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Industry News

The below highlighted news links and articles have been hand-picked by your WealthCoaches™ or are featuring your WealthCoaches™.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product, or any non-investment related content, made reference to directly or indirectly in this publication will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this publication serves as the receipt of, or as a substitute for, personalized investment advice from FirstWave Financial. A copy of the FirstWave’s current written disclosure statement discussing our advisory services and fees is available upon request.

FirstWave Financial® and Dimensional Fund Advisors (DFA) are not affiliated and any DFA article shared should not be considered an endorsement of Dimensional’s RIA. FirstWave Financial is not responsible or liable for the content of their articles and makes no guarantee as to the accuracy of the information contained within.

FEBRUARY 17, 2023 – VOLATILITY: THE COST OF HIGHER RETURNs

Ah.  Wouldn’t it be nice to make 10% per year, every year, on your investments where they never lost value?  Unfortunately, that is not how the financial markets work.  You won’t lose principal when investing in short term Treasury bills, but they have only averaged around a 3% return.  You must be willing to accept volatility of the value of your investments (occasional and recurring short- term losses) to make higher long-term returns.

In the following article, David Booth (Chairman and Founder of Dimensional Fund Advisors) describes the higher long-term returns provided by the S&P 500, above the returns provided by T-bills, as the equity risk premium the financial market pays to investors who are willing to subject their investments to the occasional and recurring short-term losses of the equity market.  This 7% equity risk premium has been consistent over the years, including over the last three.

An uncomfortable truth is that short-term equity market volatility is necessary for it to provide higher long-term returns.  A properly designed portfolio can take advantage of this dynamic while also providing the stability necessary for cash flow and peace of mind.  Contact a WealthCoach TM at FirstWave Financial to learn how. 

Disclaimer: FirstWave and Dimensional Fund Advisors are not affiliated. This information is provided for purely educational purposes.

“You should not assume that any discussion or information contained in this publication serves as the receipt of, or as a substitute for, personalized investment advice from FirstWave Financial. A copy of the FirstWave’s current written disclosure statement discussing our advisory services and fees is available upon request.”

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July 7, 2022 – Chasing High Flying Stocks Risks Meme Reversion

It can sometimes be very tempting to think we can pick the next hot individual stock before it “pops”. Or when, with the benefit of hindsight, we read about a stock that has recently had meteoric performance we can experience FOMO – Fear Of Missing Out. These are understandable emotions that can be combatted with the more reliable strategies of broad diversification and goals-based investing.

The attached article by Dimensional Fund Advisors titled “Chasing High Flying Stocks Risks Meme Reversion” does a great job describing what can happen if we succumb to the emotional appeal of a get rich quick stock pick. Such a strategy is more like gambling than investing. In gambling you sometimes win big, but in the long run the house always wins and the odds are stacked against you. It can be entertaining to gamble with a few bucks occasionally, but you would never take a large portion of your life saving and place it on horse number 5 to win, nor should you on the next hot stock. 

Through the diversified investment strategies used at FirstWave Financial, you own these high-flying stocks and all their competitors, large and small, in the global capital marketplace. This allows you to benefit from their appreciation with much less downside risk than by owning them individually.  

To find out how we can help you transform the complexity and confusion surrounding this important topic into your improved WealthConfidence, call us today (321) 773-7773 to schedule your free initial consultation with one of our WealthCoaches™. 

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Navigating Geopolitical Events

April 28, 2022

By FirstWave®Financial The US stock market is still bigger than all the rest combined, representing 57% of the world’s stock marketing capitalization. This combined with the fact that we are simply more comfortable investing in companies that are located in our country than those that are located abroad contributes to what is referred to as a domestic bias. This domestic bias can be further encouraged when geopolitical events such as Russia’s invasion of Ukraine are added to the investing environment. It is hard enough to keep track of what is happening in our own country, let alone the rest of the world. But, if as Americans, we limit our investments to only US companies, we run the risk of missing the performance available from almost half of the world’s economy. How can we balance the risk and potential return? The attached article “Navigating Geopolitical Events” from Dimensional Fund Advisors summarizes the specific actions that have been taken considering the most recent Russian aggression and more broadly the strategies and actions they use to help mitigate risks of investing internationally while attempting to capture the returns that are available there. To find out how we can help you transform the complexity

