Blog - Page 9 of 71 - NorthStar Capital Advisors

Kintsugi: How adversity can unlock growth.

This year has been difficult for many of us, often in ways we could never have anticipated.

Some of us might even feel shattered.

But often, when we put ourselves back together, we’re stronger for it.

We made a short video showing how you can reflect on this year and discover how you’ve grown (or are still growing) as you put the pieces of 2020 together and consider your next steps.

You can watch it here.

Click to watch it here.

Transcription:

Hello, I’m Dr. Chris Mullis with NorthStar Capital Advisors and I’m here to help put this year’s adversity into perspective and learn from it.

Recently I’ve been thinking about a Japanese art called Kintsugi. Have you heard of it? When a piece of pottery becomes broken, the artist puts the pieces back together using gold lacquer. This results in a unique work of art that’s far more striking than the original, unbroken version. At its core is the philosophy that scars and imperfections shouldn’t be hidden, they should be embraced and highlighted to create something more beautiful than before.

I think we can learn a lot from that philosophy. Especially this year.

I don’t know your circumstances as you watch this video. Maybe the life you thought you were living is in pieces around you. Maybe you’re just getting by. Maybe this year was your time to shine.
Wherever you are, I’d like you to take a few minutes to reflect on the lessons you can take from your experiences this year.

Why? Because hard times can teach us so much about ourselves if we take time to stop and think.

Here are five questions I’d like you to consider.

Question #1 — What “fell apart” for me this year?

While for some of us it may be tempting to just say “everything,” really take a moment to list the plans that were canceled, opportunities that were lost, relationships that changed, and so on.

Question #2 — How did I adapt to the things outside my control?

Maybe you planned a zoom wedding. Maybe you stopped working to stay home with kids or elderly parents. Maybe you re-examined your spending or decluttered your house. Or maybe you broke down. All answers are OK.

Question #3 — What did I learn that surprised me?

Did you discover a new passion for cooking? Did you learn new things about your friends and family? Did you discover that you actually miss spending time in the office? Any surprise, good or bad, can make the list.

Question #4 — How have I grown from these experiences?

Maybe you’ve questioned some long-held beliefs or shifted your priorities. Or perhaps you found strength you didn’t know you had. Reflect on the many ways you’ve become more resilient this year.

Finally, Question #5 — What am I grateful for?

Gratitude and thankfulness are so important. Especially during the tough times. Research consistently shows that people who actively notice and express the things that make them grateful are much happier. So give it a shot. No matter how big or small, list the things you’re grateful for.

I’ll start. I’m so grateful for my family and particularly my wife Rita. I couldn’t have gotten through this year without them. I’m also grateful for my clients and my friends. And I’m grateful for you, taking the time to watch this video.

When a cup shatters on the floor, we can’t put it back together exactly as it was before. But we can accept and embrace its history — and make something better and stronger with the broken pieces.
Whether you’ve felt more like the shattered cup or the shining gold lacquer this year, consider the ways you’ve grown from the experience and how you’ll use them to become stronger.

You may be in the middle of a growing pain right now. If there is anything I can do to help you make sense of your current situation or make a new plan for moving forward, please reach out anytime. I’m here to give you a hand if you need one.

Thank you and be well.

What Issues Should You Consider Before the End of the Year?

The end of the year provides a number of financial planning opportunities and issues. These include tax planning issues, issues surrounding investment and retirement accounts, charitable giving, cash flow & savings, and insurance & estate planning issues.

We use the checklist below to proactively scan for many actionables to help serve our clients. In this checklist, we cover a number of planning issues that you need to consider prior to year-end to ensure you stay on track, including:

Various issues surrounding your investment and retirement accounts including matching capital gains against any investment losses in taxable investment accounts and ensuring that all Required Minimum Distributions (RMDs) are taken.
Tax planning issues including moves dependent upon your prospects for higher or lower income in the future. You will also want to review where you sit relative to your tax bracket as this is a good time to make moves to fill out your tax bracket for the current year that also might prove beneficial down the road.
For those who are charitably inclined there are several strategies that will also help reduce your tax liability that can be considered based upon your situation.
For those who own a business, tax reform has created some opportunities surrounding pass-through income from your business to your personal return. Accelerating or deferring business expenses presents another solid planning opportunity.
It’s wise to review your cash flow situation as you near year-end to see if you can fund a 529 plan for children or grandchildren or to see if you can save more in an HSA or employer-sponsored retirement plan like a 401(k).

