Monthly Archives: March 2017

Thoughts from Willis | Podcast Episode 4: Don’t Let Emotions Drive Your Investment Decisions

Today, we are sitting down with Jason Mishaw who is an associate wealth manager at  Willis Johnson & Associates. We are going to be discussing investment planning for clients and the emotional aspects that come with making investment decisions. What should you do when the markets go up and how should you react when the markets go down? We’ll be sharing our insights on how to eliminate fear and greed from clouding your judgment in making investment decisions. Click the player below to listen to this month’s podcast episode.

 

Please click here to read a transcript of the podcast.

 

 

At Willis Johnson & Associates, we take the time to understand you by combining employee benefits expertise and financial planning insight with the emotional elements of your life. 

 

Willis Johnson, CFP®

President and CEO

Financial Fact | President Trump’s Promise to Rebuild Deteriorating Infrastructure

Did you know that, throughout his presidential campaign, President Donald Trump promised to prioritize rebuilding America’s deteriorating infrastructure if elected? So it wasn’t surprising to see infrastructure stocks jump the second part of last year. From engineering companies to materials companies, the stocks of many companies exposed to infrastructure outperformed the S&P 500 in 2016.

 

As an example, President Trump’s campaign website also elucidated his vision of pursuing an “America’s Infrastructure First” policy and “transform[ing] America’s crumbling infrastructure into a golden opportunity for accelerated economic growth.” Trump’s website mentions transportation, water, electricity, security, and telecommunications as focus areas.

 

President Trump even puts a figure to his plans: $1 trillion worth of spending on infrastructure over the next decade, a significant investment.

 

One thing that both the business community and the political community can agree on is that America cannot afford to ignore its crumbling infrastructure anymore. But no one knows yet how much President Trump will spend on the initiative, or how the money will be spent. His $1 trillion proposal is ambitious and could hit funding hurdles. President Trump mentioned implementing tax breaks to attract capital and utilizing private sector investment to complement government spending, but this remains to be seen.

 

As the plans for infrastructure spending materialize, you should ask your financial advisor how he or she is planning to take advantage of the opportunities that could arise in the market.


Jason Mishaw, Associate Wealth Managers,Jason Mishaw, MSF

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As an associate wealth manager at Willis Johnson & Associates, Jason Mishaw is actively involved in both the Financial Planning role and the Investment Management role. On the financial planning side, he helps to implement customized financial plans for WJA clients. On the Investment Management side, under the supervision of a Senior Wealth Manager, he assesses the financial goals of WJA clients and assists in creating a customized strategy to further those goals.

 

Jason received a Master of Science in Finance at the University of Houston C.T. Bauer College of Business, a B.A. in economics and a B.S. in biochemistry and cell biology from Rice University.


 

What Nick’s Reading | Inflation Grows with Age

 Published March 10, 2017

Why it is Important to Have Growth Investments in Your Portfolio That Will Keep Up with Inflation?

 

Typically, when we discuss the correct investment strategy with our clients, the discussion comes down to selecting a long-term asset allocation for their portfolio in addition to each individual account, which is asset allocation. Some of our clients want to get really conservative as they begin to age and transition into retirement. The reason they have a tendency to get extra conservative is that they’ve heard for many years that they should have more fixed income in their portfolio as they get older. On the other hand, they might have concerns about the markets and will feel more comfortable holding onto cash.  

 

However, being too conservative can be a problem.

 

We see this problem a lot when there is an over-allocation to cash or fixed income and not enough equities. Today, I want to talk about inflation.

 

Growth in a portfolio is necessary to keep up with inflation. Too much cash and/or fixed income may leave a portfolio’s purchasing power falling further behind inflation over time. Having an appropriate allocation to equities has been shown to be one of the best ways to combat inflation, which is more of a concern for retirees than the general populace. Retirees do not have an income that is, generally, inflation-adjusted. Inflation is much higher for the elderly than for the general populace considering the fact that retirees are living off of their investments.  JP Morgan’s chart below shows the higher impact that inflation has on the elderly. Inflation for the elderly (CPI-E) is 5.5% above Headline Inflation (CPI) and 7.3% above inflation for Urban Wage Earners (CPI-W) after 30 years. This difference gets magnified to an even larger extent in high inflationary times.

