Tag Archives: Money

Suddenly Single: Planning to Go It Alone

Untitled-logo trustMost of us cannot imagine the sudden loss of our spouse. Yet, difficult as it may seem to accept, U.S. Census data indicates that the overwhelming majority of married women will be on their own for a significant number of their later years. Should this happen to you, you might be thrust into economic self-survival at a time when you may feel particularly vulnerable and least able to cope. Nevertheless, serious decisions would have to be made, often having a lasting impact on your future financial well- being.

Planning for the Unimaginable

There is an unpredictable aspect of “sudden loss” in that we never quite know how we will react to certain events until they actually occur. While no one can ever be totally prepared to deal with personal trauma compounded by legal and financial matters, there are steps you can take to help you navigate through this difficult period.

The key is to find a way to help provide structure in your life at a time when structure may be disintegrating.

It Happened. . .What Do I Do?

When the initial shockwaves hit, there are matters that will require immediate attention: notification of family and friends; funeral arrangements; and contacting an attorney to review the will and handle the legal aspects of your spouse’s estate. Let your closest friends and most trusted advisors help you with some of these details and short-term decision-making, but proceed with caution regarding major financial decisions such as whether to sell your home, borrow or lend money, invest, make major purchases, and make work/career changes.

During this period, you will most likely face competing demands on your financial resources. If your spouse was the primary income earner, it may take some time to assess your financial situation. During the first few months, pay bills that need to be paid, but spend cautiously, paying attention to cash flow and liquidity.

Rebuilding After the Shockwaves

Certain timetables (e.g., timely filing of tax returns) can’t be overlooked, but much of the financial recovery process should be orchestrated to match your emotional recovery. Some of the important aspects that will have to be addressed eventually will include assessing the needs of dependent children; making housing decisions; determining your income needs; making decisions about insurance settlements; evaluating your insurance needs; and managing money on your own.

Many of these decisions may flow naturally from an appraisal of your needs (and/or desires) to participate in the workforce. Will you want to work? Will economic necessity dictate that you must work? If you are currently employed, will you stay in the same position? If you have not worked for some years, how well will your skills fit the job market? Will you need to acquire more education or enhance your technical skills?

While professional advice will be helpful, don’t allow yourself to be pressured in areas in which you need more time. Your goal should be to develop a sense of command and control concerning your financial future. Align yourself with advisors who will have the patience to work with you at your pace, advisors who will help you gain the knowledge and confidence necessary to go it alone.

Obviously, the earlier you begin to educate yourself concerning financial matters, the better prepared you will be to withstand the impact of facing sudden loss. The quality of your life may depend on your financial skills and your willingness to take responsibility for managing your own financial affairs.

If you have questions about the financial implications of divorce, email our Certified Divorce Financial Analyst, Marcia.Henderson@syb.com, for help!

Resource information provided by Financial Media Exchange.

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7 Tips for Choosing a Financial Caregiver

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According to the National Council on Aging, almost 90 percent of the financial abuse committed against older Americans is done by someone they know. More than ever, it is imperative for seniors to select a trustworthy person to properly manage their finances and personal affairs.

Fraudsters often prey on seniors experiencing cognitive decline, limited mobility and other disabilities that require them to rely more heavily on others for help. Appointing someone you trust to handle your financial matters aids tremendously in the fight against these crimes.

In recognition of May as Older Americans Month, we want to share seven tips to help choose the right financial caregiver and prevent financial abuse:

  • When delegating financial decisions, make sure it’s someone you trust. If you are unable to facilitate financial transactions, carefully choose a trustworthy person to act as your agent in all financial matters.
  • Know who is in your home. Conduct a thorough background check on all individuals you hire for personal care or home care services. Check references and credentials before you let them into your personal space.
  • Never sign something you don’t understand. Consult with a financial advisor or attorney before signing any document that appears suspicious or unclear.
  • Understand the terms of assigning a Power of Attorney. Granting someone POA gives them the authority to act and make decisions on your behalf, including managing and having access to your bank and other financial accounts. Make sure you fully understand the terms and conditions of consenting a legal agent before you do so.
  • Always trust your instincts. Exploiters and abusers are very skilled. They can be very charming and forceful in their efforts to exploit you. Don’t be fooled – if something doesn’t feel right, it may not be.
  • Safeguard your personal information. Shred old bills, junk mail, bank statements and other personal documents you no longer need. Leaving unwanted personal documents around the house could lead to the misuse of your information. If you come across keepsake documents opt to store them in a locked cabinet or safe deposit box at your nearest bank.
  • Keep personal items out of plain sight. Lock up checkbooks, credit cards and other monetary instruments to prevent unauthorized use.Resource information provided by the American Bankers Association.