This is a comprehensive checklist of the types of year-end planning issues that you should be discussing with your financial advisor to ensure you maximize cash flow and tax opportunities in the current year and beyond.

Issues You Should Consider Before the End of YearASSET & DEBT ISSUES

Do you have unrealized investment losses?
If so, consider realizing losses to offset any gains and/or write off $3,000 against ordinary income.

Do you have investments in taxable accounts that are subject to end-of-year capital gain distributions?
If so, consider strategies to minimize tax liability.

Did you reach your Required Beginning Date, or are you taking an RMD from an inherited IRA?
If so, under the CARES Act, RMDs are waived for 2020.

TAX PLANNING ISSUES

Do you expect your income to increase in the future?
If so, consider the following strategies to minimize your future tax liability:
– Make Roth IRA and Roth 401(k) contributions and Roth IRA conversions.
– If offered by your employer plan, consider after-tax 401k contributions.
– If over age 59.5, consider accelerating IRA withdrawals to fill up lower tax brackets.

Do you expect your income to decrease in the future?
If so, consider strategies to minimize your tax liability now, such as Traditional IRA and 401(k) contributions instead of contributions to Roth accounts.

Do you have any losses for this year or carryforwards from prior years?
If so, consider the following:
– There may be tax-loss harvesting opportunities.
– You may be able to take the loss or use the carryforward to reduce taxable income by up to $3,000.

Are you on the threshold of a tax bracket?
If so, consider strategies to defer income or accelerate deductions and strategies to manage capital gains and losses to keep you in the lower bracket. Consider the following important tax thresholds:
– If taxable income is below $163,300 ($326,600 if Married Filing Jointly [MFJ]), you are in the 24% percent marginal tax bracket. Taxable income above this bracket will be taxed at 32%.
– If taxable income is above $441,450 ($496,600 if MFJ), any capital gains will be taxed at the higher 20% rate.
– If your modified adjusted gross income (MAGI) is over $200,000 ($250,000 if MFJ), you may be subject to the 3.8% Medicare surtax on the lesser of net investment income or the excess of MAGI over $200,000 ($250,000 if MFJ).
– If you are on Medicare, consider the impact of Medicare’s Income-Related Monthly Adjusted Amount (IRMAA) surcharges.

Are you charitably inclined and want to reduce taxes?
If so, consider the following:
– For 2020, the CARES Act created a $300 above-the-line deduction for contributions to certain qualifying charities. This can help reduce AGI for taxpayers claiming the standard deduction.
– If you expect to take the standard deduction ($12,400 if single, $24,800 if MFJ), consider bunching your charitable contributions (or contributing to a donor-advised fund) every few years which may allow itemization in specific years.

Will you be receiving any significant windfalls that could impact your tax liability (inheritance, Restricted Stock Units vesting, stock options, bonus)?
If so, review your tax withholdings to determine if estimated-payments may be required.

Do you own a business?
If so, consider the following:
– If you own a pass-through business, consider the Qualified Business Income Deduction eligibility rules.
– Consider the use of a Roth vs. Traditional Retirement plan and its potential impact on taxable income and Qualified Business Income.
– If you have business expenses, consider if it makes sense to defer or accelerate the costs to reduce overall tax liability.
– Some retirement plans, such as a Solo 401(k), must be opened before year-end.

Have there been any changes to your marital status?
If so, consider how your tax liability may be impacted based on your marital status as of December 31st.

CASH FLOW ISSUES

Are you able to save more?
If so, consider the following:
– If you have an HSA, you may be able to save $3,550 ($7,100 for a family) and an additional $1,000 If you are over the age of 55.
– If you have an employer retirement plan, such as a 401(k), you may be able to save more but must consult with the plan provider as the rules vary as to when you can make changes.
– For 2020 the maximum salary deferral contribution is $19,500, plus the catch-up contribution if over the age of 50 of $6,500 per year.

