Payne Points of Wealth

2020 Lessons That May Keep Your 2021 Asset Allocation From Getting Out Of Whack, Ep 20

January 7, 2021

Happy New Year on this 20th episode of Payne Points of Wealth. Things are getting interesting. Wall Street all of a sudden has rose-colored glasses. Goldman Sachs came out and was looking for a 15% return this year on the S&P 500 as the world has apparently become more bullish overnight. The questions… Will it be a good year in the stock market or a bad year? How do you allocate your money? Last year was a crazy tumultuous year in the markets, and probably a tumultuous year for your financial plan too. So, we're going to break down what lessons we can learn and we're going to talk about how we can carry those lessons over and apply them to 2021 to make it a great year. Join us!

You will want to hear this episode if you are interested in...

  • Goldman Sachs predictions… are they even worth reading? [1:10]
  • FAT MAG doesn’t represent a reopening economy [4:15]
  • Big cap tech is hot right now but will it stay that way? [5:57]
  • The Tipping Point [8:11]
  • What to do when your asset allocation gets out of whack [11:02]
  • The financial Goldilocks of the emergency fund [13:59]
  • The importance of legacy planning [15:24]
  • Hidden Facts of Finance [18:40]

FAT MAG or FAT GAM which is your favorite acronym?

Ryan is pleased with his creation of an acronym for the S&P’s big 6— Facebook, Apple, Tesla, Microsoft, Amazon, and Google— but he can’t seem to settle on an order. What do you think… FAT MAG or GAM? 

In any case, you’ve got a lot of money concentrated in a very small pool of stocks. Stocks that don’t exactly represent the economy reopening either. This could potentially lead to an ironic trade where the S&P 500 actually underperforms this year even though the economy is rockin’. It's one of the reasons why you want to be diversified. We are already seeing other sectors like small caps and energy that are outperforming. Check out the episode to learn more!

This week on the tipping point: Lessons Learned

Staying invested, rebalancing until you don’t have to, optimistic retirement planning, having the right amount in your emergency fund, and the importance of having a legacy plan BEFORE it’s needed are some of the key lessons we took away from 2020. Join us for this episode’s tipping point to hear the meat and potatoes from each of these valuable lessons. They are definitely some you don’t want to miss!

This week’s hidden facts of finance

An investor who put $10,000 into the S&P 500 index fund at the start of 1980 and missed the market's best five days through the end of August 2020— just 5 days over a 20yr period— would have a return of almost 40% less than an investor that just remained invested. That's insane. The market does that though, it pushes you to the point where you can't take it anymore. You get tired of it going down so your get out until it's done going down and just like that you can miss the BEST days! Check out the episode for more hidden facts!

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