LifeSteps Financial Briefing | March 2019
Henry's Take
The New Normal is almost an understatement these days. It seems like every day brings unexpected news. From tariffs and trade deals to scandals and catastrophic incidents, the events locally, nationally and worldwide are impacting the way fund managers and traders respond to the new normal. With volatility being more of a constant, we are often asked about alternate investments. Many of our clients have investments outside of the funds that we manage. After all, most people own a home, which is an investment. Others include commercial property in their portfolio of assets. And, others take larger risks by investing in more non-traditional options. 
It’s important to look at options with an unbiased perspective. Taking the emotion from the “sales pitch” out, there are ways to evaluate alternative investments and assess risk. We explore a few such investments in this Briefing. As always, we are open and available to help make those assessments when investment opportunities present themselves. 
Henry Ford, Principal
Managing Financial Wellness
Unconventional (Alternate) Investment Opportunities
Financial Advisors often get asked about Investment Opportunities outside of the mainstream. While these options are not typically offered as part of a Financial Plan, a professional financial advisor can provide insight and help evaluate the upside and the risk in these types of investment options.

There are numerous alternate, or unconventional, investment options. The three that have been raised recently by clients are Life Insurance, Mortgage Notes and Cryptocurrencies.

An investment in life insurance can make sense, especially when creating a means to protect beneficiaries from dipping into business assets after the death of a business owner. Asset classes such as mortgage notes and cryptocurrency can be attractive to investors seeking passive income. However, they can come with risks. Turning a non-performing note around can be a challenge and investing in cryptocurrencies requires considerable effort and acumen. With thorough due diligence and perspective from your professional financial advisor, you can assess the potential value of the investment and identify, and perhaps mitigate, some of the risk while evaluating yields.
The Facts

39% of Millennials have accumulated no funds for their eventual retirement. Millennials were born between 1981-97 and are age 22-38 in 2019 .

Source: Personal Capital
Used with permission
from By the Numbers

A November 2018 survey of 1,161 employed adults determined that the average age at which this group began saving for retirement was 31 years old . The most common reason given for not starting sooner was “ not making
enough money .”

Source: Nationwide Retirement Institute
Used with permission
from By the Numbers   
Real Estate Investment Trusts (REITS)

A real estate investment trust, known as a REIT, is a company that owns income-producing property. As a small investors, you can purchase shares of a REIT (if they are publicly traded) through an ETF or mutual fund.

There are several types of REITS. Two of the most common are Equity REITS and Mortgage REITS.

Equity REITs own and manage income-producing real estate. The model for these REITS is to buy properties (i.e. office buildings, retail centers, hotels) and lease those properties to tenants. The REIT should make money from the rent and also from the appreciation of property values.

Mortgage REITs are based on mortgage-backed securities. The mortgage REIT borrows money at a low short-term interest rate and purchases mortgages that have a higher longer-term interest rate. The difference between the two sets of interest rate is the profit the REIT makes.

Generally, Equity REITs are less volatile than mortgage REITs, since they invest in long term property acquisition.
Giving Back
This month's featured organization is  Mt. San Antonio Gardens.

Mt. San Antonio Gardens, fondly known as “The Gardens”, is a nationally recognized Life Care community in southern California where residents cherish their independence and continually expand their interests and explore new life experiences.

Henry Ford has just been appointed to the Board of Directors and Finance Committee for Mt. San Antonio Gardens.
Henry Ford of  LifeSteps Financial  predicts the 2019 New Normal: Volatility and Financial Wellness. Volatility and Financial Wellness can live harmoniously, when financial planners keep a close eye on investments and understand the risk tolerance of client, and clients understand that investments are part of a long-term strategy. Read More...