Do you have a 529 plan? If so, consider the following:
– You can contribute up to $15,000 ($30,000 if a joint gift is made) each year without filing a gift tax return.
– Alternatively, you can elect the Five Year Accelerated Gift of $75,000.

INSURANCE PLANNING ISSUES

Will you have a balance in your FSA before the end of the year?
If so, consider the following options your employer may offer:
– Some companies allow you to roll up to $550 in your FSA account over the previous year.
– Some companies offer a grace period up until March 15th to spend the unused FSA funds.
– Many companies offer you 90 days to submit receipts from the previous year.
– If you have a Dependent Care FSA, check the deadlines for unused funds as well.

Did you meet your health insurance plan’s annual deductible?
If so, consider incurring any additional medical expenses before the end of the year at which point your annual deductible will reset.

ESTATE PLANNING ISSUES

Have there been any changes to your family, heirs, or have you bought/sold any assets this year?
If so, consider reviewing your estate plan.

Are there any gifts that still need to be made this year?
If so, you can make gifts up to $15,000 ($30,000 if a joint gift is made) per year to an individual without filing a gift tax return.

OTHER ISSUES

Do you have children in high school or younger who plan to attend college?
If so, consider financial aid planning strategies, such as reducing income in specific years to increase financial aid packages.

Good stuff in 2020?

It’s been a long journey to reach this election day and, if you’re like me, you’re plenty tired of the relentless politicking.

Case counts are rising around the country and winter is coming (34F overnight here in the Queen City of Charlotte).

A stimulus deal to help the folks who are scraping by seems stalled.

Markets are down (and up and down).

It’s hard to feel positive some days.

I’ve been noodling with a question I’d like to ask you.

When we take a look at 2020, it’s easy to see it as a long string of disasters, one after another.

And the last year has exacted a terrible cost. In lives cut short and dreams shattered.

But what if we look for the good stuff that happened as well?

Sometimes, it’s hard to remember the good things because they slip in quietly and often go unnoticed.

While the bad news announces itself loudly, instantly, and overwhelmingly.

What if we paused to ask: what good has come to my life because of this year?

I’ll start.

I’m grateful for the additional time spent with my wife Rita and our children. It’s so easy to get caught up in the shuffle of work, school, activities, travel, and everything else. I’m glad we had the opportunity to slow down and make each other our refuge.

I developed a new appreciation for my neighbors in SouthPark. We were all thrown together during lockdown and I’m grateful for the opportunity to have gotten to know them better (especially John in the house across the street who generously introduced me to the joys of mechanized leaf removal).

I reconnected with old astronomy and physics major friends from the University of Virginia over Zoom. We’d drifted apart over the years and I’m glad we could catch up.

I think our grand experiment in remote work is going to yield big benefits to our society.

What good things came about in your life?

Will you share them with me (chrismullis@nstarcapital.com)? I’d love to know. Hearing good news helps us all stay positive and moving forward.

Warmly,
Chris

Chris Mullis, Ph.D., CDFA®
Founding Partner

Financial Planning.
Wealth Management.
Since 2006AskNorthStar.com
(704) 350-5028

What if “the other guy” wins?

As the election draws near, we’ve been fielding a lot of questions about what will happen if “the other guy” wins. We made this short video talking through what you need to know.

You can watch it here.

Click to watch it here.

How SCAMS Fool Smart People & How to Avoid BEING TAKEN

DO YOU THINK YOU’RE TOO SMART TO BE SCAMMED?

