Category: Investing

A NEW Investment Perspective

November 10, 2023

by Ron Bare

Beginning to see something with a new perspective changes everything. Many years ago, when you first saw your now-spouse as more than just a friend, it changed everything, didn’t it? When you began to see your job as a calling, it changed everything, didn’t it? And when you started to see your finances as a gift from the Lord and something to be stewarded for His glory, it changed everything, didn’t it?

We believe this same principle can be true with the stock market. If you can start to see the stock market in a new light, it just might change everything. What if instead of seeing your investment as tied to an obscure thing that we have named “the stock market,” you began to see your investment tied to real companies? And not just any companies, but some of the best in the world.

Do you think that would change things? I know it has for me.

All of a sudden instead of investing in an unpredictable, volatile stock market, you become a shareholder in some of the best businesses in the world. When you invest your assets into these companies, you become a part owner and share in their profit. You get to be a part of what each of these companies is doing and how they are impacting the world for the better.

We believe there are a few reasons that this mindset shift is critical.

First, it’s a whole lot easier to trust businesses than the stock market, right? Each business you invest in through the stock market has a business plan, financial advisors, CFO’s, CEO’s, Boards, and marketing professionals to help them be successful. They strive to make the best decision for themselves and their customers. If they start to lose money because of the decisions they’re making, they’ll change what they’re doing. And when these businesses do well, so does the stock market, because they are the stock market.

But what about when crises hit? You know it as well as I do – they’re inevitable. Yet as we look back through time through various crises – COVID, crises in the Middle East, or others, we see a trend in the market values of publicly traded companies. Not only do these companies survive, they often come out stronger on the other side of the crisis. And historically, if you stayed invested over a long period of time, your overall return from these companies far outpaces the rate of inflation.

Nick Murray, a well-known financial advisor, writes about the reality of this trend. Murray writes about the staggering difference between the increase in the dividend (profit distributions) of the S&P 500 (500 of the largest US companies) and the increase in inflation in the 50 years between 1972 and 2022. The dividend increased 21 times while inflation increased 7 times. In addition, The research indicates that dividend increases tend to outpace the rate of inflation. In addition, the pattern is that the increase in the stock market almost always has a positive correlation with earnings growth. (Murray).

Finally, a quick disclaimer. Many people spend a lot time trying to predict the short term direction of our economy and stock market. The truth is, nobody can promise you anything about what the economy or  the stock market may do in the short term. When you invest in the stock market, there are risks involved. That’s just the reality of it. But as we follow the trends of history, we continually see the increases in the value of these companies far outpace inflation and we see the market value of these companies following earnings.

So why not reframe our perspective? Rather than thinking we’re investing in an unpredictable stock market, let’s change our mindset and understand that we are investing in some of the greatest companies in the world. Many of these companies are making a positive difference through the products and services they provide, and when you step into long-term investment with them, you get to be a part of something greater than yourself!

SOURCES

Murray, Nick. Nick Murray Interactive, vol. 23, no. 7, July 2023, pp. 1–2.

My Top 20 Investing Principles

October 2, 2023

by Ron Bare

What could your future look like if you invested well? How could you bless your families, coworkers, or community? Over the years, I have gathered 20 principles that guide our investment strategy, and I’d love to share them with you! 

  1. God is the owner and I am the steward. What do you own that God hasn’t blessed you with? He owns everything we have, which should encourage us to steward and invest it wisely and generously.
  2. Learn the secret of being content. Contentment drives away the continual need for more. See Phil. 4:12, Heb. 13:5
  3. Passing on wisdom is better than passing on wealth. Wealth doesn’t last. Wisdom does. Wisdom gets passed on and on, yet wealth vanishes with one decision or circumstance.
  4. Live generously. God blesses you so you can bless others. Plus, do you know any unhappy generous people? No? Me neither! 
  5. Build margin into your time and money. Time margin allows you to serve, volunteer, and mentor. Financial margin allows you to invest, donate, and have enough when things go badly.
  6. Borrow cautiously and repay debts quickly. Repaying debts gives you financial freedom to invest, donate, or save for your kids and grandkids. 
  7. Save 10-15% of your income. Saving helps you prepare for unexpected opportunities or crises. This is a practical way to build financial margin into your life!
  8. Own companies (mutual funds, ETF’s, and individual securities) and real estate. Once you’re an owner, hold these investments long-term.
  9. If it seems too good to be true, it is! If you’re skeptical or suspicious, seek wisdom from trusted advisors!
  10. Don’t blindly follow the crowd. Trends are temporary and will fade. The opposite of the crowd is often best! 
  11. Don’t make financial decisions primarily to reduce taxes. Tax reduction is a great benefit. However, this shouldn’t be the driving force for financial decisions. 
  12. Hold unwavering faith in the future. This is not for the faint of heart! Don’t become pessimistic in investing, rather trust companies will prosper and trends will continue upward in the long term.
  13. Diversify, diversify, diversify! Ecclesiastes 11 encourages us to invest in many different ventures, as we can not predict the future nor what will succeed. 
  14. Invest within the context of your financial plan, goals, and values. Use your plan, goals, and values as a guide for where, when, and how much to invest.
  15. Be careful of the words “this time is different. ”The truth is, it’s probably not. Look for, study, and learn from patterns in the financial world!
  16. Build a trusted team of advisors. “Without counsel plans fail, but with many advisers they succeed,” says Proverbs 15:22. Who are your advisors? Where do you go for wisdom?
  17. Don’t waste time predicting what the markets will do in the short term.  No one knows what they will do in the short term! Not you, not the professionals, not internet opinion articles, no one! Don’t waste your time.
  18. The best time to start investing is today! Don’t wait for the perfect time.
  19. Be careful with gold (perhaps 3-5% of your portfolio). Usually gold is sold out of fear of potential catastrophes in the world. Personally, the gold I buy is jewelry for my wife so we can enjoy it while we hold it! 
  20. Never make an emotional financial decision. Emotions are good, but when it comes to finances, lean on wisdom, experiences, and your advisors. 

