November Newsletter
November 7th, 2018
Captain's Log


Here we are again, well into the fourth quarter of the year. It's been a crazy volatile year so far, and quite frankly I think we can anticipate more of the same next year. That leads me to what I want to discuss in this month's newsletter. October was a ridiculous month for investors with wild gyrations in the market, and obviously that makes a lot of people nervous. So, this month we're providing our readers with two AE Wealth Reports that address market volatility. These articles address what to do with invested assets, but I'd like to add my own view on retirement planning diversification. For those of you that are already JDS clients, you probably already know what I'm talking about. But for those of you that are not clients and still get our monthly newsletter, I'd like you to consider what I have to say. It's backed up by a twenty-year track record of success, and is well worth considering.

When I speak about "retirement planning diversification", I'm not just talking about having a well-diversified investment portfolio. Bottom line is this, if you're investing, then those assets are exposed to market risk. Diversification can lower your risk, but it can't get rid of it! Sorry folks, that's just the way the investment world works, and that can't be denied. So, what is true "retirement planning diversification"? In my view, it's not only diversifying your investment portfolio, but also diversifying your product choices. As we grow older, a certain amount of your assets should be guaranteed safe, in my opinion. These assets should provide things like stability, guaranteed lifetime income, reasonable liquidity, and even long-term care benefits.

To meet those goals, we need to educate folks on how to use banks & insurance companies. Everybody needs a certain amount of liquidity & safety. This is where we recommend using your local bank for savings, checking, CD's, etc. Insurance companies should be used for guaranteed insurance contracts, commonly known as life insurance, long term care, or annuity planning for safe growth and guaranteed income. It's vital in my opinion to have the right blend or diversification using all of these financial institutions in the right way to meet your retirement goals. No one strategy can do all things, so as a fiduciary it's our responsibility to know where each institution should be used.

There are numerous studies that have been done by renowned retirement analysts that bear this out. I'd be happy to forward the studies to anyone that would like to review them. All you have to do is let us know.

If you would like to discuss how some of these strategies might work as a part of your own retirement plan, if you'd  li ke your own   Chart Your Course Retirement Review , or a second opinion on your current retirement plan, then just let us know. 

And, as always, remember -  The purpose of the money dictates where you put it. 

Until Next Month,
Jim's signature
  James D. Stillman


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The Wealth Report:

Three Reasons to Diversify

To build a diversified portfolio, it is key to combine investments whose historical returns have not moved in lockstep together. For example, when stocks outperform, different types of bonds may underperform, and vice versa. This strategy helps provide the opportunity for continued growth in some portion of the portfolio with the goal of offsetting declines among other assets. If everything works according to plan, the total portfolio is less likely to suffer significant loss. 

Diversification has long been recognized as a risk-management tactic for retirement portfolios. In fact, the Employee Retirement Income Security Act of 1974 mandates that fiduciaries who manage retirement assets diversify plan investments in order to minimize the risk of extensive losses.

Here are three reasons it is a wise idea to have a diversified portfolio:

The Wealth Report:

What to Do in a Market Correction

A correction is technically defined as when the market declines by 10 percent from a recent peak. It's worth noting that corrections are a very normal part of the market life cycle. There has been at least one correction in each bull market of the last 40 years and a correction can occur in any asset class.

Investors should understand that corrections are unavoidable and to be expected. In a normal market, it is not unusual to experience at least one correction a year. However, recognize that the market hasn't been very normal recently. There hasn't been a correction in the S&P 500 index since early 2016. Prior to that, there had been nine market corrections between 2010 and 2015.

Whenever the market takes a precipitous drop, we often see emotional reactions such as fear, confusion, panic and loss of trust. Investors begin to second-guess their advisors. They make rash decisions. They might ask themselves: 

"Do I hold the right investments?" 
"Should I even be in the stock market at all?" 
"Should I just convert my entire portfolio to gold and bury it in the backyard?"

All content is intended for informational purposes only. Any guarantees are for insured products only and are dependent on the claims paying abilities of the insurer.  All investments carry some risk and you should be advised by your personal financial advisor before implementing any strategies discussed, as they are not suitable for everyone. James D. Stillman is an Investment Advisor Representative of JDS Wealth Management Corporation and AE Wealth Management. 

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