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Fact
On St. Patrick's Day the Chicago river is dyed green and has been since 1962. The first year 100 pounds of vegetable dye was released into the river and left the river green for almost a week! Now there is only about 40 pounds of dye used, keeping the river green for about 5 hours.
The Markets

Stock and bond markets rallied.

Last week, major U.S. stock indices finished higher for the 10 th time in 12 weeks. Bond markets moved higher, too, with the yield on 10-year Treasuries dropping just below 2.6 percent, reported Randall Forsyth of Barron’s . Yields on 10-year Treasuries haven’t been this low since January 2018.

The simultaneous rallies are curious because improving share prices are often an indication of a strong or strengthening economy. Improving bond prices tend to be a sign of weakening economic growth, reported Michael Santoli of CNBC .

Why are U.S. stock and bond markets telling different stories?

It may have something to do with investor uncertainty. A lot of important issues remain unsettled. The British government appears incapable of resolving Brexit issues, the United States and China have not yet reached a trade agreement, and recent economic reports have caused investors to take a hard look at the U.S. economy.

Barron’s pointed out investors appear to be hedging their bets by favoring in utilities and other stocks that have bond-like characteristics and participate in the stock market’s gains. An investment strategist cited by Barron’s explained:

“The strength in utilities reflects the attitude of investors who ‘don’t really buy the rally’…While they’re skittish, they still want to participate in the stock market rally but opt for its most conservative sector.”

We’ve seen this before with stocks and bonds, according to a financial strategist cited by Patti Domm of CNBC . “It’s a little bit of a funky correlation. We've had both things rallying, which is strange. This is what happened in 2017, when all asset classes did well. In 2018, nothing did well…I would suspect it goes away soon.”

Times like these illustrate the importance of having a well-diversified portfolio.
Gen Xers and millennials: what are your priorities?

The 2018 Insights on Wealth and Worth survey provided some startling information about the priorities of high net worth (HNW) investors. More than one-half (54 percent) indicated long-term capital appreciation was a higher priority than income generation. The other 46 percent were looking for steady income.

Let’s look at the percentages by age group:

  • Millennials: 56 percent capital appreciation / 44 percent steady income
  • Gen X: 56 percent capital appreciation / 44 percent steady income
  • Baby Boomers: 56 percent capital appreciation / 44 percent steady income
  • Silent Generation: 46 percent capital appreciation / 54 percent steady income

Millennials (ages 21 to 37), Gen Xers (ages 38 to 53), and Baby Boomers (ages 54 to 72) prioritize steady long-term income to the same extent.

Older investors, who are near or are in retirement, tend to emphasize steady long-term income because they need to maintain their standard of living in retirement. However, one of the advantages of youth is these investors have the time and flexibility to take on higher levels of risk and recover from any market downturns. In other words, younger investors prioritize capital appreciation (i.e., growth) while older investors prioritize income.

It’s important for younger investors to consider their life goals and how their finances may support the pursuit of those goals.

Weekly Focus – Think About It

“There are risks and costs to action. But they are far less than the long range risks of comfortable inaction.”
--John F. Kennedy, 35 th President of the United States






5 Steps to Increase your Financial Literacy

  • Identify your Starting Point
If you don't know where you are financially, it can be challenging to plan for where you want to be next year, fivers from now or decades down the road. Calculating your net work is the best way to gauge both your current financial health and your progress of time. Net worth is the amount by which assets exceed liabilities and can provide a wake-up call if you are off track or can be confirmation you are doing well.

  • Set your Priorities
Creating a list of your needs and wants can help you set financial priorities. Needs are things you much have in order to survive: food, shelter, clothing, healthcare and transportation. Wants, on the other hand, are things you would like to have, but aren't necessary for survival. It is best to rank your needs as well as your wants in order to clearly define where your money should go first. This applies to your goals as well.

  • Document your Spending
Most people could tell you how much money they make in a year. Fewer could state how much money they spend, however, and fewer still could explain how and where they spend it. One of the best ways to figure out your  c ash flow  – what comes in and what goes out – is to create a budget, or a personal spending plan.
A budget forces you to put down on paper all of your  income  and  expenses , a nd this can be an indispensable tool for helping you meet financial obligations now and in the future. As an added bonus, a budget can be a real eye-opener when it comes to spending choices. Many people are surprised to find out just how much money they are spending on superfluous goods and services.

  • Pay Down your Debt
Most people have debt – mortgage and auto loans, credit cards, medical bills, student loans and the like. What makes living with debt so costly is not just the interest and fees, but because it can prevent people from ever “getting ahead” with their financial goals. It can also be an emotional drain on individuals and families.
While the best strategy is to avoid getting into debt to begin with (by making practical spending choices and living within one’s means), there are strategies to pay down and get out from under the debt people have already acquired. 

  • Secure your Financial Future
Due to dire financial circumstances, many people adopt “I’ll never retire” as a retirement plan. This approach has several major flaws.
Firstly, you can’t always control when you retire. You could lose the job that you’ve held for decades, suffer an illness or injury, or be forced to care for a loved one – any of which could lead to an unplanned retirement. Secondly, saying you won't retire is often an excuse for those who don’t want to spend the time and energy to develop a real plan, or who simply don’t know how.
Learning more about your retirement options is an essential part of securing your financial future. Even if you can’t save much, every bit helps. Once you've developed a plan, you could end up making better spending choices now that you have a goal in mind.
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.

Securities offered through LPL Financial Member FINRA/SIPC.
 
* These views are those of Carson Coaching, and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named broker/dealer.
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer c oupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.

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Sources:
https://www.investopedia.com/articles/personal-finance/050714/5-articles-refresh-your-financial-literacy.asp