These principles can’t promise a life of perfection and wealth. But they can promise to be a good starting point when learning to invest well. If you’re interested in talking more about investing, give us a call!

Nothing New Under the Sun

April 5, 2023

by Ron Bare

Perhaps the most common mistake made when making investment decisions is making ANY investment decision outside the context of a written financial plan based on your goals and values. That is why Bare Wealth Advisors does not create investment portfolios for our clients without a plan.

Without a plan we are left to the news headlines and predictions from all the market “experts” – most of which are fear driven. Fear is a good salesperson, and financial journalism is guilty of “selling” the headline that will generate the most clicks. We believe wealth is ultimately a resource entrusted to us to maximize the impact and calling God has given us. We should never succumb to fear headlines and financial journalism’s goal of making short term investment decisions based on what the market may do over the next few months.

As Ecclesiastes tells us, “nothing is new under the sun.” Over the past year we have seen the following: war, inflation, rising interest rates, recession fears, supply chain constraints, and most recently the failure of Silicon Vally Bank (a tech focused bank which had heavy losses the past year). All this on top of coming out of a closed economy due to the Covid 19 pandemic, can be exhausting and emotional – however, none of these are “new under the sun!” We live in an uncertain world and one benefit of a financial plan is to help you plan for what we call the “certainty of uncertainty”.

Our advice is and always will be the same – think long term, diversify, minimize debt, live generously, live within your means, and create a tailored financial plan based on the individual values, purpose, and goals your family has established. However, in the meantime let me share a few thoughts regarding our current economic state.

There has been much discussion recently regarding the cause of the inflation we have been experiencing. Basic economics tell us that when you create too much of something the value of that something is reduced. The total M2 (money supply – or simply just think money in all bank accounts) increased by 40% during a two-year window of the pandemic.  (Over $6 Trillion!) For perspective, the normal increase in M2 is about 6% per year. It does not take a rocket scientist to figure out this may reduce the value of money (the definition of inflation). The good news (of course nobody is focusing on any good news) is that M2 has decreased over the past 12 months and many leading indicators are showing that inflation is subsiding. It will take some time, but inflation is heading in the right direction – lower!

Remember, even though some indicators show inflation is declining, it is always challenging to predict what will happen in the “short-term.” More importantly, short term is not where we or you should focus. We are long term planners focused on the impact your resources can help you make over the next 10, 20 or 30 years!

As I wrap up these thoughts, I would like to encourage us all to make sure we receive the proper “inputs.” Begin with the NEVER changing word of God (Bible), understand the principles of truth and ask for wisdom to apply them to your life. Then surround yourself with advisors that know and care about you, listen to you and share your values, and can help you discern how to apply wisdom to the vision and impact God is calling you and your family to make – in this short life we have been privileged to live. Thank you for allowing us at Bare Wealth Advisors to be one of your trusted advisors, we are honored!

Intentional Contentment

August 11, 2022

by Tina Petersheim

Cancelled plans. High school proms, college graduations, weddings, baby showers, birthday parties, anniversary celebrations, sporting events, vacations. The pandemic changed a lot of plans over the last couple of years as important milestones looked different. It would be easy to complain about all that was missed but what if we changed our focus and perspective for this “new normal”: A chance to be more intentional with the people in our lives, longer conversations with the people we love, meaningful encounters with those around us and time to disconnect from the chaos around us.

