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How to Ignore the “Noise” When Investing: Recency Bias

How much “noise” is the media pushing out to us every day? And even more important, how often does this seemingly important “breaking news” that might impact markets today, actually have a long-lasting impact a long-term results? Find out more here and learn about recency bias, just one of the many biases and habits that lead to poor investing decisions.

BFSG Shorts: Recency Bias

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

Great Expectations – Q3 2022 GDP

By:  Thomas Steffanci, PhD, Senior Portfolio Manager

The Q3 Gross Domestic Product (GDP) growth rate of 2.6% was in line with the consensus. But it was anything but normal. The increase was entirely driven by a large increase in the trade balance. Net exports surged 2.8% due to a 1.6% increase in exports of energy commodities and military hardware, and a 1.2% decrease in imports. Inventory liquidation was lower than Q2, giving a boost to GDP.  Consumer spending rose 1%, mostly in services, offsetting a decline in consumer goods purchases. Capital spending creeped up with residential investment falling for the third straight quarter.

The big market reaction to this report came from the GDP price deflator rising just 4.1%, well below the 5.3% expected, and down more than half from 9.0% last quarter. But much of this was the result of a decline in the growth of import prices due to the rising dollar. With the dollar having declined over 4% from its September 28 top, import prices are not likely to repeat their magnified impact on the GDP deflator going forward.

Bottom Line? The report, excluding the trade balance, showed little core growth in Q3 and by itself should not change the Federal Reserve’s (the Fed) thinking/forecasts for 1-2% GDP growth. The main reason the GDP print was strong is because Europe is collapsing into a recession and is now overly reliant on US energy and weapons exports. It also did little to dispel fears that the US will eventually tip into a classical recession given the aggressive steps the Fed is taking to stamp out elevated inflation.

The decline in 10-year bond yields seems to be the ongoing reaction to the Fed in becoming more aware of the liquidity strains the strong dollar has created in global currency markets, anticipating a slowdown in their rapid ascent in the Fed funds rate. Those expectations were boosted by today’s (outlier) decline in the growth of the GDP deflator. The stock market reaction highlighted these events as both energy and industrial stocks are leading the advance.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

It’s Your Money Financial & Estate Literacy – “Investment World” Replay

BFSG’s CERTIFIED FINANCIAL PLANNER™ professionals, Michael Allbee, CFP® and Paul Horn, CFP®, CPWA®, were invited to be guest speakers for the “It’s Your Money!” workshop series. For the “Investment World” session, Mike and Paul focused on how the investment world gets compensated. Learn the differences between brokers versus advisors, what does the word “fiduciary” mean, how to find an advisor, and most importantly how certain products are sold, and the way brokers/dealers are paid. Watch the replay by clicking here.

The “It’s Your Money!” workshop series is hosted by Peter Kote for his not-for-profit Financial & Estate Literacy. These workshops educate seniors to take control of their #financial, #estate, and #charitablegiving decisions.

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

Avoid Making Poor Investing Decisions: Anchoring Bias

Behavioral investing has quickly become one of the most important topics for individual investors, whether talking about their retirement accounts or brokerage accounts alike. This video discusses anchoring bias, just one of the many biases and habits that lead to poor investing decisions.

BFSG Shorts: Anchoring Bias

Disclosure: BFSG does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to BFSG’s website or blog or incorporated herein and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s). Please see important disclosure information here.

TINA SCHACKMAN – SELECTED AS ONE OF NAPA’S TOP WOMEN ADVISORS (2022)

Congrats to Tina Schackman, CFA®, CFP® for her selection as one of NAPA’s top women advisors for 2022! She’s been named to the “Captain” category – All-stars who are principals of their organization. We are so proud of you Tina!

Click here to view the Top Women Advisors: Captains (2022) NAPA list.

This year, as in years past, nominees—more than 500 of them—were asked to respond to a series of questions, both quantitative and qualitative, about their experience and practice, as well as their accomplishments, their contributions to the industry, the state of workplace retirement plans, and in what way(s) they “give back.” Those questionnaires were then reviewed and scored by a panel of judges who, over the course of several weeks, selected the women we honor today.

Disclaimer: Awards and recognitions by unaffiliated rating services, companies, and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if the Firm is engaged, or continues to be engaged, to provide investment advisory services; nor should they be construed as a current or past endorsement of the Firm or its representatives by any of its clients. Rankings published by magazines and others are generally based exclusively on information prepared and/or submitted by the recognized adviser. The Firm did not pay a fee for inclusion on this list.