 

Over time, inflation can have a massive impact on the purchasing power of a portfolio. It is important to remember this when you are choosing the right asset allocation for your portfolio. Equities are one of the best ways to combat inflation. Too much cash may impact your portfolio’s ability to keep up with inflation.

 

inflation grows with age

*CPI-E is an experimental index from BLS that is based on elderly households with the referenced individuals at age 62 and older. Headline CPI is also referred to as CPI-U, including food and energy. Graph: Based on Consumer Price Indexes, BLS, J.P. Morgan Asset Management. Data as of December 31, 2015. Table: Weightings: BLS, as of December 2011. Inflation: BLS, Consumer Price Index, J.P. Morgan Asset Management. Data represents annual percentage increase from December 1981 through December 2015 with the exception of entertainment and education, which date back to 1993. The inflation rate for the Other category is derived from personal care products and tobacco. Tobacco has experienced more than 7% inflation since 1986 but each age group only spends 0.5%-0.8% on tobacco (27%-37% of combined personal care products and tobacco), which is a lower proportion than represented in the Other inflation rate.
Investing involves risk, including the loss of principal. No investment strategy can guarantee a profit of protect against loss.

 


 

nickNick Johnson, CFA®, CFP®

 

Nick Johnson believes that financial planning is more than numbers on a balance sheet and a standardized process. People are unique and should be treated as such.

 

As Vice President and a Wealth Manager at Willis Johnson & Associates, his goal is to really get to know his clients, all the while providing a proactive approach to comprehensive wealth management. 

 


 

 

 

 

Market Update: The Markets (as of market close February 28, 2017)

Equities continued their positive trend in February as each of the benchmark indexes listed in the full update posted monthly gains. The Dow recorded 12 record highs in February and posted a monthly gain of 4.77% – its best month since November. The S&P 500 (3.72%) and Nasdaq (3.75%) each climbed over 3.50% for the month. For the S&P 500, February marked the best monthly gain since last March. Since the presidential election, investors have continued to pour money into stocks, likely in anticipation of tax cuts and policies intended to boost corporate earnings. The yield on 10-year Treasuries fell as bond prices increased with higher demand.

 

By the close of trading on February 28, the price of crude oil (WTI) was $54.00 per barrel, up from the January 31 price of $52.80 per barrel. The national average retail regular gasoline price was $2.314 per gallon on February 27, up from the January 30 selling price of $2.296 and $0.531 higher than a year ago. The price of gold climbed at the end of February, closing at $1,248.80 on the last day of the month, up from its January 31 price of $1,212.50…Click here for the full update.

Thoughts From Willis | A Guide for Your 1st Meeting With a Financial Advisor: What to Expect

 Published: March 1, 2017

3 Important Questions to Consider During the First Meeting with a Financial Advisor

 

What should you look for in a financial advisor before making a long-term commitment?

 

Meeting with a wealth manager doesn’t have to be overwhelming. Here’s how you can prep!

In today’s podcast, I sit down with Alexis Long, a CERTIFIED FINANCIAL PLANNER™ professional, to discuss what you should expect from the first meeting with a financial advisor and what you should leave with when the meeting ends. It’s important to know what to expect before stepping into this initial meeting and we want you to be prepared when you visit with any firm.

 

Please click the player below to listen to the podcast.

 



 

Please click here to read a transcript of the podcast.

 

At Willis Johnson & Associates, we take the time to understand you by combining employee benefits expertise and financial planning insight with the emotional elements of your life. 

 

 

 

Willis Johnson, CFP®

President and CEO

 

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP® in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

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