December 5, 2018
2018 has been a year of change with major implications for our portfolios and financial plans. The Federal Reserve’s reversal of its dramatic decade-long easing policies began in earnest last year but has picked up speed this year. The change from declining interest rates to rising ones has done what it normally does, put pressure on financial markets. Add escalating trade tensions between the U.S. and the world’s second biggest economy, China to the picture and you can get a dramatic sell off like we did on Tuesday. The Dow fell 799.36 points, or 3.1% and the Nasdaq declined 283.09 points, or 3.8% putting the tech-heavy index in official correction territory with a 12% drop from its August 29th record.
When interest rates rise, bond prices fall so the bond markets are not providing their traditional portfolio protection role against stock market declines.
Added to this mix is the biggest tax overhaul in a generation, passed by Congress a year ago, with most provisions now in effect. According to the Wall Street Journal’s tax columnist, Laura Saunders, about 65% of filers are seeing an income tax cut while about 6% are seeing an increase.
If there was ever an appropriate time to take stock of financial plans this is it. And we couldn’t find a guest better qualified than Christine Benz, personal finance guru at Morningstar where she has been the firm’s Director of Personal Finance since 2008. Over her 25 years at the firm she has held numerous key positions, from head of the entire mutual fund analyst team, editor of key publications such as Morningstar FundInvestor and Morningstar Mutual Funds as well as written several of the firm’s best-selling investment books.
Throughout it all Benz has been dedicated to the firm’s mission, which has become her own, to help investors reach their financial goals. She has helped millions of individuals do just that.
This week she will take us through her recommended annual exercise of doing what she calls a financial “wellness check.” Plus, in our online exclusive EXTRA feature, Benz tackles one of the biggest challenges facing retirees, the cost of long-term health care.
Thank you for watching. Have a lovely weekend, a Happy Hanukkah, and make the week ahead a profitable and a productive one.