1:  Yield

When talking about bonds, the first key concept is yield. Yield is the return you will earn when you buy a bond. It factors in the current price, the interest rate, the date it matures, and the return of principal.
 
If you buy a bond with a 2% yield and hold it until maturity, that is the return you will realize.
 
Key Concept 2: The Relationship Between Yield and Price.
 
The second concept is the relationship between yield and price. Bond yields and bond prices are inversely related. This means when bond prices go up, yields go down. And when yields go up, prices go down.
 
Where is the Hidden Risk In Bonds?
 
Bond yields are near historic lows. And it is hard to imagine them going lower. When they increase, it could create a very difficult situation.
 
Those who buy these longer term notes will face two choices. The first is to accept a low rate of return over the next several years. The other option is to see the value of their investment decline as yields move higher.
 
If you would like to see an example of how rising yields impact bond prices, check our post at:

 

Investing in Emerging Technologies: Answering a Listener Question.

Investing in Emerging Technologies: Answering a Listener Question.

August 8, 2019

Investing in emerging technology sounds exciting.  At least one of our listeners thought so.  He submitted a question wondering how we could invest in the following areas:

  • Artificial Intelligence
  • Internet of Things
  • Blockchain

We'll share some ideas on this week's episode of What's Happening Now.

For a list of exchange traded funds which specialize in these emerging technologies, please visit the following link:  http://flemingwatson.com/investing-in-emerging-technology/

 

The Mini Correction of 2019 (so far)

The Mini Correction of 2019 (so far)

August 6, 2019

After July 26, the stock market has experienced a mini correction. And the financial media loves a big down day. They plant the seeds of the next financial Armageddon in our minds. Is it time to panic? Today we'll address the drop and tell you where we are in the big picture. 

http://flemingwatson.com/the-mini-correction-of-2019-so-far/

Mini Correction of 2019

S&P 500 YTD Total Retur

Corrections since 1980

A More Conservative Approach

A More Conservative Approach

July 31, 2019

As the stock market and the economy have continued to chug along, we felt it was time for a more conservative approach.  Today we talk about some of the steps we have taken to reduce investment risk for our clients.  

What is the Worst Month for Stocks?

What is the Worst Month for Stocks?

July 25, 2019

What's the worst month for stocks?  The answer may surprise you, it did me.  We take 2 minutes to talk about it, and why it matters.  

The Worst Month For Stocks

My guess for the worst month would have been January.  But, I would have been wrong.  The worst month has been August.  The average monthly return for August since 1994 has been -0.59%.  In fact only two months have negative returns, on average.

August is a bad month for stocks.  But that doesn't mean you should make any major decisions.  In the past 25 years,  August produced gains in the stock market 17 times.  But 8 times stocks fell during the month left their mark. 

The-Worst-Month-for-Stocks.png

 

Is This the Top of the Stock Market?

Is This the Top of the Stock Market?

July 18, 2019

The S&P 500 recently closed over 3,000 for the first time ever. And it begs the question, "Is this the top of the stock market?"  At least one large money manager thinks stocks are headed higher.  Much higher.  We talk about that on today's episode of What's Happening now.  

We have been following First Trust Portfolio's commentary for some time.  You can read their post about their increased forecast and the methodology they use, here

As most of you know, we are not in the prediction business.  And most who are, have limited success.  But it rarely stops anyone from trying.   

The stock market will either go up or down from here.  The only way we will know who guessed correctly is to wait and see.  We rarely take any of them to be reliable indicators of future performance.

We are certainly hopeful the S&P 500 passes the 3,250 mark.  But if it doesn't, we won't be surprised.

Neal Watson is a Certified Financial Planner™ Professional and a Financial Advisor with Fleming Watson Financial Advisors  He typically works with people who are planning for retirement.  Fleming Watson is a Registered Investment Advisory firm located in Marietta Ohio.  Our firm primarily serves Marietta, Parkersburg, Williamstown, St. Marys, Belpre, Vienna and the surrounding communities in Washington and Noble Counties in Ohio and Wood and Pleasants county in West Virginia.

What’s Happening Now: The New DNA Testing Scam

What’s Happening Now: The New DNA Testing Scam

July 9, 2019

There is a new DNA testing scam targeting retirees. We'll talk about how they are doing it and what you can do to protect yourself on this episode of What's Happening Now.

