Nurturing Financial Freedom

Today, we pivot from previous discussions on bull markets to delve into the topic of inflation, especially given the recent slowing of progress according to CPI data. Ed kicks off the discussion by highlighting that although we desire a linear decrease in inflation to the FED's 2% target, achieving this without economic recession is challenging. He points out the current robust state of the U.S. e...

Today, we're discussing the current state of the market, which has seen impressive returns since last Halloween. The focus today is on the importance of maintaining discipline not just in downturns but also during strong market periods. Alex kicks off by highlighting the significant growth in the capital markets in 2023, following a challenging year. The S&P 500's substantial gains, especially in...

For most of us, we manage our investments with the goal of having a nice big nest egg when it's time to retire.  But we need to  continue  to stay invested  throughout  our retirement.  Often, investors are more afraid of running out of money than they are actually dying!  Today Alex Cabot and Ed Lambert of Birch Run Financial discuss how to lower that risk. Ed points out that psychologically, inv...

Each year, we often take a holistic look at our finances.  Today, Alex Cabot and Ed Lambert of Birch Run financial break down what you should be looking at specifically, as we begin 2024. Alex gives us six ponts to consider: If you have an advisor, review your plan and prepare for the upcoming year. Make sure your asset allocation is balanced for your goals., timeframe, and risk tolerance. Ensure...

This month, Alex, Ed, and Jag delve into the financial landscape as 2023 draws to a close. The episode, recorded on December 14, reflects on the unexpected market rally in November and the overall performance of various asset classes throughout the year. In mid-November, we discussed the possibility of peak interest rates and high portfolio returns in short periods, based on Alex and Ed's experien...

(All data in today's podcast is courtesy of FactSet). More economists are suggesting that the FED is done raising interest rates.  While it's important to note that past returns do not indicate future results, today, we look at some historical data to form an opinion of what might happen after interest rates have peaked.  Alex and Ed sent a note out to clients outlining what the performance of the...

(Data in this podcast courtesy of YCharts and FactSet) Today, Alex Cabot and Ed Lambert of Birch Run Financial dive into the residential real estate market, where interest rates have climbed, but home prices remain high. Ed begins by giving us some context. From late 2019, to late 2021, prices had risen by 29% to $423,000, and interest rates had dropped to about 3%. Why haven't home prices dropped...

Over the last 18 months, the interest rate environment has changed dramatically.  And despite all the headlines, there are actually pros and cons to higher interest rates.   Alex Cabot and Ed Lambert of Birch Run explain. First, the downside.  Alex explains how higher interest rates can slow economic growth and strain households.  First,  the impact on borrowing and investment: individuals are les...

In this episode of "Nurturing Financial Freedom,"  Alex Cabot and Ed Lambert of Birch Run Financial discuss the first half of 2023 and its impact on the economy and markets. Ed highlights the resilience of the economy despite interest rate hikes and the unexpected outperformance of growth stocks, particularly in the technology sector.  What does this mean moving forward? Alex emphasizes the import...

Money markets, CD's and bonds are paying reasonable interest for the first time in years.  Today, Alex Cabot and Ed Lambert of Birch Run Financial take us on a "crach course" on fixed income and how it works. Alex starts by explaining bonds - essentially a loan, or contract between a lender and borrower.  He also explains the three main bond categories - government, corporate, and agency.   Additi...

We have a two-part episode for you today, as we begin our fifth year of the Nurturing Financial Freedom Podcast. First, the FED raised interest rates by 0.25% on May 3rd.  Are they finally done raising rates?  Ed Lambert of Birch Run Financial wades into that question.  Are more hikes coming, and if so, will they be small or large?   We look at the current state of the economy and where we believe...

We celebrate 4 years of the Nurturing Financial Freedom Podcast with our 48th episode today. Thank you for listening!   As we reflect on the first quarter of 2023, we will do a recap of the markets (data courtesy of YCharts ), as well as reflect on some of the headlines and lessons learned so far this year.   Alex starts us off by looking back at the markets, which were largely positive in 2023, a...

As hard as this is to believe, the COVID-19 pandemic started three years ago.  Today, Ed Lambert and Alex Cabot look back at the economy and capital markets over that period.  Interestingly, both are close to where they'd have likely been without a global pandemic.   First, Ed looks at the economic data, from Factset, comparing GDP, inflation, unemployment, and the ten-year treasury bond rate.  An...