About 4 out of 5 people say yes.¹ Most also believe they’re better than others at spotting scams.² Yet, scams work—and they’re more prevalent and profitable than ever before.³ In fact, every 15 seconds, someone’s getting scammed.⁴

Each year, that’s billions lost. Seniors alone lose at least $2.9 billion a year to con artists.⁵ And they aren’t even the most vulnerable marks. Millennials are.⁶

So, why are financial scams more rampant and lucrative than ever before? Technology and the internet have been key. They’ve given scammers a better smokescreen and a global reach. They’ve also made it easier to perpetrate mass fraud schemes.⁷

Beyond having better tools, scammers also have better prey these days. The uncertainties of the day have made it easier to manipulate and con people.⁸ After all, we’re naturally averse to uncertainty.⁹ It scares us.¹⁰ It makes us desperate for stability and impulsive when a golden opportunity seems to arise.¹¹

That’s an ideal combination for scammers. And it’s why financial fraud spiked during the pandemic, just like it did during the Great Recession of 2008.¹²

That paints a dark picture, but it’s not all bad news. If you know what modern cons look like, you can easily spot and avoid them.

What Multi-Billion Dollar SCAMS Look Like

1. IMPOSTER SCAMS

Imposter scams involve someone posing as a person you trust as a way to steal from you. They might pretend to be from the government or tech support, or a family member having an emergency. In 2019, they drained bank accounts of more than $667 million, with the average victim losing about $700.³

To spot an imposter scam, always be suspicious of out-of-the-blue callers or new online “friends” requesting wire transfers, payments by gift cards, or access to your computer. Ask for a number to call them back, then contact the agency directly to confirm what the caller told you.

2. IDENTITY THEFT

Identity thieves steal and use personal information for financial gain. About 1 in 3 Americans have been, or will be, the victims of identity theft. About 1 in 5 will be victimized more than once. Credit card fraud is the most common type of identity theft, followed by loan fraud and bank fraud.³ In 2019, child identity theft alone resulted in more than $540 million in losses.⁹

You can protect yourself against identity theft by safeguarding your personal information and records. Shred sensitive documents, regularly change your passwords, and monitor your credit report routinely. Address any suspicious charges or new accounts as soon as possible.

3. SHOPPING SCAMS

Online shopping scams offer great deals on luxury items or something for free if you pay for shipping. While some just want to steal your cash, others try to get you to click on an ad that’ll download a virus or malware to steal your information.¹⁰ In 2019, more than $136 million was lost to shopping scams.³

Avoid shopping scams by always checking out return/refund policies before making a purchase. Pay by credit card, keep receipts for online purchases, and carefully review your credit card charges each month for any suspicious activity.

4. JOB OPPORTUNITY SCAMS

These scams promise opportunities to work from home, start your own business, become a mystery shopper, and more. No matter what income opportunity is presented, they all ask for money up front.¹¹ In 2019, these scams raked in about $85 million, with the average victim losing about $1,300.³

If you’re considering a new business opportunity, avoid a scam by doing your homework. Research opportunities before giving up cash or personal info. Check for any complaints against the company presenting the offer, and always get details up front, in writing.

5. PRIZE SCAMS

You’ve just won! But you have to pay some fee or share some personal information to collect your prize. That’s how lottery and sweepstakes scams work. They try to manipulate you once you’re excited and get you to act quickly.¹² It’s how they stole more than $121 million from Americans in 2019.³

Remember, legitimate sweepstakes and lotteries never require payment for prizes you’ve already won. If you need to pay to collect a prize, it’s a scam. If someone claims to be from a legitimate company, like Publishers Clearing House, look up the company’s phone number and call for confirmation.

How to Turn the Tables on SCAMMERS & Protect Your Finances

You never know when or how you may be targeted by a scam.

Con artists can bait you at any time, and their schemes are becoming increasingly sophisticated and organized.

Some con artists are even joining respected organizations to appear more trustworthy and put a legitimate face on their schemes. Bernie Madoff is a prime example. It’s how he was able to run one of the largest Ponzi schemes in history.¹³

Yet, as tricky as financial fraudsters can be, they aren’t rocket scientists. Remember, no matter how fancy a con artist’s tricks or disguises may be, they ALL rely on the same tactics.

They stress urgency and exclusivity, emphasizing how special you are to have been selected for some opportunity or offer. They play on emotions, like fear and excitement, and they may even present themselves as experts. Above all, they always demand money or information up front before you get anything.¹⁴

Of course, some of these features aren’t exclusive to money scams. Some legitimate opportunities will be time-sensitive or require something up front.

