Now that the election has come and gone I wanted to send a note on what we should expect for the next four years and beyond. Really, these are no big predictions, but at times we may tend to forget our long-term goals in the hype and excitement of short term events.
- Expect volatility. Volatility is the norm, not the exception. Therefore, it should come as no surprise that markets will fluctuate, gyrate and generally have many ups and downs over the next four years and beyond. Think of it this way, would we expect any higher returns on our investments if markets were always calm and stable? No. Volatility is the price (risk) we pay for expected higher returns. We can diversify and maintain focus, but volatility will never go away.
- Expect change. As the saying goes, the only thing that is permanent is change. Do I know what that change is going to be? I don’t. And really, if anyone tells you that they can predict what change is going to happen, be very leery. Laws will change, processes will change and people will change. We have very little control over it.
- Expect to save, and save more. In a recent article I read the author cited a study in which retirees were asked their number one regret. No, it wasn’t that they didn’t travel enough or visit with family or friends. And no, it wasn’t spending more time recreationally. The number one regret was not saving for retirement early enough. We’ve spoken quite a bit about paying yourself first and living off of the rest. Try your best to maximize your contributions to your 401k and IRAs. For 2016 (and 2017) those maximums are $18,000 annually ($24,000 if over age 50) for the 401k and $5,500 annually ($6,500 if over age 50) for IRAs.
- Expect a bright outlook on your life. One of the few things we can control is our happiness and our attitude. Focus on the things that matter and worry less about the things that don’t. Life’s too short.
Sterling Raskie, MSFS, CFP®, ChFC®
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