Financial Insights

KCM On Balance – June 2022

“There will always be bull markets…followed by bear markets…followed by bull markets.” – John Templeton

May has been a challenging month for investors, as markets continued to respond negatively to shifting interest rates, supply chain snarls, inflationary pressures, and geo-political challenges.  The sell-off has been broad and deep, pushing the S&P 500 and NASDAQ down for a seventh straight weekly loss, the longest such stretch since the dot-com bubble burst, while the Dow Jones Industrial Average slid for an eighth straight week, its longest streak since the height of the Great Depression in the 1930’s, before breaking the streak and staging a turn around the last week of the month.

Market cycles are measured from peak to trough, and a stock index is considered to have entered “bear market” territory when the closing price drops at least 20% from its most recent high.  This month we watched the S&P 500 flirt with bear market levels (dipping below 20% in intraday trading), while the more tech-centric NASDAQ has been in bear market territory since March.

Bear markets are an inevitable part of investing.  They are normal – since 1928 there have been 26 bear markets interspersed among 27 bull markets.  Thankfully, they tend to be shorter in duration -the average length of a bull market during that period was 2.7 years (991 days), while the average bear market only lasted 9 months (298 days).

The idea of stepping out during a bear market downturn is certainly alluring, however, some of the best days in the market occur during a bear market.  In fact, half of the S&P 500’s best days in the past 20 years have occurred during a bear market.  Miss just a few of those and the negative impact to long term returns can be significant (see article below).

The seeds of the next bull market are sown in the depths of the bear, and the investor who stays disciplined and focused on their long-term goals is best positioned to enjoy the rewards associated with them over time.

Articles of Interest

The Cost of Trying to Time the Market

The impact of being out of the market for a short time can be profound. Staying invested and focused on the long term helps to ensure that you’re in position to capture what the market has to offer. For example, a hypothetical $1,000 investment made in 1997 in the Russell 3000 turns into $10,367 for the 25-year period ending December 31, 2021. Over that 25-year period, miss the Russell 3000’s best week, which ended November 28, 2008, and the value shrinks to $8,652. Miss the best three months, which ended June 22, 2020, and the total return falls to $7,308.

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Here’s How Much Health Care Will Cost Once You Retire

It’s a big misconception that living costs drop drastically in retirement. The reality is that some of your expenses might get lower, but some might also rise. Healthcare is likely to fall into the latter category. That’s because medical issues tend to arise as we age, and also, because Medicare, which seniors commonly rely on starting at age 65, has its limitations. In fact, the average 65-year-old male-female couple retiring now should expect to spend a whopping $315,000 on medical costs. That figure assumes enrollment in Medicare Parts A, B, and D.

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Are You Maximizing Your Tax-Exempt Bucket?

Paying state and federal taxes is part of life. Yet, we all want to keep hold of as much of our income as possible too. That’s where the grown-up version of hide-and-seek comes in. The more legal “hiding places” we can find for our money, the more we can stop the government from taking too large a cut. Winning this particular game relies on having a tax-efficient financial plan.

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A Financial Guide on What to Do After College

As college seniors march off into the world to the strains of “Pomp and Circumstance,” they may not all be thinking of what comes next: navigating their first job, setting up retirement savings, tackling debt, setting up their first investments … the list goes on. To help with the many “firsts” that they will experience after graduating from college, Morningstar has built this comprehensive resource guide.

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How is Kemper Capital Management Different?

In this webinar from May 2022, Symmetry’s Tom Romano, Director of Business Development, sat down with Ben Russell, Financial Advisor with Kemper Capital Management,  to discuss the Kemper Capital Management planning and investment experience.

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Advisory services offered through KCPAG Financial Advisors LLC and insurance services offered through KCPAG Insurance Services LLC, subsidiaries of Kemper Capital Management LLC. Tax services offered through Kemper CPA Group LLP.

Symmetry Partners, LLC, is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered, or excluded or exempt from registration requirements. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission.

No one should assume that future performance of any specific investment, investment strategy, product, or non- investment related content made reference to directly or indirectly in this newsletter will be profitable. You should not assume any discussion or information contained in this email serves as the receipt of, or as a substitute for, personalized investment advice. Symmetry does not provide tax or legal advice and nothing either stated or implied here should be inferred as providing such advice. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.

Investors cannot invest directly in an index. Indexes have no fees. Historical performance results for investment indexes do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee, the occurrence of which would have the effect of decreasing historical performance results. Actual performance for client accounts will differ from index performance.

S&P 500 Index represents the 500 leading U.S. companies, approximately 80% of the total U.S. market capitalization.

The MSCI EAFE Index is an unmanaged group of securities and is considered to be representative of 21 developed markets, excluding the U.S. and Canada. Past performance is no guarantee of future results.

The MSCI EM Index is a selection of stocks that is designed to track the financial performance of key companies in fast- growing nations. It is one of a number of indexes created by MSCI Inc., formerly Morgan Stanley Capital International.

NASDAQ COMPOSITE INDEX The Nasdaq Composite Index is a market capitalization-weighted index of more than 3,700 stocks listed on the Nasdaq stock exchange.

TREASURY Bloomberg Barclays US Treasury TR: U.S. Treasury Inflation Protected Securities Index provided by Morningstar Direct. The index includes all publicly issued, U.S. Treasury inflation-protected securities that have at least one year remaining to maturity, are rate investment grade, and have $250 million or more of outstanding face value.

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