With financial fraud, however, you can usually expect at least one big red flag—like wildly poor grammar, an out-of-the-blue notice of a winning or penalty, or a request to wire money via Western Union or MoneyGram.¹⁵

All that can be easy to overlook when you’re dazzled by an offer for the first time. These details are easier to see as red flags, though, when you take a second or third look.

So, always take your time when you’re considering any new financial offer or investment opportunity.

Ask questions, be skeptical, and seek out feedback from someone you trust.

And if you are victimized by a scam, report it to the Federal Trade Commission here or the Federal Bureau of Investigation here so authorities can take action.

As advisers, we’ve seen how easy it is for people to get swept up and swindled by financial scams, especially when economic turbulence hits. We’ve also helped my clients weigh their options, consider fresh angles, and make strategic decisions that better support their financial goals.

If you’re considering a new investment or you’re thinking of ways to scam-proof your finances, let’s talk. Call us at the number below. We’d love to hear about the opportunities or strategies you’re considering and share some helpful advice.

SOURCES

1 – https://www.getsafeonline.org/news/consumers-think-they-are-too-smart-to-be-scammed/

2 – https://www.nextgov.com/ideas/2020/05/people-think-theyre-too-smart-fall-phishing-scams/165197/

3 – https://www.ftc.gov/reports/consumer-sentinel-network-data-book-2019

4 – https://money.cnn.com/2016/09/20/news/financial-fraud-every-15-seconds/index.html

5 – https://www.aging.senate.gov/press-releases/stopping-senior-scams-efforts-to-prevent-fraud-targeting-older-americans-examined-by-senate-aging-committee

6 – https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-2017/consumer_sentinel_data_book_2017.pdf

7 – https://www.fbi.gov/investigate/organized-crime

8 – https://www.cnbc.com/2020/03/20/coronavirus-scams-on-the-rise-mimic-fraud-in-2008-financial-crisis.html

9 – https://www.experian.com/blogs/ask-experian/the-emotional-toll-of-child-identity-theft/

10 – https://www.consumer.ftc.gov/blog/2017/03/some-online-deals-charge-dont-deliver

11 – https://www.consumer.ftc.gov/features/feature-0019-business-opportunity-scams

12 – https://www.consumer.ftc.gov/articles/0199-prize-scams

13 – https://money.cnn.com/2008/12/29/news/newsmakers/zuckoff_madoff.fortune/

14 – https://onlinelibrary.wiley.com/doi/abs/10.1111/spc3.12115

15 – https://scambusters.org/scamlanguage.html

Strategy is your antidote to hysteria at T-27 days

The coronavirus is still very much with us, as is much of the economic dislocation occasioned by the resulting lockdowns. Granted, we are evidently closing in rapidly on a vaccine—indeed, a number of vaccines. But it may be quite some time yet before most of us will get access to a vaccine, and frustration may abound. Moreover, in the coming weeks we will have to go through a hyperpartisan presidential election, with a variety of voting issues we’ve never had to deal with before.

So before we’re further engulfed by these multiple unknowns, we want to take a moment to review what we as investors should have learned — or relearned — since the onset of the great market panic that began in February/March. And that ended when the S&P 500 Index regained its pre-crisis highs in mid-August.

The lessons, it seems to me, are:

