Before we jump into this post we know that in 5 to 10 years our starting point hardly matters.
We also know that we’re all human and we like to get off on a good start in anything that we do, especially when it’s dealing with our hard earned capital!
What follows is our belief of the best possible way to get started on good footing, and keep a positive investment allocation.
There are always outliers and unique events – this is a template, and loosely the starting point for funds entering the capital markets … but by no means a written in stone … exact map.
Let’s start with the easy
New investment dollars that came from … say the backyard … under your sofa … your overfilled emergency fund, or some other super safe and stable asset class . … almost certainly should be work into Capital Markets over time.
Depending on the situation, the amount, the time horizon … the time frame may vary from months to quarters or even longer depending on the situation to gain entrance to the Capital Markets …
A typical scenario would be to divide the time frame into equal parts and allocate over that period of time.
The goal is to take advantage of the ups and downs upon entrance into the Capital Markets ….
Funds such as 401k rollover’s, current investment portfolios that are moving from one pocket to another most certainly do not need this staggered entrance into the capital markets as they were invested already.
An accurate statement can be “If it just came out of the capital markets it can go back into the capital markets” even though it may be cash today.
Here are the gray areas
Of course there are gray areas that need judgment…
A large block of stock options sold. The funds where IN the Capital Markets but depending on the size and the situation, it may not make sense for these funds to be moved directly back into the capital markets all at once.
A sudden liquidity event such as the sale of a business – yes in essence it was in a investment that had volatility similar to the capital markets, but in most cases, risk reduction is desired and a staggered entrance along with a conservative allocation may be the best.
Inheritance..
It all depends on the form?
Some inheritance come in the form of cash … others may come in the form of investments that are already invested – again depending on the situation, it may make sense to stagger entrance, or it may be just fine to continue the allocation or even re-allocate in one swoop.
Bottom Line, there is no exact way for all situations, but there are ways to go without raising the blood pressure!
Have a Great “Good Entrance Capital Market” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
32.862841
-96.808100
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When do posts get written?
And here is Pro Rata
It will be interesting to see just how many times we view this in the future for a refresher!
July 2019 Podcast Video, Financial Planning and Capital Market Update – By John Kvale
Hello and Welcome to our July 2019 Financial Planning and Capital Market Update!
If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast format as well as Video!
Newbies –
We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!
July – 2019 Video
Financial Planning Tip (s) –
We did have a CLUE
After almost violating our own rule, here in this updated article we reviewed the reasons not to have a claim on your insurance.
With a mini water heater retiring under its own terms but leaving a small leak and also mandating repairs… it was a great time to remind ourselves and update the article – we hope you enjoy!
Ways to Electronically Access Data
In this article we review the various ways to access our electronic information and review the major differences between our New Total Vault and just regular Account View Access.
Personal Property Tax Growth Versus Assets
With multiple comments from many directions about the rising costs of personal property we set off to do an initial analysis on just why it seems personal property taxes are digging into our pockets a bit deeper.
Our findings suggest it important to take personal property taxes into consideration, especially when dealing with our Real Estate Assets.
Capital Market Comments –
It’s all about the FOMC – Federal Open Market Committee
Last month, here in great detail the FOMC, headed by Chair Jerome Powell made statements that led market participants to expect a lowering of rates – TODAY!
If they do not lower rates later today, market participants may be disappointed…. we would not, as our beliefs are that rates cuts should be used for more pronounced economic events…. if they do lower rates, it will likely not be a continued lowering, which is a great compromise for all!
Have a Great Day – Talk to you at the end of August!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
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Posted in Economy, FOMC, General Financial Planning, Insurance, Interest Rates, Investing/Financial Planning, Market Comments, Monthly Review, Podcast, Video, Why
Tagged Account View, FOMC, Interest Rates, Property Tax, Rate Decision, Rates, Vault