The Super Bowl & Investing

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Post by: Valley Financial Group

I️ know that it’s been a few months since THE EAGLES. WON. THE SUPER BOWL. But it is very obvious it’s still at the forefront of the minds and hearts of Eagles fans all over the greater Philadelphia area. After all, how could one soon forget what we had longed for more than anything else and which we had been cruelly forced to wait for so long? But despite the years, for some decades, of waiting and dreaming and crushing disappointment, the Birds faithful never lost hope, and never stopped believing.  We Philly fans are special like that. A 2-3 start won’t stop us from turning on our TVs and radios every single week to cheer on our beloved Eagles, and we’ve all watched hours of football on Sunday’s when our boys in black, white, and green were well out of playoff contention.

This same no quit attitude we all have for the Birds can just as easily be applied to your investment portfolio, even if i‎t might be a little more difficult to execute. Sticking with your investments through slight downturns in value, as opposed to jumping ship as soon as you see red on your ticker, can end up being extremely beneficial in the long run. I‎t may seem deceptively simple, but to follow through when your hard-earned dollars are on the line is far easier said than done. It’s finance 101. Buy low, sell high, and the third golden rule, do not panic. Have a little faith in you and your adviser's carefully thought out investment strategy and who knows, you might just end up winning the Super Bowl. 

Chase Utley's Retirement

"Chase Utley! You are the Man!”  - The Great Harry Kalas

Post by: Valley Financial Group

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In Philadelphia, we loved Chase simply because he gave everything to the Phillies and to the City of Brotherly Love. If you need any proof of this love, according to US Social Security database, 299 newborns were named Chase in Pa in 2009.  The Man is now retiring from baseball and if Chase Utley needed help preparing for his retirement these are the questions Valley Financial Group would want him and his family to think about.

1. Do you know what your ideal retirement looks like?

- It is very important to know if you have enough money for retirement. What exactly do you want your retirment to pay for and what is it going to cost to live your ideal retirement? If you don’t have a vision of your retirement goals then it makes the planning just to say a little difficult.  

2. Does your spouse have the same retirement goals for your family as you?

- Just like in baseball, if you are married, you are part of team and if you don’t share a common game plan it could lead to some series loses. The term is “Gray Divorce.” Among U.S adult ages 50 and older, the divorce rate has roughly doubled since 1990.  Boomers are living longer and now that the kids are out of the house they want to live freely, which can cause problems if one spouse wants to live the Archie Bunker Retirement on the recliner. Not understanding your spouse’s retirement goals possibly can be catastrophic for your finances.

3. What do your financial habits say about you?

- Your assets, pensions, social security benefit, tax situation, debt, cost of living, longevity, insurance, risk tolerance etc… are all important in creating a successful retirement plan. However, if we took a look at your credit card and debit card statements, would we understand who you are and what would they say about you.  According to Kathleen Kingsbury author of the book “Breaking Money Silence” evaluating your statements will allow you to understand where your money is going and consider if it fits your values.  You want to notice what money behaviors match and don’t match what’s is important to you. You want to eliminate or slow down the habits that could interfere with achieving your ideal retirement.

Chase Utley is most likely playing his last games at Citizen’s Bank Park today and he probably isn’t walking into Valley Financial Group after his game for a meeting to plan for his retirement. However, if he did, these are the first three questions we would want ask him and when he left the meeting we would thank him for all those great years and for being the Man! We wish you the best Chase!

https://www.nerdwallet.com/blog/investing/financial-plan-questions-to-ask-before-

you-start/

https://nypost.com/2017/06/14/this-is-what-divorce-looks-like-after-50-years-of-marriage/amp/

The Relationship between Bonds and Interest Rates

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Post by: Valley Financial Group

When it comes to discussing investment strategies and portfolios, most minds shoot right to the glitz, glamour, and high risk-reward commonly associated with stock and equity investments. Although they're far from unheard of, the humble bond usually takes a backseat to allure of the "golden egg" possibility when investing in stocks, but even though their lower risk-reward may not be quite as enticing to the untrained eye, a good selection of bonds can play an integral part in a successful investment portfolio.

So, yeah, we know we need them, but how exactly do they work? Put simply, the value of a bond after it is purchased shares a negative correlation with the interest rate levels issued by the Federal Reserve. If interest rates rise after your bond is purchased, it is now worth less than face value and will trade at a discount. If interest rates fall then your bond's value increases, it will trade at a premium. Nothing to crazy right?

