Hear Mark Matson discuss how Matson Money took advantage of the recent stock market volatility generated by the British decision to exit the European Union.
 
Call me with any questions or if you want to discuss your individual portfolio. 
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Feel free to leave me a comment and let me know what you think.
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You can reach me at (949) 677-5707 or info@balancedwealthmgt.com
if you would like to learn more about ​Matson Money. 

I wanted to address the recent stock market volatility you may have been hearing about in the media. If you haven't heard, I congratulate you and you have nothing to worry about.
 
For those of you who follow these things closely, stock market volatility can be unnerving. But for seasoned and educated investors, these types of markets are opportunities. As I have mentioned many times, your Matson Money team is hard at work rebalancing your portfolio (sell what is up and buy what is down), taking advantage of these turbulent markets.

Below is a short video with Steve Miller of Matson Money who explains how, when and why to rebalance which is a critical step in portfolio management. 

A few more things to remember:
 
1. Stock market declines happen all the time. On average, throughout history, 10% declines in the market have happened about every 11 months. Yet, the stock market has continued its march upward over the decades.
 
2. Markets recover - often quickly. For example, just last August, the market dropped more than 10%, but by November, the market recovered to where it had traded before the drop. Historically, even the largest market crashes have eventually given way to new all-time record highs.
 
3. The market's best days have historically followed substantial drops. Those who panic and sell after a drop always miss out. You actually don't "lose" if you don't sell. You still own the same amount of shares in the fund.
 
4. In the long run, stock returns are positive. There has been no 20 year period in which stocks have lost money. that's true even when you consider the impact of inflation on stock market returns.
 
The most important thing to do during volatile times is to know and be assured that both me and your  Matson Money team are continually monitoring your account, making sure we are taking advantage of every opportunity for the long term financial success of your portfolio.
 
As always, please feel free to email or call me anytime.
 
Chuck Rowan
949.677.5707
info@balancedwealthmgt.com

I came across this great article in USA Today, Protect your nest egg: Rebalance your 401(k) to avoid risk and I thought you would enjoy it. 

For those of you who have Matson Money accounts, please note that Matson accounts automatically rebalance every quarter, if necessary. 

Protect Your Nest Egg: Reblance Your 401(k) to avoid risk

A roaring stock market is generally a positive for investors, but Wall Street's robust performance may actually be having an adverse effect on some Americans' 401(k)s.

A second-quarter analysis by Fidelity Investments of its 13 million 401(k) accounts found that 27% of account holders in their mid- to late-50s had a stock allocation that was 10% higher than what's recommended.

Another 10% of those in that age group, along with 11% of account holders 50 to 54, had a 401(k) that was completely invested in stocks. If the market takes a plunge, that's a potentially perilous scenario for those on the cusp of retirement.

"That's concerning, especially at that age,'' says Jeanne Thompson, vice president at Fidelity Investments. "You want to make sure you have a little more balance, that you hold a little bit in bonds (and cash) ... so you don't lose your whole nest egg, or much of it, in one swoop.''

We at Balanced Wealth Management endorse an investing strategy called Modern Portfolio Theory. It is an investing technique that does not involve trying to time or forecast the stock market or speculate and gamble with your retirement future.

Modern Portfolio Theory does involve a lot of math, statistics, economics and financial know how, but the fundamental concepts are very clear and easy.

The basic Principles are fairly simple:

• Own Equities (Stocks)
  
• Diversify
  
• Rebalance periodically
  
• And…Don’t get hung up on the details.
  

But…the biggest risk is not the stock market; it’s really the individual investor that can trash the whole system. There is a company called Dalbar Research that has studied this phenomenon over a period of decades and compared the stock market rate of return with what the typical investor earns on their investments. For example US institutional mutual funds have earned in excess of 9% while the typical investor has only earned a little over 3%.

If you would like to learn more about the Greek economic turmoil, please contact our office by phone at (949) 677-5707 or via email at info@balancedwealthmgt.com.