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Best Time To Invest

March 17, 2022

By FirstWave®Financial “I don’t want to invest now. The market is at or near its all-time high. I will wait for a better  buying opportunity.”  Sound familiar? This appears to be a very logical point of view, but it is not supported by the historical performance of the stock market. The Dimensional Fund Advisors titled “Why a Stock  Peak Isn’t a Cliff” shows that the average returns one, three, and five years after a new month-end market high are similar to the average returns over any one, three, or five-year period.  Another problem is that it has been shown repeatedly that trying to time the market is a bad idea.   Take 2020, for example. During 2020, the S&P 500®Index saw a total return of 18.4%. If you were invested during that volatile year, you’d have done pretty well. But if you’d sold when the market dropped, not only would you have locked in your losses, you’d also have potentially missed out on those trading days with the greatest gains, which would’ve meant even bigger losses. For instance, if you’d missed the top 10 trading days of 2020, you’d be down 32.9%.  If you’d missed the top 40 days, you’d be

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October 11, 2021 – Will Inflation Hurt Stock Returns? Not Necessarily

Current financial headlines are dominated by alarm bells about the recent increases in the prices of goods and service (inflation) and further warnings that it is going to get worse. We can certainly see and feel this upward trend in the cost of everything from gas for fueling our cars, to electricity for heating and cooling our homes, to food for filling our bellies, requiring more of our financial resources to live day to day.

But what about the effect of inflation on stock values? The following article written by Dimension Fund Advisors includes a summary of the annual performance of the S&P 500 and the annual rate of inflation for each of the last 30 years. As the article states, “A look at equity performance in the past three decades does not show any reliable connection between periods of high (or low) inflation and US stock returns.”

This is yet another reason why maintaining a diversified investment portfolio designed in coordination with your unique investment plan increases your likelihood of a successful investment experience during these periods of uncertainty. Please feel welcome to speak with your FirstWave Financial WealthCoach about this or any other matters you may wish to discuss.

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June 9, 2021 – YOLO, Meme, and EMH: What’s your investment style?

Meme stocks – What are they? Are they for you?

AMC, GameStop, Reddit, Robinhood, Meme stocks. Even as long-term investors who deliberately ignore the latest investing fads, you cannot help but see these names in recent headlines around social media created stock volatility. Are these social media investors upsetting proven principles of investing or is their internet-based trading just a faster way to facilitate speculative gains and losses, like on-line gambling? The attached article by Dimensional Fund Advisors addresses this question and more. Please feel welcome to speak with your FirstWave Financial WealthCoach about this or any other matters you may wish to discuss.

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March 18, 2021 – To Bit or Not to Bit: What Should Investors Make of Bitcoin Mania?

Bitcoins and other crypto currencies have certainly created quite a stir, and not just in the digital world of gaming and virtual reality. The article below by Dimension Fund Advisors explores the characteristics of these new currencies and the role they may play in a diversified investment portfolio. Please feel welcome to speak with your FirstWave Financial WealthCoach about this or any other matters you may wish to discuss.

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January 6, 2021 – Market Review 2020: Looking Back on an Unprecedented Year

The year 2020 proved to be one of the most tumultuous in modern history, marked by a number of developments that were historically unprecedented. But the year also demonstrated the resilience of people, institutions, and financial markets.

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July 13, 2020 – 10 ‘Hot’ Dividend Stocks Backfire on You And Warren Buffet

Think chasing big S&P 500 dividends is a savvy thing to do? 2020 served up yet another reminder that this is a costly and flawed strategy.

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April 17, 2020 – History Shows That Stock Gains Can Add Up After Big Declines

Sudden market downturns can be unsettling. But historically, US equity returns following sharp downturns have, on average, been positive.

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March 17, 2020 – An Update from Dimensional’s Co-CEOs on COVID-19 Response

Being prepared for a wide range of outcomes and adapting to new information is the Dimensional way.

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March 5, 2020 – Tuning Out the Noise

For investors, it can be easy to feel overwhelmed by the relentless stream of news about markets. Being bombarded with data and headlines presented as affecting your financial well-being can evoke strong emotional responses from even the most experienced investors.

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January 24, 2020 – How Markets Work and the FAANG Mentality

Is the market getting by with a little help from the FAANGs? And does their performance stand out historically? Investors may be surprised that it’s common for a subset of stocks to drive a sizable portion of market returns.