Consumer Level DNA Testing

Over the past few years, there has been a rise in consumer level DNA testing. It has centered around finding out where in the world your family originated. Companies like Ancestry.com and 23 and Me have made these tests readily available.

Also, 23 and Me has an option where you can find out more about certain genetic health conditions. This can help you determine if you at risk for certain hereditary diseases.

The New DNA Testing Scam

We received a notification from the Ohio Department of Insurance about a new DNA Scam. They target retirees and in some cases bribe them to complete DNA tests. And they try to convince their victims Medicare will pay for the tests.

They try to get critical information from you. They ask for your Medicare number and your Social Security number.

Except, Medicare, will only pay for the DNA test if they are medically necessary.

Sharing your Medicare or Social Security number can lead to identity theft.

Protect Yourself

Here are some steps you can take to protect yourself.

1. Consult Your Doctor.

Ask your physician if they believe a DNA test would be beneficial. If they believe it will, have them order the test. They will refer you to a reputable lab for the test. They will also be able to submit the request to Medicare.

2. Use one of the known consumer providers.

We don't have any experience with 23 and me. And we cannot attest to their services or the results they provide. But they should be able to provide you some information at a published cost. And they should be able to do it without obtaining your Social Security number.

3. Do Not Share Your Information

You should not share critical information with people you do not know and trust. When someone has information like your Social Security number and date of birth, they can do a lot of damage. Guard this information carefully annd only share it with trusted sources.

4. Check with people you know and trust.

If you get a call like this, get the name of the company, a phone number, and the name of the person calling. Then do some research. Call your family, call your doctor, call us before you proceed. Let those around you help you do the research before you jeopardize your identity. 

Neal Watson is a Certified Financial Planner™ Professional and a Financial Advisor with Fleming Watson Financial Advisors  He typically works with people who are planning for retirement.  Fleming Watson is a Registered Investment Advisory firm located in Marietta Ohio.  Our firm primarily serves Marietta, Parkersburg, Williamstown, St. Marys, Belpre, Vienna and the surrounding communities in Washington and Noble Counties in Ohio and Wood and Pleasants county in West Virginia.

 

 

What’s Happening Now - 2019 Midyear Update

What’s Happening Now - 2019 Midyear Update

July 2, 2019

The year is half over, and it is time for our 2019 Midyear Update.  If we were to describe the investment markets for the first half of this year in one word, it would simply be "Wow!"  We'll talk about how the major asset classes did in the first half. And we'll discuss some of the things which could impact the second half of the year.  We'll finish with a couple of interesting facts which give us a reason for optimism.

You can view the related post on our website here:  http://flemingwatson.com/2019-mid-year-update/

We have also updated our popular asset allocation quilt with the numbers from the first half of the year.

Neal Watson is a Certified Financial Planner™ Professional and a Financial Advisor with Fleming Watson Financial Advisors  He typically works with people who are planning for retirement.  Fleming Watson is a Registered Investment Advisory firm located in Marietta Ohio.  Our firm primarily serves Marietta, Parkersburg, Williamstown, St. Marys, Belpre, Vienna and the surrounding communities in Washington and Noble Counties in Ohio and Wood and Pleasants county in West Virginia.

What’s Happening Now: A Recession Knocking On The Door

What’s Happening Now: A Recession Knocking On The Door

June 23, 2019

If my inbox, the news headlines, and the magazine covers are any indication, a recession is knocking on the door.  If, or should we say when, it happens, it will be the first one in over a decade.  It has the potential to impact your accounts.  We'll talk about some of the things we are considering as it approaches.

To listen to this episode on our website, or ask us a question: http://flemingwatson.com/a-recession-knocking-on-the-door/

What’s Happening Now:  The New Social Security Scam

What’s Happening Now: The New Social Security Scam

June 16, 2019

Over the past few months, a new telephone scam has surfaced.  They tell you there is fraudulent activity surrounding your Social Security Number. Today we will share an actual voicemail example, and talk about how to protect yourself.

If you would like to visit the post on our website, or ask a question to be answered later, please visit: 

If you would like to email a question, please send an email to Neal Watson at neal@flemingwatson.com.