No amount of study — of economic commentary and market forecasting — ever prepares us for really dramatic events, which always seem to come at us out of deep left field. Thus, trying to make investment strategy out of “expert” prognostication — much less financial journalism — always sets investors up to fail. Instead, having a long-term plan, and working that plan through all the fears (and fads) of an investing lifetime, tends to keep us on the straight and narrow, and helps us to avoid sudden emotional decisions.
The equity market went down 34% in 33 days. None of us have ever seen that precipitous a decline before — but with respect to its depth, it was just about average. That is, the S&P Index has declined by about a third on an average of every five years or so since the end of WWII. But in those 75 years, the S&P Index has gone from about 15 to where it is now. The lesson is that, at least historically, the declines haven’t lasted, and long-term progress has always reasserted itself.
Almost as suddenly as the market crashed, it completely recovered, surmounting its February 19 all-time high on August 18. Note that the news concerning the virus and the economy continued to be dreadful, even as the market came all the way back. We think there are actually two great lessons here. (1) The speed and trajectory of a major market recovery very often mirror the violence and depth of the preceding decline. (2) The equity market most often resumes its advance, and may even go into new high ground, considerably before the economic picture clears. If we wait to invest before we see unambiguously favorable economic trends, history tells us that we may have missed a very significant part of the market advance.
The overarching lesson of this year’s swift decline and rapid recovery is, of course, that the market can’t be timed — that the long-term, goal-focused equity investor is best advised to just ride it out.
These are the investment policies our clients have been following all along, and if anything, our experience this year has validated this approach even further.

A word now — really just a repetition of what we’ve said to you before — about the election. Simply stated: it’s unwise in the extreme to exit the quality equity investments you’ve been accumulating for your most cherished lifetime financial goals because of the uncertainties surrounding the election.

Aside from the self-inflicted wound of incurring capital gains taxes, your chances of getting out and then back in advantageously are historically very poor, nor can we possibly be helpful to you in attempting to do so. As we have done all year — and as we do every election year — we urge you to just stay the course.

As always, we’re here to talk any and all of these issues through with you.

Thank you, as always, for your support and your engagement. It is a privilege to know you.

The Investment Answer …simple, but not easy?

Everyone wants to know how to earn the most money with their investments. We all want that, right? Well, the answer is so simple you can scribble it on a cocktail napkin. We made a short video to share that sketch with you and to give you the answer. But be warned! There’s a paradoxical catch — “simple” doesn’t necessary mean “easy.”

Transcript:

Everyone wants to know how to earn the most money with their investments. We all want that, right? Well, the answer — The Investment Answer — is so simple you can scribble it on a cocktail napkin. That’s exactly what my friend and New York Times columnist Carl Richards has done for us in this sketch.

These are the factors that drive portfolio returns in the real world. The big circle on the left are the heavy hitters in rank order of importance. While the tiny circle in the bottom right reflects what doesn’t work.

By far the most influence is wielded by your behavior as an investor. That’s #1 by a wide margin. Do you take the long view with your investments? Do you understand that short-term volatility is normal? And, do you appreciate that pullbacks are temporary and the uptrend is permanent? The second biggest driver of returns is the percentage of stocks in your portfolio. And then what kind of stocks? Small companies have outperformed large companies over the long haul. And, value companies — those priced at a discount relative to their intrinsic value — outperform growth companies over the long term.

What’s not part of the investment answer? What’s is not a path to investing success? Marketing timing, stock picking, CNBC, and your brother-in-law’s advice.

Our team of PhDs at NorthStar Capital Advisors created this data-driven and time-tested approach for carefully managing our clients’ money. It’s formed by observation, by academic research, and by our real-world experience of successful investing over the past 14+ years.

But knowing the answer doesn’t necessarily translate to the success that we all seek. Think about our health. We all know how to live a healthy life, right? Nutrition and exercise. There’s the answer — The Health Answer — But do we faithfully practice these day in and day out, year after year?

To quote Warren Buffet, one of the greatest investors of all time, “Investing is simple, but not easy.” There’s the crucial paradox. “Investing is simple, but not easy.”

We practice the principles of long-term investing that have most reliably yielded favorable long-term results. Those principles are: planning; a rational optimism based on experience, and finally — patience and discipline. If you have any questions about “the investment answer” or that paradox of simple but not easy? We would love to hear from you.

As always, thank you for watching, we appreciate the opportunity to support your financial success, and please be well.

Climate risk (+ baby jaguar)

Need some distractions from your day? Scroll down to the bottom of this article. There’s a baby jaguar.

But first, let’s talk about climate change.

The wildfires, hurricanes, and floods we’ve seen in 2020 (on top of an already-awful global pandemic) make this an important conversation to have.