Getting into more specifics now, the way in which you purchased the bond matters in terms of how much the value of your purchase fluctuates based on these interest rate changes. For example, if you are a shareholder in a bond fund, a collection of hundreds or even thousands of bonds, your level of boom or bust will be much more dramatic then someone who is an owner of an individual bond. This is because, when interest rates rise or fall, shareholders will either jump off or on the bandwagon, so to speak, of the bond fund according to which way the interest rate turns, causing significant spikes and drop-offs of their investments for those investors who hold onto their shares. Because of their close relationship with interest rates, bonds are also heavily affected by the fear effect, that being when something causes economic fear, whatever it may be, which in turn causes many investors to take their money out of riskier investments (stocks) and gravitate towards safer bets (bonds and securities). This sudden rush of demand drives bond prices up, and, as we know, when bond prices rise their yields fall, causing losses for those already invested in individual bonds and bond fund shareholders.

However, these pains brought about by fear are usually not even close to the hits that one may take in the stock market during a time of economic turmoil. So, in the world of bonds, how does one protect themselves. Firstly, it is always safer to buy bonds with shorter maturities, meaning the issuer will have to pay you back sooner, leaving you less vulnerable to interest rate fluctuations. Second, when investing in individual bonds, make sure you and your adviser have looked over the company's reliability, particularly in terms of credit, to give yourself the highest chance of obtaining returns. So now we all have some basic knowledge of bond investments, and if any of this sounded good to you, do some research, sit down with us, and find out if bonds or securities are a good fit for your investment portfolio.

Is Healthy Eating Cost Effective?

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Post by: Valley Financial Group

Even many out there, myself included, could be found guilty of the occasional dietary splurge, I think it’s safe to say that a good chunk of people at least aspire to be more health conscious when deciding what to eat. It’s definitely not an easy task, nothing worth doing ever really is, but to compound the issue even further, paying for this healthy lifestyle is perhaps more difficult than the dietary changes themselves. However, when we take all factors into account, and obviously making note that there is a humongous gray area between the extremes of the totally healthy and unhealthy diets, which of the two lifestyles really brings with it the highest cost?

In plain monetary terms, a study from the Harvard University School of Public Health found that, on average, a healthier diet costs about $1.50 more per person per day as compared to a unhealthier one. For a small example, healthy diet foods used for this study included nuts, fish, fruits and vegetables while processed foods and meats, along with refined grains were foods heavily featured in unhealthy diets. If kept up for a whole year, this cost difference would amount to about $550 per person, which for some lower income households may amount to a difference they cannot afford. However, the study does make the point that although they are in the short run more expensive, healthy diets can help to prevent and/or combat diet related chronic diseases such as Type-2 Diabetes, heart disease, high, blood pressure, and obesity, all of which can amass costs far higher than that of a healthier diet in the way of treatment and medical bills.

There are currently countless sites and lists across the internet full of healthy, low cost foods for you and your family to evaluate. So it is easier and cheaper than ever to put the right things into your bodies. Sure, you're probably going to cheat from time to time, so is everybody, but by just adjusting your diet a little bit in the right direction, and maybe by absorbing the cost of a couple of extra bucks on your grocery store trips, it will, in the long run, make you and your family healthier and happier. Twist my arm and I'll still have a few Oreos though! 

Best Apps for Financial Management

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Post by: Valley Financial Group

As much as some may resent it, it becomes harder with each passing day, month, and year to deny the enormous part that technology plays in all of our daily lives. From getting a ride to finding a place to eat, there is an app available on any smartphone for nearly every want or need, and what more important need to take care of then planning for your financial future. You guessed it, there's more than one app for that as well, each one catering specifically to your exact fiscal needs.

First up is Mint, from Intuit Co., who's name you might recognize from TurboTax or Quicken Loans. The app allows you to bring all your financial responsibilities to one convenient place. That includes credit/debit cards, bills, tools for budgeting and tracking spending, and so much more. It notifies you when you need to make pavements to avoid late fees and can even give you budgeting tips based on your spending habits. Its basically the best app for managing your finances overall.

Next up is You Need a Budget (YNAB), far and above the best app for eliminating debt, all based around the simple principle that every dollar you possess has its own specific job. It even helps you adjust your budget as time passes if you get a little off track. There's a small monthly fee, but with the average user shaving off $500 in debt in just the first month, it may be worth shelling out for the monthly subscription if you want some extra help getting rid of unwanted debts.

The last entry on our list is designed specifically to aid with savings. Its called Acorns, and it makes saving ridiculously easy. Every time you make a transaction with a card you've connected to the app it rounds the purchase up to the nearest whole dollar and invests the difference in a number of low cost exchange-traded funds that you have selected based on the level of risk-reward you are comfortable with. Users claim they barely notice the pocket change missing, and who doesn't love a couple hundred extra dollars appearing in their account at the end of the year. 

These are all extremely helpful apps for your finances, but of course they are by no means the only ones out there. Search through the internet and the app store and you're sure to find an app that can help you and your financial situation.