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October 15, 2019 – Medicare open enrollment is underway

Here’s what’s new and what to watch out for.
It’s the time of year for people on Medicare to give their coverage a checkup. The program’s annual enrollment period runs from Oct. 15 through Dec. 7, which is when you can make changes to your coverage that will take effect Jan. 1.

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June 19, 2019 – Federal Reserve expresses concern about U.S. economy and signals interest rate cuts are likely

The Federal Reserve on Wednesday raised concerns the economy is slowing and sent its strongest signal to date that it could act soon to cut interest rates, a move that would plunge the central bank into unusual territory.

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March 14, 2019 – Trump Outlines A Significant Security Cut to His 2020 Budget.

This past Monday, March 11, President Trump unveiled his fiscal 2020 budget proposal for the federal government.

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December 28, 2018 – Here’s the Prescription

As much as I value the unfettered access to information the internet provides, I recognize the potential harm that too much information can cause.

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June 13, 2018 – Foreign currency? No thanks. Investors prefer their own currencies and the US dollar

Globalization and integrated financial markets allow companies and investors worldwide to work together more closely—but investors still strongly prefer to buy assets in their own currency or in the US dollar.

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February 09, 2018 – The Importance of Uninsured/Underinsured Motorist Coverage

Although uninsured/underinsured motorist coverage is slightly more expensive than the minimum coverage required by Florida law, it is absolutely essential in a time of need.

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July 24, 2017 – 5 Ways White House Can Use Its Muscle To Undercut Obamacare

President Donald Trump has vowed to “let Obamacare fail,” after legislative efforts to undo the Affordable Care Act have stalled.

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April 20, 2017 – Number of People Collecting Unemployment Checks Hits 17-Year-Low, Jobless Claims Show

The number of out-of-work people collecting unemployment checks fell to a 17-year low in April, underscoring the strongest U.S. labor market in years.

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January 15, 2017 – 10 Quick Facts About the Upcoming Tax Season That You Need to Know

Ready to file your tax return? Forbes provides 10 facts about tax season that you need to know.

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December 6, 2016 – 9 Tech-Friendly Gifts for People Obsessed with Travel

While we can’t help you shop for everyone in your family, we can help you choose a gift for the travel-lovers on your list. Whether they travel for business or adventure, here are 9 tech gifts for the globetrotter in your life.

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October 31, 2016 – Hudson’s Booksellers Announces the Best Books of 2016

Hudson Booksellers, a brand unit of travel retailer Hudson Group and one of the most prominent book retailers in the country, has announced its list of the Best Books published in 2016.

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August, 2016 – History on the Run

When news breaks and markets move, content-starved media often invite talking heads to muse on the repercussions. Knowing the difference between this speculative opinion and actual facts can help investors stay disciplined during purported “crises.”

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June, 2016 – 10 Reasons to be Cheerful

Do you ever listen to the news and find yourself thinking that the world has gone to the dogs? The roll call of depressing headlines seems endless. But look beyond what the media calls news, and there also are a lot of things going right.

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January, 2016 – 2016: 10 Predictions to Count On

The New Year is a customary time to speculate. In a digital age, when past forecasts are available online, market and media professionals find it harder to hide their blushes when their financial predictions go awry. But there are ways around that.

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November 13, 2015 – Sen. Warren blasts annuity sales incentives

Vacations at luxury resorts, golf outings, and other incentives have led to inappropriate sales of annuities, Sen. Elizabeth Warren, D- Mass., claimed in a study released Tuesday.

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September 16, 2015 – Dimensional Fund Advisors posts 77th consecutive month of positive sales

While FirstWave Financial has been using DFA’s funds and investment principles since 2003, it appears others are now beginning to see the light.

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August 26, 2015 – 5 Things Investors Shouldn’t Do Now

Stocks slumped world-wide this week, with U.S. and European markets off more than 5% and the Shanghai Composite Index losing more than 11%. Oil prices also skidded, dropping more than 6%. Traders feared that slowing growth in China, the devaluation of the Chinese currency and the overhang of too much debt could stifle global economic recovery. Here are five things you should know about how not to react.

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July 23, 2015 – Greece is the Word

In recent weeks, the world’s markets and media financial pages have focused intensely on the standoff between debt-laden Greece and its international lenders over the conditions of any further bailout.

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Feb. 18, 2015 – Has The Trend Toward Later Retirements Played Out?

Since working longer is the key to a secure retirement for the vast majority of older Americans, it is useful to take a look at recent labor force trends.

