Portfolio Advisors Blog

By: Andrew James (AJ) Flores, CFP®

The first wave of COVID-19 vaccinations has lifted many spirits and raised expectations for the new year.

Those shots have also inspired a sharp rise in travel bookings among folks who are hoping it will finally be safe to jump on an airplane and lounge at a luxury hotel in the spring or summer of 2021.

Since the end of January, #YOLO has been a rallying cry on internet message boards where amateur investors have driven up stock prices for video game retailer GameStop and movie theatre chain AMC. And while everyone should have opportunities to build wealth via the markets, we believe this particular group of rebels are only half-right about their investment strategy.

It’s true that “you only live once,” and you need to make the most of the financial opportunities available to you. But that’s exactly why we prefer measured, long-term financial planning to short-term speculation.

Understanding how market prices are determined can help investors stick to a long-term investment approach based in empirical evidence as opposed to following the latest trend on social media or the mainstream news. Click here to read this short article from Dimensional Fund Advisors that reminds us of the futility of trying to outguess the markets and why we should “scroll past the news on stock price spikes”. Dimensional Fund Advisors also published an additional article regarding the activity surrounding GameStop and the importance of retaining portfolio trading flexibility, which you can view by clicking here.

I think we can all agree that there are a lot of things we won’t miss about 2020. It was just the year that kept on giving (hoping you are sensing some sarcasm here). Despite the ups and downs, we want to give a nod to the disciplined investor for staying the course, sticking to your plan, and allowing markets to work for you in good times and bad. Click here to read an article from Dimensional Fund Advisors reflecting upon the events of 2020 and just how the disciplined investor benefited from such a tumultuous year in the markets.

As we enter the New Year, we at Portfolio Advisors wish you and your loved ones a healthy and prosperous 2021! In looking forward to what is in store for us in 2021, I wanted to share a quick story of what has been and will forever be our focus, YOU!

If my memory serves me correctly, I attended one of my first industry conferences for the Financial Planning Association around 2010. During this conference, I was given a bright blue wrist band that had the words Clients First engraved on it. Those words resonated with me as I thought that they clearly summed up my primary role as a financial planner/advisor. This has been my guiding principle and philosophy ever since, and it continues to influence my decisions and interactions with our clients.

In late 2020, Dimensional Fund Advisors, introduced exchange-traded funds (ETFs) complementing their existing suite of mutual funds. In September 2019, the US Securities and Exchange Commission (the SEC) adopted a new ruling (Rule 6c-11) which streamlines regulations concerning ETFs, allowing for greater flexibility in ETF management. Along with this improved flexibility, Dimensional will apply its consistent investment philosophy of providing low-cost, broadly diversified investment solutions aimed at pursuing higher expected returns across all of its investment vehicles.

Before we dive deeper into Dimensional’s ETF lineup, let’s take a closer look at ETFs themselves. Introduced to the investor market in 1993, an ETF is a collection of securities, such as stocks, that can hold hundreds or thousands of companies across various industries and sectors, which is very similar to a mutual fund. However, ETFs are listed on exchanges and can be traded throughout the day like individual company stocks. This is unlike a mutual fund that is traded and priced only once a day after market close. (Source: www.investopedia.com)

By Ken Hatfield

Congratulations are extended to AJ Flores for recently completing and passing his Certified Financial Planning course and board exam.  The designation is awarded to those that have completed rigorous course work and testing and is recognized as the standard of excellence for financial planners. 

Many folks are feeling as much anxiety about the end of this contentious presidential election as they were feeling during the long months of campaigning. It’s impossible to predict with 100% accuracy what a new president and a new Congress are going to do. That feeling of uncertainty can send out ripples through our financial and political systems until we get a clearer picture of the agenda for the next four years.

As important as elections are, we believe that a solid financial plan gives you the tools to keep improving your Return on Life no matter what’s happening with our nation’s politics. Instead of fretting about what may or may not happen starting in January, try to focus on these three areas of your life that will help you control major transitions.