Higgins Capital Management, Inc.

Mainstream Media, How Much is Enough and Financial Concerns

The Economy:  The Mainstream Media and Donald Trump unequivocally agree on one thing: The U.S. economy is the best economy in our history and the greatest economy in the history of the planet. Financial markets wholeheartedly agree with this evaluation as shown by the relentless increase in asset prices since 2009 in general and the December 2018 lows in particular. At Higgins Capital we're less cockeyed. We see signs of a global slowdown that may be spreading to the U.S. Financial markets and many investors don't agree with our cautious view. Yet FedEx and BMW have joined the ranks of corporations suffering from slowing volumes. Corporations dislike reporting losses. So when it happens to a global shipping company, you pay more attention than to government numbers. We are back to a binary market where "risk-on" or "risk-off" has regained footing. Since the beginning of 2019 "risk-on" has been the darling. This looks and feels like a trading market not an investing market. Both Bears and prudent investors have again been beaten to the ground by Central Bank manipulation of financial markets. Additional challenges show in the conundrum of where to invest your appreciated assets if you do sell. There are a couple of sectors that show promise for the next act. Contact us. We continue to believe that right now, cash is king. Investors who have patience and an aggressive strategic plan may have a once-in-a-lifetime opportunity when the reset occurs. In the meantime, we suggest that you continue to raise cash and keep your powder dry.

Food for Thought: How much is enough? How much of a nest-egg do you need? The least examined aspect of retirement is that once you retire, your financial picture completely changes. After 30-40 years of focusing on growth, you now have to change strategy from a growth to an income machine. Retirement is no longer your parent's retirement. Unlike them, you will live for another 25-40 years in retirement; probably longer than you worked. Think about that: your nest-egg may have to last longer than you worked to accumulate it. 25-40 years with no steady income, no bonus, no cola, no promotions. 25-40 years of consistently having to make the right investment decisions. But it will be a joyous 25-40 years of carefree, never-ending play, endless travel, new cars, new homes, parties and perfect health. … and never an investment loss or a bear market.  Never a need to move the needle off the childhood dream of racing the Predator from Syracusa to Gozo with a reefer full of Peroni. If the above sounds like you, here is a prioritized list of current concerns: 

The biggest financial concerns of wealthy investors:

Concern about financial security in retirement 51%

Concern about portfolio tax strategy 46%

Concerned about a bear market 42%

Concerned about a long-term estate plan 40%

Concern about spending too much 38%

Concerned about health 38%

Concerned about college funding for children 33%

Concerned that children will grow up spoiled 31%

Concerned about keeping up with others in my circle 27%

Concerned about my disorganized personal finances 26%