Media personalities often recommend investing in the S&P 500 Index®. Since the indexes are really a list of stocks, you can only invest in mutual funds or Exchange-Traded Funds (ETFs) like SPY and VOO that own the list of stocks. Index funds are often chosen for their low fees.
Investors may not realize that index funds don’t own equal amounts of the stocks in the index. The ‘500’, for example, is weighted so that the most valuable companies represent the largest percentages of the index. Today, with the acceleration of AI, stock indexes and the corresponding ETFs have become increasingly concentrated in the biggest names. Investors pushed up the price of stocks like Tesla, Meta, Nvidia and Google, to the point where the top 10 stocks made up almost 40% of the index, and therefore the index-tracking ETFs.
The problem comes when these mega-stocks lose favor and drive the index lower, even if the other 490 companies hold their value. Index investors are experiencing this today as the top 10 stocks fell 17% this month. An index investor who needs to access their money can’t sell the stocks holding their value without selling some of the rest as well.
Integras Partners has written about excess valuations several times over the past two years, and we have an answer. Our Dividend Growth Strategy holds strong companies with solid balance sheets, high returns on capital and consistently growing dividends. As investors sell overvalued stocks, they often put their money into these types of companies with more stable growth prospects. So, there is a better solution!
Call us today to learn how we can help. 404-941-2800
As we age, living situations and health needs will change. Parents and their children avoid planning for them, for very understandable reasons:
Parents don’t “want to be a bother”. Kids “don’t want to pry” into their parents’ lives. Money conversations can be tense. Parents don’t want to choose one child over another to take important roles in making health and financial decisions.
Our Generational ConversationsTM program helps adult children and their elder parents navigate planning for Housing, Care Management, Financial Continuity, Legal Strategies, and Security.
We want to help. As families get together over the holidays, it’s a great time to broach these subjects. Click here to download our free Themes for Family Conversations. We wish you all the joys of the holidays and everyone in your family a little extra peace.
Call us today to learn how we can help. 404-941-2800
Working with Integras Partners brings confidence to your financial journey. We help clients not worry so much about money, knowing that an expert is minding your investments.
Many individual investors let emotions and procrastination impact their decisions – hesitating to buy when prices fall and feeling eager to invest when markets are strong. A disciplined advisor provides steady, informed guidance to improve your financial outcomes.
August through October are historically the weakest and most volatile period for stocks and bonds alike. This year appears to be exceptional. Few expected the strength and resilience demonstrated by financial markets in the third quarter. The S&P 500 Index® posted a stellar 5.77% gain, posting year-to-date gains of 22%. Unlike recent years, the gain was not due to only a few large tech and communications stocks. We’re seeing overdue and much preferable broadening of stocks showing positive returns, and not just from the largest U.S. companies, but in small-caps and foreign markets as well.
The economy remains strong as the Fed begins its interest rate cutting cycle. Not too hot, and not too cold. Just like the story of a lost girl, everything is now “just right”. The Fed is done raising rates, employment strength continues, and economic growth is solid. These conditions amount to a “Goldilocks Scenario”, just about perfect to sustain corporate earnings growth and stock gains. Earnings growth should accrue to the value and small cap sectors, which until recently have lagged the large tech-dominated themes that were driving the market. At Integras Partners, we have been increasing our client allocations to these undervalued areas of the market for several months.
With lower relative prices, small-caps in particular should become even more attractive to investors, given that this Goldilocks scenario lasts for a while. We saw some confirmation of this in the third quarter as the lower P/E stocks began to outperform.
Integras Partners makes it easier to stay invested by actively managing client portfolios across our time-horizon strategies. We do this by keeping low-risk investments to provide for near term goals, allowing you more comfort with keeping longer-term investments intact through market swings. We can help you capture the long-term gains that volatile markets generate over time with less stress.
First, you may want to read our current market commentary. It details why the markets are particularly attractive right now. You can check it out here.
Employer retirement plans are often your greatest investment, for several reasons.
Funds tend to stay invested long-term, riding out down cycles to capture real growth
Salary-deferral investments made with every paycheck take advantage of market moves buying more shares when markets are down, and less when prices are higher.
Many employers match some contributions to help build your retirement funding.
Don’t limit your contributions to only capture your employer’s match.
Remember that Traditional 401(k) deferrals are pre-tax, so an extra $100 a month typically reduces your bi-weekly paycheck by only $32.
The 2025 contribution limit is $23,500. If you’re 50 or older, you can add another $7,500.
Do you still have money in a former employer’s plan?
Employers have greatly narrowed plan investment choices to avoid liability after the tech bubble of 2001.
Some plans restrict investment choices to “target date” and generic index funds.
If you’re retirement-minded, you can “rollover” an old 401(k)’s balance to an IRA without tax impact, usually getting greater freedoms in how you invest and spend your savings, including your own tax withholding choices.
Glen & Amber are sandwiched between their elder parents and three children, ages 15-24. Glen has been managing their investments on his own and would like to retire from his corporate job. With family pressures complicating this decision, friends referred them to us for financial advice.
In our Discovery Meeting, we learned that Glen’s parents are in their late seventies and becoming less independent. His sister lives closest to them but increasingly frequent trips are straining her family. Amber’s parents are divorced; her dad and his wife are stable, but her mom is struggling with health and financial issues.
Seeking comfort for Glen’s career decision, we started with the family needs. Through our Generational Conversations program, we provided comprehensive information on care management options. Hiring occasional home caregivers who report to Glen’s sister proved to be a good solution. Amber’s mother moved into independent senior living at a reasonable monthly cost. She is now happier in a social setting and Amber is greatly relieved. The proceeds from selling her mom’s home combined with Social Security will keep mom financially stable for many years.
The couple’s elder daughter, Olivia graduated college with some 529 funds remaining, which we transferred to their middle child. Olivia is now largely independent with a first job, and gets occasional support from her parents.
In addition to increasing 529 contributions for the younger kids, we opened custodial (or UTMA) accounts. These are irrevocable gifts that a parent controls until the children reach their state’s age of majority. Unlike 529’s, they can receive annual gifts of stock and mutual funds and get a preferential tax rate on sales. Glen gifted some appreciated company stock which was promptly sold. The proceeds can immediately cover some extracurricular expenses and later fund college costs ineligible for 529’s like cars, Greek life and entertainment.
With family issues addressed, we narrowed in on the retirement conversation. We explored Social Security strategies. Glen also expects some consulting opportunities. We all agreed to start managing Glen and Amber’s investments right away. Our paradigm of aligning investments to match expected income needs brings comfort around retirement spending, while capturing growth with longer-term dollars.
Generational Conversations also supports adult children and their elder parents to plan for housing, legal strategies and security needs.
