September 2016 Newsletter
Non-Financial Retirement Planning
The idea of retirement has been made to mean perpetual golfing, walking along the beach with your significant other or dining at a sidewalk cafe in a perfect climate.  By contrast, we have found that the idea of retirement is very personal and it continues to evolve. More people are saying that they would like to reduce hours, rather than stop working entirely.  Interestingly, many of those who say this could easily afford to retire.
Couple Enjoying A Game Of Golf
You may have heard of our "Tuesday Test." We ask those who are planning to retire to imagine that they have been retired for six months. They wake up on a random Tuesday. What are they going to do that day? If the answer is vague, more planning for the non-financial part of retirement is needed.

If you are nearing traditional retirement, challenge yourself to think about retirement as a next chapter. The images of walking on the beach or endless golf may not match your idea of retirement. Your activities may include a reduced work schedule or no "work" at all. Perhaps you would enjoy more time helping those less fortunate. Maybe you have been wanting to write a book. Whatever it is that you want to do, you will find that the days in retirement go by quickly. That's why it is wise to plan the non-financial part of your retirement as carefully as the financial part.
S&P 500 New Sector:  Real Estate
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The S&P 500 has added an 11th sector to break out real estate from financial stocks. We think S&P 500 was right to create a new sector for real estate. Since August 2013, Golden Trail Advisers has classified real estate investment trusts into the category of "Alternative - MLP/REIT."
Market Comments

This year, stocks had the worst start in many years. We reached a low point in mid-February of -10.3%. A handful of people saw this as a buying opportunity. As of the end of August, the rebound in stocks brought the YTD figure up to +7.8%. The swing of 18.1% in a little more than six months can change investors' moods dramatically. Investors tend to feel better about investing when markets are at a peak. The old saying, "buy low and sell high," is the exact opposite of how many people feel and what many people do when investing.
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We have to remind ourselves that despite such feelings, there are right and wrong ways to manage the volatility in markets. Our advice is to set up a long-term investment plan and stick to it. Avoid the temptation to sell low and buy high. While that sounds easy, it is harder to do in practice.

Bonds have fluctuated, as well, in 2016. Interest rates gave another "head fake" early in the year. Yields climbed, but then settled back down. Bond prices move the opposite direction of yields. So when yields are at their lowest, prices are at their highest.

The conclusion we have reached is that with stocks near all-time highs and bond yields near all-time lows (meaning bond prices are near all-time highs), it is smart to include "alternative" investments in your portfolio. We have used real estate, limited partnerships, active allocation managers and long-short strategies to expand our opportunity set. We expect that at times like these, the alternative strategies may balance out potential doldrums in stocks and bonds. 
Hands joining puzzle pieces on blue background. Conceptual photo.
Why are Fixed Index Annuities Growing?
  As investors search for income, one investment has been attracting a growing share of peoples' portfolios: Fixed Index Annuities. These have been offered for a number of years, but they have been increasing in popularity because they can give investors reasonable returns without the risk of market loss.
With these investments, investors receive annual interest based on the greater of 1) a guaranteed minimum rate of interest or 2) the return from a specific stock market index (often the S&P 500), capped at a predetermined amount. Investors in fixed index annuities would do well in years in which markets are positive and would lose nothing in years when markets fall.

We can help you evaluate these kinds of investments. We perform due diligence on both the products and the firms providing the products. We have found a wide disparity between the ones we would recommend and the rest. There is certainly more to know and we are here to help you decide if a fixed index annuity could benefit you.
Brexit Update
When Great Britain voted to leave the EU, or Brexit on June 23, the result surprised many people. However, despite the initial jolt, markets have recovered and have gone on to new highs. It hardly has been the disaster that some were predicting. The truth is that no one knows what the exact impact will be when the implementation of Brexit begins next year. We suspect Great Britain and Europe will figure out a way to make it work that does not trigger an economic apocalypse.
Brexit concept - Euro and Brexit road signs with flags. 3d rendering
Recruiting Again
After two months, we realized that the person we hired as investment adviser associate was not the right fit for the position. We are once again seeking a qualified candidate for this position. He or she will handle some "back office" responsibilities, assist with client support and trading, and help with the research process. It takes a special person who cares about people, works hard, has a solid financial background, and can thrive in the ever-evolving environment of financial planning and investment advising.
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Mike Sedlak, CFP®, CFA, CEPA, MBA   |     mikes@golden-trail.com    |   Golden Trail Advisers, LLC |         630-323-1111 Phone                 |        630-323-6540 Fax             |     www.golden-trail.com