Think climate change isn’t an issue? Well, the market consensus is moving in the other direction.

Insurers, government entities, and large investors are treating climate change as a major systemic risk to financial markets.¹

Why? Because many companies and sectors are at risk from the costly heatwaves, wildfires, droughts, floods, and hurricanes that come with a warming planet.²

Do scientists agree on climate change? Yes, the vast majority of actively publishing climate scientists – 97 percent – concur that humans are causing global warming and climate change.

Most of the leading science organizations around the world have issued public statements expressing this, including international and U.S. science academies.³

So, what does climate change mean for investors?

Investors worry that climate risk could cause the prospects of certain companies to drop dramatically and ricochet throughout the financial system (much like what happened during the 2008 financial crisis).

But, unlike a global issue such as the coronavirus, the effects will play out differently around the country and the world.

Flood- or wildfire-prone areas could experience disruptions in business or find it difficult to insure homes and structures against damage.

Agriculture could be damaged by droughts and heat stress.

Already-warm areas could become too hot for comfortable habitation.

But, if the world goes all-in on sustainability too suddenly, there’s also a danger that the “transition risk” caused by new regulations or widespread shifts in energy use could also hurt markets or certain sectors of the economy.⁴

Well, what’s the good news?

There’s always hope. Many of the worst effects of climate change will play out over years and decades, not weeks and months.

There’s time for people, businesses, and governments to adapt. And humans are infinitely adaptable.

And there’s hope that the worst-case scenarios about a hotter world might not come to pass.⁵

I believe that optimism and pessimism can (and often should) co-exist.

I’m pessimistic about the climate path we’re on.

I’m optimistic that we will make the changes needed to get on the right path and steer away from the worst effects of climate change.

As a financial planner and wealth manager, I’m also staying on top of the growing body of risk models and research to help my clients chart a path through an increasingly uncertain world.

Ok, enough about climate change. Here are the distractions I promised.

Here’s a jaguar kitten learning how to swim.

And a four-year-old playing Mozart.

And a livestream of the jellyfish at the Monterey Bay Aquarium (with music!).

Deep breath. We can do this.

What do you think? Are you worried about climate change?

What do you think we should do about it?

Warmly,
Chris

Chris Mullis, Ph.D., CDFA®
Founding Partner

Financial Planning.
Wealth Management.
Since 2006AskNorthStar.com
(704) 350-5028

P.S. Markets have been volatile this month. It’s to be expected with so much uncertainty swirling about. We’ll reach out if I have anything critical to share.

¹_{https://www.nytimes.com/2020/09/08/climate/climate-change-financial-markets.html} _{https://www.nytimes.com/2020/07/21/climate/investors-climate-threat-regulators.html}

²_{https://www.spglobal.com/en/research-insights/featured/the-big-picture-on-climate-risk}

_{³https://climate.nasa.gov/faq/17/do-scientists-agree-on-climate-change/}

⁴ _{https://www.bankofengland.co.uk/knowledgebank/climate-change-what-are-the-risks-to-financial-stability}

⁵_{https://www.scientificamerican.com/article/the-worst-climate-scenarios-may-no-longer-be-the-most-likely/}

Frothy? Bubbles?

We’re not writing about cappuccinos, champagne, or bubble bath.

We’re talking stocks.

You may have noticed that the shortest bear market in history is over, and markets recently hit new record highs.

Will stocks keep going higher? Will they stay volatile?

Is another bear market around the corner?

Maybe. Maybe not.

As is pretty common in these situations, market strategists are split.

Some see a new bull market that reflects a recovering economy.¹

Others see troubling signs of a bubble that could burst.²

What could push stocks higher?

A market-ready COVID-19 vaccine or major treatment breakthrough that reignites optimism.
More government stimulus that supports consumers and businesses.
Good economic numbers that suggest we’re on the other side of the recession and the recovery continues.

What warning signs are flashing?

A rally mostly powered by tech mega stocks that isn’t reflected in the broader market.
Uncertainty around a November election that’s already contentious.
A possible “Minsky moment” market collapse fueled by the Fed’s easy money policy and unsustainable stock prices.³
Predictions of a second wave of infection that could provoke more shutdowns.