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Feb. 17, 2015 – Retirement: Boomers Want To Keep Working – If They Can

George Fraser has had a hugely successful life. At 70, the former corporate executive is a successful author and speaker, traveling 200 days out of the year and logging 250,000 air miles.

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Feb. 2015 – When Underperforming The S&P 500 Is A Good Thing

As financial advisers roll through annual client reviews, many will be experiencing a similar task of having to explain how their portfolio strategies so badly lagged the 13.7% gain by the S&P 500 Index last year.

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July 15, 2014 – Hey Graduates, Here Are 7 Keys to a Happy Life

Last week, I was in St. Louis to watch my son graduate from Washington University. What fatherly advice do I want to pass along to Henry, as he sallies forth into the adult world?

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July 15, 2014 – A Kinder, Gentler Reverse Mortgage

The rules for securing a reverse mortgage are getting tougher. And most financial advisers say that’s a good thing.

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July 15, 2014 – How to Weigh Student-Aid Offers

The Biggest Package Might Not Be the Best Package.

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April 2014 – Connecting the Dots

Human beings love stories. But this innate tendency can lead us to imagine connections between events where none really exist. For financial journalists, this is a virtual job requirement. For investors, it can be a disaster.

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January 2014 – The Golden Ticket Trap

In a popular children’s story, the young hero pins all his hopes on finding one of a handful of “golden tickets” hidden among millions of candy bars. It seems many people approach investing the same way.

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October 21, 2013 – What Retirees Should Do When the Kids Come Back

You’re sitting pretty in retirement. Kids gone. Empty house. Vacations. Hobbies. Walks.

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October 14, 2013 – Best Road-Trip Apps for Holiday Travels

If you are setting out on the road this fall or winter, plug in your car-charger and smartphone because you can bring along a ton of collective wisdom in the form of great road-trip apps.

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October 10, 2013 – 10 Cures for the Chronic Overpacker

Can’t seem to travel without an overstuffed bag? We’re here to help.

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July 2013 – “Student Lenders Are Pressed to Ease Terms”

Regulators Want Private Firms in Market to Lower Payments for Unemployed and Other Borrowers.

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July 2013 – “Letters About 401(k) Plan Costs Stir Tempest”

Yale Law School Professor Tells 6,000 Companies He Plans to Publicize His Study.

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July 2013 – “It’s Our Kids’ Money. But Is It Really?”

Parents should have veto power over how children spend their own savings.

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July 2013 – “The Intelligent Investor: Saving Investors From Themselves”

The temptation to pander is almost irresistible. And while people need good advice, what they want is advice that sounds good.

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July 2013 – “A New Senior Moment”

Zumba classes, sushi chefs and kilns in the crafting room: the newest generation of 55-plus communities caters to active—and demanding—retirees.

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April 2013 – “Get Off the Beaten Path for Vacation Deals”

Higher airfares and overcrowded flights will boost your vacation bill this year, making it a good time to take the roads less traveled on summer retreats.

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April 2013 – “Tap Your School for Job-Hunt Help”

It wasn’t until after Christopher Morel graduated from Pennsylvania State University that he realized how helpful the school could be in his job search.

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April 2013 – “In Applying to College, Is Cost a Factor?”

When it comes to our oldest daughter and college, we are in a place that most parents would envy.

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September 2012 – “How Not to Blow It With Financial Aid”

Common mistakes parents and students make when seeking help with college costs.

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September 2012 – “The Best Gear for the School Year”

Here are the latest high-tech tools for starting the semester out right.

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July 2012 – “Is Gold Worth Its Weight in a Portfolio?”

Do the benefits of holding gold outweigh the risks? Read this article to learn more.

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July 2012 – “In Picking Facebook Shares, Repeating the Mistakes of the Past”

Here is a timely article showing that most individuals have a negative return when picking individual stocks

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June 2012 – “The Eurozone and Greece: A Client Update”

Our calm, disciplined approach puts the European crisis in perspective.

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June 2012 – “The Death of Equities, Revisited”

Here is an article comparing the current news to an August 13, 1979 article in BusinessWeek.

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February 2012 – “The Good Old Days?”

The hardest arithmetic for human beings to master is that which enables us to count our blessings.

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March 2010 – “Rebalancing Act”

Global diversification gives investors a valuable tool for managing risk and volatility in a portfolio. But smart diversification has an important side effect. It requires maintenance.

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