Recently, Congress passed the "SECURE 2.0" Act, building on the first SECURE Act it had passed previously.  Today, Alex Cabot will break down what these new changes mean for your retirement, and Ed Lambert will explain why the cavalry is not coming - and the bulk of the responsibility for retirement planning falls to individual investors.   SECURE 2.0 will do the following: Raise the RMD age to 73...

What can we expect from the financial markets in 2023?  Obviously 2022 was not a great year for investors. Today, Alex gives us a recap of last year, and Ed explains why the team at Birch Run Financial is optimistic heading in to the new year. Alex recaps many of the difference indices' performance in 2022, including the S&P 500, the Bloomberg US Aggregate Bond index, and more - courtesy of FactSe...

It's been almost a decade and a half since we've seen a market downturn like we have in 2022.  And while you may not be happy when you look at your investments, our current environment may provide some opportunities that investors haven't seen in some time.   Today, Ed Lambert and Alex Cabot of Birch Run Financial explain. First, Ed tackles Roth Conversions.   On a traditional IRA, you pay the tax...

With the mid-term elections one week away, many of Alex and Ed's clients and podcast listeners are wondering how the markets will be affected by the results on November 8th. Alex did some digging into this, looking at the every President since Kennedy, comparing market returns of the first two years of their term to the total length of the term.   We start the podcast by digging in to those number...

Investors often get caught up in the idea of "average returns."  Today, Alex Cabot and Ed Lambert of Birch Run Financial explain why that mindset can be dangerous.  Average returns can be looked at over a longer period of time,  but very few years are even close to "average." First, Ed explains the concept of standard deviation - and the expectation that 66% of years can be expected to be within o...

Investment Time Horizons are a concept that Alex Cabot and Ed Lambert feel is often misunderstood by investors.  Alex starts with the two main factors we need to consider: how long until you need the money and how long you will draw on it . This will affect how you invest, even if the spending goal is the same distance away. Next, Ed explains why the duration of the distributions is so vitally imp...

Where do the financial markets sit as we've hit the halfway point of 2022? Ed Lambert and Alex Cabot are here to break it all down, in terms of what it means for you as an investor. Obviously, the big word of the year is Inflation.  Ed explains how bad it is.  Also, what's driving inflation? Is it COVID stimulus money, the war in Ukraine, or China's current COVID lockdowns?  Well, it's all three....

Alex Cabot and Ed Lambert of Birch Run Financial have been working in this industry for over 20 years, and they've seen a lot of interesting financial products.  Today, they take a look back at some of these investments and why they didn't work out.  The list includes: Negative Amortization Mortgages Financial Engineering High Yield Debt/Bond Products Illiquid and Opaque Strategies Fixed Index Ann...

Often, Alex Cabot and Ed Lambert at Birch Run Financial are asked about how the political environment can affect investments.  Today, we take a deep, non-partisan dive into that very question. First, Ed takes the 30,000 view.  On average, it doesn't matter which party is in charge in Washington - Democrat or Republican.  There is a small uptick in returns when the government is divided, as opposed...

Today we’re going to talk about the job market in the US.   As we’ve discussed in the past, the job opportunities for workers at this point are plentiful.   Each coin has two sides, though.   Not everything about the job market is ideal.   First, Alex looks at the good side, including: Low unemployment rate Large number of job openings The gradual ebb of COVID-19 and the return of more people to t...

The Russian invasion of Ukraine, in addition to a terrible humanitarian toll, has also affected the financial sector. We've seen increased market volatility. Today, Alex Cabot and Ed Lambert of Birch Run Financial explain the importance of having adequate liquid cash reserves, and what they should look like. First, Ed explains the importance of having a "war chest," if you will. This is so importa...

Over the first two months of 2022, we've heard a lot of reasons to worry about the market and our overall financial future.  However, Alex Cabot of Birch Run Financial recently wrote a white paper on  4 reasons to be optimistic at this point.  Today we break them down: The economy, specifically measured by GDP, is strong. Consumers are confident. Businesses are optimistic. Employment situation. Ne...