Investment Advice for 2020

Happy New Year! For our January Blog, we are doing as we did last fall, rather than having a single guest author, we’ve again put together a compilation from area specialists. With the new year here, and better habits perhaps being part of many resolutions, improved financial management may be one of those goals made. We connected with several firms in Ozaukee County to have them share some of their investment advice for 2020.

Welcome 2020, and here’s to a happy, healthy, and successful New Year!

Investing your money can be puzzling, but it takes some attention to detail and some educated risks. It’s always good to have some guidance from professionals, and that’s precisely why we asked several experts from the area to give us some investing advice for 2020.

Matthew Richmond from Richmond Investment Services told us that “As you prepare for 2020, market exposure in your investment portfolios it is important to readdress your risk adjusted return expectations. Too often, especially after years of expansion, positions and managers drift. When contractions come (and they will) it is beneficial to understand how your positions will react to macro conditions and each other. To avoid surprises, talk to your advisor about risk and its relationship to potential reward.”

Betty Wellhoefer Hill, from Crescendo Wealth Management conveys to

• Itemize all your investment accounts and ask: ‘why am I investing funds in this account this way?’ Does your strategy align with your timeline to use the invested funds and are you comfortable with the level of risk in each account?
• Review the tax impact of investment accounts. Prioritize your future contributions into tax advantaged accounts. Understand if you are making traditional deductible or pre-tax contributions that reduce your taxes now, will create a tax liability when you withdraw funds. Alternatively, you may be able to make Roth retirement plan or Roth IRA contributions that do not reduce your taxes today, but will allow you to take the money out tax free assuming you meet all withdrawal rules.
• Last by not least, always remember two key rules of investing – invest early and invest often. Understand that there is never a perfect investment portfolio or a perfect time to invest because all we have is historical information and are not certain what future markets will bring. Pick a diversified portfolio that is well-positioned to get you the long-term return you need but doesn’t take on so much risk you can’t sleep at night.”

Paul Westphal, from RBC Wealth Management Group shared these three tips for 2020:

• Consider staying committed to equities in 2020, as I believe there is no recession in sight.
• Make sure that you have an Updated Estate/Financial Plan or do that in 2020
• Look at high quality over lower quality bonds and tax-free municipal bonds over taxable bonds. Greg Sommersberger from The Sommersberger Group says that “in 2019, the stock market surged to all-time highs as the Federal Reserve cut interest rates and global trade tensions eased in the second half. In 2020, US political and global trade uncertainty will continue dominate the news headlines and we expect volatility to return throughout the first half of 2020. As an investor, it is important to focus on the facts and create an allocation that will better protect your assets.” James Marshall from Spectrum Investment Advisors imparted these investment ideas for 2020 with us:

Greg Sommersberger from The Sommersberger Group says that “in 2019, the stock market surged to all-time highs as the Federal Reserve cut interest rates and global trade tensions eased in the second half. In 2020, US political and global trade uncertainty will continue dominate the news headlines and we expect volatility to return throughout the first half of 2020. As an investor, it is important to focus on the facts and create an allocation that will better protect your assets.”

James Marshall from Spectrum Investment Advisors imparted these investment ideas for 2020 with us:

• Don’t fight the Fed – lower for longer interest rates favors stocks
• 5G technology in late 2020 should help tech stocks
• Invest in stocks that institutions are gobbling up
• The SECURE ACT raised the age limit on Required Minimum Distribution’s from 70 1⁄2 to 72- adjust your planning
• Your asset allocation should match your risk tolerance, so that regardless of tomorrow morning’s news, you don’t have to sell

William Morse from Stifel Financial Advisors conveyed some tips for donating to charities for 2020.

“You can give even more by doing so tax efficiently. Here are some ideas to discuss with your tax and Financial Planners to see if they are right for you. Three simple ways to give more to causes of your heart in 2020:

• Stop giving cash to charities and gift appreciated assets, such as stocks. When you gift a security to someone, you gift the cost basis. The charity doesn’t pay taxes so they are happy to accept your tax burden.
• Double up your deductions every other year. Consider opening a simple Charitable Fund. You can make two years of contributions in one year to double up your deductions and still dispense the gifts annually.
• If you have a Required Minimum Distribution from your IRA, have your RMD dispensed directly to your charity. By doing so you will receive a dollar for dollar tax exemption. Congress passed and the President signed the new SECURE Act that raises the RMD age to 72. Be sure to discuss this with your tax and Financial planners before acting.”

So as the new year begins, take a little time and evaluate your current investment and tax strategies. Hopefully, these tips and ideas get you thinking about what you can do in 2020. Ozaukee County is full of great financial advisors, take time to talk to yours or if you don’t have one, consider meeting with one to examine your strategies for this year and beyond.

Thanks to the following financial management professionals that contributed to this article:

Matthew R. Richmond, MBA, Principal Officer / LPL Financial Advisor, Richmond Investment Services®
Betty Wellhoefer Hill, CFP®, MBA, President and Owner, Crescendo Wealth Management
Paul E. Westphal, CIMA®, Snr Vice President, WE Wealth Management Group, RBC Wealth Management
Greg Sommersberger, QPFC, Senior Investment Consultant, Managing Director, RW Baird
James F. Marshall, Chairman/Ambassador, Spectrum Investment Advisors
William Morse, CFP®, Branch Manager, Stifel