The stock market has been rather nasty as of late so let us switch gears and touch on a topic that most investors avoid yet need to pay more attention to. After all, what exactly happens to your investments when you’re gone? Do you actually need a living trust or would a will suffice? We reached out to Mindy Baldwin, an estate planner in Rancho Santa Margarita for expertise on this topic:

The terms “will” and “trust” come up often when doing estate planning. Many people assume that these terms mean the same thing and use them interchangeably. However, wills and trusts are different documents that are used in different circumstances.  



Normally…we write about the stock market… its events, reactions, and implications. At the end of the day…none of it matters if you’re not alive or breathing. As real as that last sentence is… it prompts us to analyze how the world is changing and what we need to do in order to survive.

As an investor, your job (at least how we have defined it) is to design a plan and adjust it accordingly to outside circumstances and your personal needs/goals. What gets complicated…is successfully investing while adhering to these three things:

  1. Be human (by reading this article…YOU are human and with that simple fact we know you have emotions. Everyone who has emotions will make investing mistakes.)
  1. Not to be an ambulance chaser (we all want to “win” or gain…but the aim isn’t against a greater cause or necessarily gaining off of someone’s loss). We’ll expand on this point later in the article but the idea here is to think ahead instead of chase what’s hot.
  1. Have a crystal ball. Neither you nor anyone has one, so why pretend? The best perceived “financial advisors” (or at least those that claim to be)…”predict” the future or prognosticate it and they’re almost always wrong.

Investing can be complex enough but when you then introduce a dramatically changing world, most people don’t know how to adjust. Over the past month our world has seen acts of terror force people into a state of fear and shake our faith in the future. On November 13, 2015 the city of Paris was changed forever. Two weeks earlier a commercial airplane was downed in Egypt and just the day before the Paris attacks there were two suicide bombings in Beirut that killed 43 people. On our own soil we are just now understanding the details and motives behind the shootings in San Bernardino that took 14 innocent lives.

What is happening and is it safe to invest the way we used to?

Without question, acts of terror


Have you ever watched an old rerun of your favorite TV show or perhaps enjoyed the same movie twice? Of course you have…

Can the same be said for watching similar patterns in the stock market? While nobody wants to see the market go through a nasty quarter like we just witnessed, like it or not, it will happen again. Stock market corrections are not predictable and they air on their own time!

Our opinion, however, is that the stock market in 2015 is very much like the one we saw in 2011. History may not always unfold just as it has before, but several patterns and background indicators tell us that there is a lot to learn from the 2011 stock market year. Take a quick peak at the end of this article for a visual representation of how the markets did from May to late October in 2011 and 2015.

Most of us can’t remember what we had for dinner last night so as a quick refresher let’s summarize what was going on in 2011:

During the summer of 2011 all of the news headlines and the overall narrative was absolutely negative. The sovereign debt crisis in Greece rattled nerves daily. Comparisons of Greece vanishing were eerily similar to the disaster of Lehman Brothers going bankrupt just three years prior. Almost all the financial pundits also talked about the Fed raising interest rates and what a devastating impact that would have on the market. Sound familiar???

In the middle of this past quarter, similar story lines have emerged. The 2011 summer correction flirted with bear market territory (-20% by definition) and from its peak to bottom pushed the market down over -15%. This summer didn’t feel much better as the market peeled off almost -12% at one point. Believe it or not, Q3 of 2008 was much better at “only” -9%. Most people don’t remember that because of how bad Q4 of 2008 was at -22.54%! Current emotions also negate memories of what happened in Q4 of 2011 as well…the stock market actually rallied over +12%.

We don’t expect quite that strong of a finish but firmly believe that we’ll see high single digit returns this final quarter. Obviously, anything can happen but the odds of another 2008 unraveling in the next 60 days are miniscule. Will that day come again? Perhaps...but no matter how clear your crystal ball is you’ll never see it coming.


The challenge of having a well-balanced portfolio is that much like in 2011…the story line is International and Emerging Market stocks have suffered the most. Even with a rally they will likely finish 2015 negative. In closing, here’s some food for thought: International and Emerging Market stocks were down -11.73% and -18.17% respectively in 2011. Everyone sold but guess how they did the next year? They both beat the S&P 500 with respective returns of +17.90% and +18.63%...


Click here to see the 2011 stock market correction versus what we just saw in Q3 of 2015. 





First and foremost, what is the proverbial “wall of worry”? If bad news is bad…why is it that good news (or even mildly good news) … is also perceived as being ‘bad’?

Granted, this is not always the case but it certainly is now. What is the “wall of worry”?

DEFINITION of 'Wall Of Worry'

“The financial markets' periodic tendency to surmount a host of negative factors and keep ascending. Wall of worry is generally used in connection with the stock markets, referring to their resilience when running into a temporary stumbling block, rather than a permanent impediment to a market advance.”

Two weeks ago we were in Chicago for discussions with analysts, economists, and elite portfolio managers. What’s interesting is that the majority of the investing public is living in fear and at their utmost pessimistic levels of recent history, yet the underlying economics and pure fundamentals of the stock market actually counter such negative and extreme doom & gloom sentiment.


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