From the desk of Chris Abely, Chief Investment Officer
The Challenges Facing Conservative Investors
Does this sound familiar?
You prioritize stability and safety over an investment’s return. You are most comfortable investing
in money market funds, certificates of deposits, U.S. Treasuries, high quality bonds and perhaps a
few blue-chip dividend stocks and real estate (e.g., your home).
“I can’t afford to lose my hard-earned savings to a stock market crash, and I’ve witnessed a few.”
“I’ve spent a lifetime earning my money and I want to keep it safe and not worry.”
“I can live on less, although I should be paid more for my hard- earned savings.”
Conservative investment strategies used to work for retirees. Most financial professionals and
popular money magazines agreed with “The 4% rule”. It professed that you could invest conservatively and withdraw 4% a year from your retirement account and never run out of money. Prior to the 1990s many people used a 5% rule.
How things have changed!
GUILFORD, CT — GSB Wealth Management, LLC (GSBWM), a Registered Investment Adviser and wholly owned subsidiary of GSB has acquired the assets of CTMA Wealth Management (CTMA), an East Haven, CT-based Registered Investment Adviser with $198 million of client assets under management. Chris Abely, CTMA’s founder, will become GSB Wealth Management’s Chief Investment Officer.
The acquisition brings CTMA’s financial planning, tax planning, executive benefits, and corporate retirement expertise to GSBWM, helping to better serve clients (individuals, small businesses and credit unions) and opens the door to new capabilities for its parent company, GSB, a CT-based financial institution. “That’s not something we did previously so we’re excited to offer that, and it aligns very well with the commercial banking clients of GSB,” said Ken Russell, President and CEO of GSB Wealth Management. “For the bank itself, it can now broaden and deepen relationships with commercial clients by offering retirement planning.”
October 16, 2020 – Season 4, Episode 2
In this Special Episode, listen to our insights and thoughts on the election and the impacts it could have on the markets, economy and your investment strategy going into 2021!
Fourth Quarter Economic Update
October 8, 2020 – Season 4, Episode 1
In this episode, we will cover a variety of topics from the Federal Reserve's current stance on interest rates to the Mortgage market. We will also share some fun facts you should know and a number of "firsts" you should be aware of.
Many clients have been asking us why the stock market has recovered so strongly when the news concerning the economy and Covid-19 is taking a turn for the worse. We know the economy has been temporarily crippled, the unemployment rate has skyrocketed and there is civil unrest in many major cities. The stark truth is that this information is well known in the markets and has already been factored into today’s prices. What is propping everything up is the fact that the government has printed trillions of dollars and some of this money is leaking into the stock market. Can anyone remember a time when the government literally printed checks and handed them out to people as if it were Halloween? Unprecedented.
Happy Fall! I say this as it is over 80 and humid to be followed with temps in the 40’s later tonight. Only in New England! We spoke in our last quarterly newsletter about navigating through this economic and political environment like a pilot flying IFR (instrument flight rule) where visibility is low and the pilot can’t see the runway. Unfortunately, the skies have yet to clear and the fog is even thicker than before. Adding to the trade war with various overseas nations and the political bickering in Washington is now impeachment proceedings against the President. Remarkably, the stock market has taken all of this in stride and was up around 18% year-to-date. The past two days have been a different story. We mentioned earlier how interest rates have been in a free fall for much of the past several months, at the same time the stock market was hitting new highs. This seemed a bit peculiar to us as interest rates typically increase when the economy is strong and the stock market hitting new highs. Economic reports of the past few days are pointing to a weakening economy via contracting industrial production numbers. This in itself doesn’t necessarily mean anything bad is going to happen. Industrial production fluctuates month to month based on a number of factors including seasonality, temporary plant shutdowns due to re-tooling/modernization, weather anomalies and other factors. Having said that, given all of the other worries investors have been fretting over these past few months, the industrial production reading may be giving folks reason to reassess how much risk they are taking within their portfolios.
May Market Update – Is Unemployment, the Debt and Liquidity Impacting the Market?
May 18, 2020 - Season 3, Episode 3
Since our last Podcast “COVID-19 and the Fear Cycle of Investing” in March, the market continue to be extremely volatile. What is causing this volatility? Are the unemployment numbers fueling investors’ fears? Is the Debt weighing on the Market? And is the Market still overpriced? Chris Abely and I discuss these and several other topics this month.
As this letter is being penned on this first day of April the sun is shining bright and the temperature is mild, allowing one to get out of the house and take a walk in the neighborhood or in an area park. Given the happenings of the past five or six weeks, for many of us getting outside and enjoying nature is one of the few things we are still able or permitted to do.
To our GSB Wealth Management clients,
One of the aspects of the recently passed $2 Trillion CARES Act was the waiver of the Required Minimum Distribution for IRAs for 2020. The link below provides you with additional information but in all cases we urge you to seek the advice of your personal tax professional as the waiver does not apply to every type of IRA. If you do not have a tax professional with whom you can consult please feel free to contact us and we can offer you guidance in finding a tax professional.
Link to AARP website: aarp.org/money/investing/info-2020/cares-act-retiree-tax-benefit.html
Thank you for the trust you continue to place in GSB Wealth Management.
Your GSB Wealth Team
Zero Interest Rate Environment: March Madness of a Different Sort
March 25, 2020 - Season 3, Episode 2
Advisory clients have portfolios designed to generate yield and weather storms like the one we are currently in. In this special report, Chris Abely will talk through the markets, risk, volatility and what’s driving the market.
"Wisdom is not a product of schooling but of the lifetime attempt to acquire it." ~ Albert Einstein