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Market Update

by Mark Holloway & Paul Stropkay

Stock Yards Bank Wealth Management and Trust

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markApril 3, 2018

Dear Clients and Friends,

We were all spoiled by last year’s 21% return and low volatility in the stock market.  Yesterday’s 458 drop in the Dow was just the most recent of several days with large point declines in the major stock market indices that began with the 1,032 point drop on February 5th.  The market is now down approximately 3.0% year to date.

Market volatility is traumatic for investors who forget that, while stock prices may be erratic, the fundamental value of quality businesses is actually quite stable.  Over time, price and value tend to converge.  Alert investors can take advantage of opportunities that price volatility provides.  We are encouraged by the growth in corporate profits that we are seeing this year and remind ourselves that stock valuations are reasonable in the context of history.

That said, what is causing the wild market swings?  Increasing interest rate expectations from the Federal Reserve have added a level of uncertainty.  Late last year, most analysts believed that we should expect two and possibly three increases in rates during 2018.  That expectation is now up to four increases based on the strength of the economy and renewed inflation fears related to full employment.  Full employment generally brings increasing wage pressure and has historically been an omen of future inflation.  Increasing interest rates are a threat to economic activity, increase costs for companies that borrow, and pose competition to stocks for new investment dollars.

Secondly, the drama and political turmoil in Washington has added to uncertainty.  The high rate of turnover in key areas of the Trump advisory team including Secretary of State and Chairman of the Economic Advisors rattled the markets.  The failure of Congress to pass an acceptable budget also added to the feeling of political dysfunction.

The third and most important cause of the recent volatility is the discussion of tariffs.  The Trump administration wants to impose tariffs on imported steel and other products.  Tariffs are essentially taxes on imported goods.  Exporting countries seldom sit by idly and accept these taxes.  They retaliate with tariffs of their own.  Remembering our economic history, tariffs were one of the reasons the great depression was so severe and prolonged.  The global trade war that resulted set back economic growth for a decade.  Fear of slowing global growth resulting from a new trade war has rattled markets.  We can only hope that this is part of the “art of the deal” and that the new administration is trying to force our trading partners back to the negotiation table.

We still believe that we are in a secular bull market for common stocks.  A secular bull market is a market in a general uptrend with higher highs and higher lows in absolute index price levels.  This does not mean that there will not be corrections.  The attached chart shows that stock market declines in secular bull markets of 5%, 10%, or even 20% should be expected.  Larger declines have only happened during recessionary periods.  There are no signs that the economy is heading for a recession in the near future.  In fact, economic growth is accelerating.stock vot.jpg

It is important to keep things in perspective.  The 500 point drop in 1987 represented a 21% decline.  The nearly 500 point drop yesterday was only a 1.9% decline on today’s much higher market level.

Remember, no one can time the market.  It is against human nature and too many consecutive correct decisions must be made very quickly to ever be successful.  It is important to stay invested for those good days that make all the difference in portfolio performance.  As the attached chart shows, many times these bounce-backs happen immediately after days like yesterday.neg days.jpg

We appreciate your continued trust and confidence.

The Wealth Management & Trust Group

Stock Yards Bank & Trust

 


The Wealth Management Group

KATHY THOMPSON, J.D., Senior Executive Vice President, (502) 625-2291
E. GORDON MAYNARD, J.D., Managing Director of Trust, (502) 625-0814
MARK HOLLOWAY, CFA, Chief Investment Officer, (502) 625-9124
SHANNON BUDNICK, CTFA, CFP®, Managing Director of Investments, (502) 625-2513
PAUL STROPKAY, CFA, Chief Investment Strategist, (502) 625-0385

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE


We provide the information in this newsletter for general guidance only. It does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, investment, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, expressed or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

Market Update

by Mark Holloway & Paul Stropkay

Stock Yards Bank Wealth Management and Trust


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Having enjoyed relative calm in the capital markets, as well as all-time highs across a variety of equity indices during 2017 and into the first month of 2018, many investors were stunned by price volatility in stock and bond markets this afternoon.  While price volatility may feel unsettling, we are aware that secular bull markets are often temporarily interrupted by intermittent downdrafts in market prices.

So, what happened today?  Early reports cite computerized trading as the source of market price volatility.  A more fundamental cause may be that interest rates have risen in recent weeks and offer current yields that investors have not seen in recent memory.  At some level of interest rates, bonds compete with stocks.

Famous value investor Benjamin Graham is attributed with the following quote: “In the short run, the market is a voting machine but in the long run, it is a weighing machine.”  As long-term investors, we weigh the wealth-creating power of the companies we have purchased for our clients’ portfolios and welcome investment opportunities that price volatility provides.

As always, we will continue to monitor developments in the economy and in the capital markets with our clients’ portfolios in mind.  Rest assured that our commitment to quality, liquidity, and risk management will not waiver.

Should you have any questions or concerns, please contact your investment officer at Stock Yards.  We always welcome the opportunity to discuss your objectives and to develop an investment portfolio to help you reach your goals.


