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October 5, 2019
Good morning! It’s hard to believe, but we are now in the final quarter of 2019 and also of the 2010s decade.
💲 The 4th quarter is historically the best quarter in the market, but as we learned last year, that’s not always the case. After finishing the first three quarters up over 20%, the S&P 500 got off to a bit of a rough start this week:
- Monday, September 30: +0.50%
- Tuesday, October 1: -1.23%
- Wednesday, October 2: -1.79%
- Thursday, October 3: +0.80%
- Friday, October 4: +1.42%
As you can see Tuesday and Wednesday were pretty rough, but we ended the week with the positive jobs report erasing some of those losses. All in all the market was down -0.33% for the week:
Anytime we have a couple of days like Tuesday and Wednesday I like to zoom out and change my perspective. Take a look at this 30-year chart to see what I mean:
💪 The unemployment rate hit a 50-year low! – The September jobs report was released Friday morning. Here are the key takeaways:
- US employers added 136,000 jobs in September. This marks 108 consecutive months of job growth…by far the longest streak in history.
- The unemployment rate dropped to 3.5% in September…down from 3.7% in August.
- We now have the lowest unemploment rate we’ve seen since December 1969. Wowzers!
Financial Planning Tip
🗂 Review your estate plan soon! – On Friday I woke up to the sad news that a leader in our industry (Envestnet CEO, Jud Bergman) and his wife tragically died in a car accident. They were riding in a taxi when they collided with a drunk, wrong-way driver. It’s sad to see their lives end like this. It’s also a reminder that none of us know which day or hour might be our last. So, make sure your estate plan is updated!
Here’s what you should do: Set an annual reminder to review your estate plan by asking the following questions:
- When was the last time I had my will or trust updated?
- Do I know what my will or trust says?
- Do my estate planning documents still say what I want them to say?
- Has there been an event over the past year that might require a change to my estate plan? (i.e. divorce, death of a family member, sale of a business, etc.)
- (If you are married…) Who will take care of our minor children in the event both my spouse and I die in an accident?
- Who are the beneficiaries of my retirement plans, IRAs, and life insurance policies? Should there be any changes?
This is a good start for an annual estate review. It’s easy to let years go by and forget about this, so let this be your reminder to stop putting it off and take care of these things today.
Good to Know
📉 Schwab wins the race to zero – This week Charles Schwab announced that they were eliminating commissions on stock, ETF, and options trades. TD Ameritrade and E-Trade both quickly followed with similar announcements. I expect Fidelity to make an announcemnet of their own soon, but it hasn’t happened yet.
Stock trades were already at very favorable pricing with most trades costing just $4.95 per transaction. This was a competitive move as new startup fintech companies, like Robinhood, already offer free trading. Surprisingly, stock trading represents less than 4% of total revenue at Schwab, so this move was made purely to maintain a competitive edge against other custodians that are much smaller and where trading revenue is a larger share of total revenue.
The bottom line is that this is great news for investors. Technology and competition have driven trading costs down dramatically. Lower costs means more money at work for the investor.
The Good Stuff
🎧 Podcast I enjoyed – Episode 341 of the EntreLeadership Podcast with Seth Godin. If you want to make a name for yourself at work or with your business, then this is a must-listen. Seth talks about what it means to be indispensable. A linchpin. Listen to hear exactly what it means to be a linchpin and why it’s the key to your future success. This is also worth sharing with the recent college graduates in your life. This is a crucial concept to embrace upon entering the workforce.
📖 Book I’m reading – Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life. A friend of mine sent me this book and claimed that it was his favorite business book of the year. I’m only a few pages in, and I’m already hooked. More to come…
❓Really Good Question (RGC) of the week – Speaking of books…I saw this question this week, and I’m wondering,
“What’s the book that has taught you the most about yourself and/or most materially changed the way that you live?”
I’d love to hear your response. If you feel like sharing then simply hit reply.
🏈 Buckeye fans…here’s a crazy stat: Ohio State is 91-9 in its last 100 games, which is the best 100-game stretch in program history and tied with Alabama for best in the country. It’s a great time to be a Buckeye! Tonight I’ll be watching the #4 Buckeyes play #25 Michigan State. #BeatSparty
Make it a great day,
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