facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause

The Northern Star Boilermaker Retirement Report

The Northern Star Boilermaker Retirement Report
Message From Jon

Market Remains Bearish

Since the writing of our last message, we have seen a typical recovery rally in the markets.

Normal market mechanics would dictate that on the heels of a 10+% retraction in the market, we would expect to see a recovery that is between 70-90% of previous levels before heading back down again for another retraction in value.

We refer to this rally as a recovery rally because there are some characteristics that are typically not present during this type of rally vs a rally that is sustainable for a long period of time (weeks vs years).

Our short-term indicator is the only indicator out of 4 that is suggesting a bullish condition. Not surprising since it is designed to measure market sentiment by the hour.

Retirement Planning Plan for Retirement Lafayette, IN

Financial Planning Retirement Planning in Lafayette, Indiana

Our mid-term indicator is still favoring bonds over stocks but has had a few changes to the pecking order as you can see below.  We are seeing the commodity, currency and international equities rise as bonds, stocks and cash are all falling.

Chart on 4-26-2016

Lafayette, IN Retirement Planning


Chart on 3-10-2016

Plan for retirement financial planner lafayette, IN

Our newest technical indicator is from the longest tenured technical research house in the country.  This indicator measures buying power vs selling pressure (supply and demand).  It therefore has the ability to call attention to a change in the condition of the over-all markets.

How to plan for retirement financial advisors Lafayette, IN

One of many newsletters we subscribe to as well also indicates a bearish market condition and is urging caution at this time.

Retirement financial advisors financial planning lafayette, IN

My grandfather used to say, "Three people tell ya your drunk, you better lay down". I find this humorous and appropriate at this time given all the data and indications.

"Do you think the market is going to crash then if we are in a bear market?".

A bear market is not the opposite of a bull market. It looks like a heartbeat monitor. It is fraught with volatility and mood swings. Under performance in equities and lower earnings from companies. In a bear market, you want to choose low-risk, low-volatility holdings in order to preserve principal while still participating.

Until we are satisfied the market condition has changed, we will continue to leave the defense on the field.


sources: yahoofinance, vantharp, Lowryondemand, Spirestocks, Dorseywright, 

The Language Barrier

The biggest issue of investing is the language for most people. In this section, we will be striving to improve this for our readers by doing investing/economic terms per issue.

1) Bear Market Condition:

A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment to be self-sustaining. As investors anticipate losses in a bear market and selling continues, pessimism only grows. Although figures can vary, for many, a downturn of 20\% or more in multiple broad market indexes, such as the Dow Jones Industrial Average (DJIA) or Standard & Poor's 500 Index (S&P 500), over at least a two-month period, is considered an entry into a bear market.

2) Russell 2000:

An index measuring the performance approximately 2,000 small-cap companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000 serves as a benchmark for small-cap stocks in the United States. 

3) Volatility:

1. A statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security.

...In other words, volatility refers to the amount of uncertainty or risk about the size of changes in a security's value. A higher volatility means that a security's value can potentially be spread out over a larger range of values. This means that the price of the security can change dramatically over a short time period in either direction. A lower volatility means that a security's value does not fluctuate dramatically, but changes in value at a steady pace over a period of time.

1) http://www.investopedia.com/terms/b/bearmarket.asp

2) http://www.investopedia.com/terms/r/russell2000.asp

3) http://www.investopedia.com/terms/v/volatility.asp

Fidelity News!

How to retire in a bear market

There's still hope if you quit working when markets aren't cooperating.

  • By Andrea Coombes,
  • The Wall Street Journal
  • - 03/06/2016

For the first time in about seven years, investors approaching retirement may be facing one of their biggest financial fears: retiring into a bear market.

Before 2015, the stock market rose for six years in a row, despite many hiccups. Even last year, market averages set highs before sliding, and stocks are still in the red so far in 2016.

Taking less in weak markets and potentially taking more in up markets are strategies to help sustain a portfolio." Christine Benz, Morningstar

Now, savers have to think about "sequence of returns" risk:.....

Click Here to Read the Whole Article




How to avoid outliving your retirement nest egg

Nearing retirement or already retired? You're likely wondering how to make sure you don't outlive your savings.

One rule of thumb says that withdrawing 4% per year from your retirement savings can help minimize the chance you'll outlive your money. The hope is that the rest of your retirement nest egg will grow in value and/or pay dividends and interest income.

However, there are a few possible flaws in that scenario....

Click Here to Read the Whole Article 


Summit Financial Group of Indiana is an independent financial planning firm located in Lafayette Indiana. We are a firm that is operational with TIAA-CREF and Fidelity allowing for the creation and implementation of a customized financial plan for Purdue Faculty & Staff regardless of which platform you are using

Check the background of this firm/advisor on FINRA’s BrokerCheck.