Bottom line, we can’t predict what comes next in the market and that’s okay. Why? Because it’s all short-term “noise.” History shows that all stock market declines are temporary interruptions in a perennial uptrend.

Since we no one can predict the future and no one can time the market, we’re focused on helping our clients stay fully invested which is the only sure way to capture the entirety of the market’s permanent advance. Those powerful portfolio returns over the long term are the reward for staying calm.

2020 has been the strangest year of our lives (probably yours, too), and it’s foolish to try to time markets right now — or any time for that matter. If you’re thinking about big moves or feeling anxious about what comes next, please reach out. We’ll talk through your ideas or concerns.

¹_{https://www.cnbc.com/2020/09/08/goldman-sachs-10-reasons-the-bull-market-has-further-to-run.html}

²_{https://www.cnbc.com/2020/09/07/stock-markets-cio-says-tech-bubble-not-expected-to-pop-anytime-soon.html}

³_{https://www.cnbc.com/2020/09/03/markets-are-facing-a-potential-minsky-moment-collapse-strategist-says.html}

7 Reasons Life Is Actually the Best It’s Ever Been

If you could be alive at any time in history, when would it be? Would you choose to live right now? Objectively, things aren’t easy for most of us right now. We’re facing social, economic, health, and environmental crises. With all the chaos of today, it can be tempting to lean on nostalgia and believe previous generations had it better or easier. And it can make us long for what seem like simpler times.

We may be too focused on the details to see the big picture. With a look at how far we’ve come, we can more clearly see how good we have it and how things, in many ways, really are getting better.

Consider these seven reasons life is actually the best it’s ever been.

#1 Life Expectancy

We’re living long than people have ever lived before. Worldwide, more than 3 in every 4 people live to be at least 65 years old. In the US, life expectancies for men and women have increased by more than 10 years since 1950. That’s 10 more years the generations before us didn’t have to enjoy retirement, spend time with family, and take in more of the life’s wonders.

#2 Health Care & Medicine

Progress in medicine and health care is one of the reasons we’re living longer than ever. In fact, since 1980, MRIs have been invented, smallpox was eradicated, artificial hearts were developed, and the human genome was sequenced. These and other advancements have done more than just extend the length of people’s lives. They’ve also compressed end-of-life decline, meaning people live better lives longer.

#3 Poverty & Income

Globally, poverty rates have dropped by more than 50% since 2000. In the U.S., 8.4 million people have risen out of poverty since 2014. Also promising, average earnings in the U.S. have increased nearly 20-fold since the 1950s. Adjusting for inflation, some experts say wages have grown by at least 35%, increasing Americans’ purchasing power today when compared to 70 years ago.

#4 Technology

Technological advancements have changed so much of how we live and navigate the world. Since 1950 alone, new technology has brought us credit cards, artificial intelligence, the internet, electric cars, cellphones, and GPS technology. These and other innovations have made our lives easier, safer, and better. In fact, while new tech can save time and reduce effort, it can also help save lives.

#5 Crime

Despite the headlines, over the last 25 years, crime has dropped dramatically in the U.S. Violent crime, like assault, robbery, and homicide, has fallen by more than 51% since 1993. Over the same period, property crime, like theft and fraud, has followed the same trend, dropping by more than 54%.

#6 Working Conditions

Labor conditions and laws have come a long way since the early 1900s, creating safer environments with better protections for workers. From safety regulations and wage laws to discrimination and child labor laws, U.S. workers are better protected than ever. Beyond safety, workplaces are also more diverse than ever before. In fact, the U.S. workforce has seen a surge of older workers, minorities, and women over the past 25 years.

#8 Quality of Life

Quality of life has improved sharply over the last 100 years, with astounding improvements in living standards across all socio-economic divides. In fact, the average standard of living in the U.S. today would have been envied by even the greatest rulers two centuries ago.

By most standards, we’re living longer, happier, better lives than our great-great-grandparents did.

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