Wealth Management & Trust

KATHY THOMPSON, Senior Executive Vice President, (502) 625-2291
E. GORDON MAYNARD, Managing Director of Trust, (502) 625-0814
MARK HOLLOWAY, Chief Investment Officer, (502) 625-9124
SHANNON BUDNICK, Managing Director of Investments, (502) 625-2513
PAUL STROPKAY, Chief Investment Strategist, (502) 625-0385

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE


We provide the information in this newsletter for general guidance only. It does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, investment, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, expressed or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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4 TIPS TO GET FINANCIALLY FIT

The New Year is an ideal time to set new goals, as many vow to become more physically fit or get organized.  The New Year is also a great time to assess your finances, gain control and stick to a new budget or saving plan. Taking control of your personal finances will allow you to save and prepare for unexpected expenses.

Get financially fit this January.  Follow the tips below to get started.

Get Organized Consider treating yourself to a post-holiday gift of a financial organization system.  Alphabetized file folders, or filing systems specifically for financial organization are available in January as people begin to prepare for tax season.  Take advantage and start the New Year with an organizational system.  While you’re getting organized, consider buying a shredder to keep your personal information safe from identity theft.

Create a Budget Track your income and expenses to see how much money you have coming in and how much you spend.  If you have debt, establishing a budget will help you to pay down your debt while saving. Use computer software programs or basic budgeting worksheets to help create your budget.  Include as much information as you can and review your budget regularly.  Print several copies of this budgeting worksheet to help you get started.

  • Identify how you spend your money.
  • Set realistic goals, especially if you plan to cut some of your expenses.
  • Track your spending and review your budget often.
  • Points to consider when cutting debt:

Lower Your Debt Debt from student loans, mortgages and credit cards is nearly unavoidable.  Most families carry about $10,000 in credit card debt.  Spending more money than you bring in can lead to financial stress.  Establish a budget to pay down debts while you save.

  • Pay more than the minimum due and pay on time.
  • Pay off debt with higher interest rates first.
  • Transfer high rate debt to credit cards with a lower interest rate.
  • Use credit cards and loans for purchases that will appreciate in value like a home.

Save for the Unexpected and Beyond Pay yourself first.  Saving is important; it ensures a comfortable future that can endure financial surprises.  No matter how old you are, it’s never too late to begin saving.

  • Save at least 10 percent of your income for retirement.  Enroll in a retirement plan or consider optimizing an established retirement plan.  Contribute at least the maximum amount that your employer will match.  Contributions made to these types of plans are tax deductible.  If your employer does not offer a retirement savings plan, many banks offer Individual Retirement Accounts.  IRAs offer tax-deferred growth, meaning you pay taxes on your investment gains when you make withdrawals.
  • Financial advisors often recommend keeping about three months’ salary in a savings account in case of financial emergencies like hospital bills or loss of job.
  • Increase your contribution as your income increases.
  • If you receive direct deposit at work, ask your employer to send a specific amount to your savings account.  Because the money is put into an account before you have a chance to spend it, automatic savings plans are an easy and convenient way to save.  If your employer doesn’t offer direct deposit, many banks allow for automatic transfers from checking to savings accounts.

Resource information provided by the American Bankers Association

INVESTMENT INSIGHTS

by Joan Schade

Stock Yards Bank Wealth Management & Trust


We all like to plan and dream about how we’ll spend our retirement years. What does your plan look like? Will you travel, play golf, garden, or visit with friends and family? Maybe you’re planning to move, or perhaps you’d simply like to spend some time relaxing and enjoying some well-earned rest. Sometimes, however, unplanned events arise that leave us stunned and thinking, “What just happened?” Fortunately, if we have the right type of insurance in place it can make dealing with the unexpected a whole lot easier.

When you start to plan for your retirement years it is always a good idea to review the insurance you already have in place. Consider if your needs or objectives have changed since you made the original purchase. For example, was your term policy to insure that your children’s education would be covered or that your house would be paid off should something happen to the main bread winner? If your children are grown and there are only a few payments left on the mortgage, your current policy may not be the right type of protection needed at this stage in your life.

Purchasing insurance to provide some income for a surviving spouse is common, but you may also want to look at a long-term care policy. Without the right kind of insurance, you could be forced to use all of your hard-earned savings, including your retirement savings to pay for care. The cost of such needs continues to grow by leaps and bounds. Long Term Care Insurance policy options have grown as well in the last decade. As opposed to the “use it or lose it” options in years past, many policies now offer a wide array of hybrid products that will allow you and/or your spouse to use what you need and pass any remaining dollars on to your beneficiaries tax-free.

Insuring for the right purpose today could protect the quality of your retirement years. Wouldn’t we all like our retirement dreams to come true?

For more information about Investment Plans, please contact our Wealth Management and Trust Department.