I met, dated, and married my husband in the middle of the pandemic. Like almost every girl, I imagined the princess dress, the extravagant cake, the lavish venue full of guests, the sendoff in a horse and carriage…. my very own fairytale wedding. Instead, I said “yes to the dress” online; our wedding list was shortened, our wedding cake was a few small desserts, the ballroom became the church lobby, and the grandeur exit was sitting around the table enjoying conversation with our kids.

As we focus on a year of intentionality at Bare, intentional contentment means choosing to be satisfied in all situations, experiencing joy and seeing God’s goodness, even when things don’t go as planned and life throws an unexpected curveball. After years of praying and experiencing loss, God had answered our prayers and my husband and I chose to find joy and contentment in the simpler things. We became intentional with the people we invited to our wedding as the room was filled with those who had weathered our journeys with us and with the ceremony as we shared how God merged the paths of two people who had lived through difficult circumstances.

The Apostle Paul learned the secret of being content and reminds us in Philippians 4:10b-11… “for I have learned how to be content with whatever I have. I know how to live on almost nothing or with everything. I have learned the secret of living in every situation, whether it is with a full stomach or empty, with plenty or little.”

How are you being intentional with being content in every circumstance? Are you choosing to be happy with the little things in life and live in the moment? Are you fully trusting in the One who has promised to meet every need? Maybe, like me, some things in your life don’t look quite like you thought they might. Maybe some of your goals have shifted or changed. At Bare, we help you through transitions to ensure your values, goals and purpose are directing your financial plan.  Having a good financial plan that you feel confident about, along with regular “check-ins”, can help with living out the verses in Philippians and being content in every circumstance.

Ultimately, choose to recognize God’s blessings and enjoy the simpler things: long walks in the park, snuggles with a new baby, a cup of coffee on a rainy morning, relaxing on a sunny day. Know that God is in the details, canceled plans, and missed activities. After all, I still found my Prince Charming and am choosing to be intentional in living happily ever after.

US Economy

Is This Time Different?

June 17, 2022

The Equity (Stock) market by most gauges is now down well over 20% and has entered a bear market. We understand that times like this can be difficult as an investor, and we are here to help you make wise financial and investment decisions. Because we care about you and your financial plan, we want to provide you with some overall thoughts and perspectives on market volatility.

What is the cause of this bear market?

Inflation has surged, the federal reserve is raising interest rates (and reversing what is called QE or Quantitative Easing) and these actions are increasing the odds of a recession. Oil prices are at record highs (we all see this at the gas pump daily), and food prices are skyrocketing – not to mention the war in Ukraine. All these headlines and events may lead you to believe that “this time is different.”

Therein lies perhaps the most dangerous phrase of becoming a long-term successful investor. “This time is different.” If we believe this, then the next thought is, “I must pull my money out of the markets, or at least start preserving cash and stop investing my monthly amount into something that loses money each month.”

This time is NOT different. Recessions occur once every five years on average. While inflation is a problem right now, there have been times where it was much higher. Also, although the federal reserve is raising interest rates, they are still relatively low. Oil supply is still limited due to pandemic shutdowns (and other factors for another time) and demand has surged due to a full reopening of the economy. All of this will work its way out. In our opinion, more oil supply will come, demand will soften, inflation will cool, and the market will realize that the world is not ending. In time, this bear market will end.

This time is not different, if just FEELS different. It always does. In 2008 when banks were failing, housing was busting, and the market dropped over 50% (remember how that felt? I do!) – it certainly felt very different. However, those who stayed the course, added to their portfolios, and had faith in the future prevailed, and this time should be no different. During uncertain times it is good to reflect on time tested principles:

  1. Give more money away this year to a cause you care about (giving is a step of faith in a God who provides)
  2. Do not make financial decisions out of fear or worry.
  3. Think long term – we make better decisions when we think long term
  4. Add to your investment portfolio, assuming you have a few years until you need the money a drop in the market may be a good opportunity to invest with a long-term perspective.
  5. As we have talked about in the past, make decisions based on your holistic financial plan that is based on your goals, values, and timeframes – we are here to help review any of these details with you if that would be helpful.


Thank you for your continued partnership, and I wish to close with words from Paul in Philippians 4:6-7; “Do not be anxious about anything, but in every situation, by prayer and petition, with thanksgiving, present your requests to God. And the Peace of God, which transcends all understanding, will guard your heart and minds in Christ Jesus.”

Intentional Financial Planning

April 11, 2022

by Adam Black

When you hear the term “financial plan”, what is the first thing that comes to mind? Maybe it’s planning for retirement, finding a way to get your kids through college, or buying your first home. Personally, the first thing that I think of is “process”. When I think of the goals I have in my life, I know that most of them will not be accomplished overnight. To determine the best path forward, I had to sit down to evaluate what I have, what I’ve done so far, but most importantly, where my heart is. Taking the time to do that was an awesome process of self-discovery – but that was just the beginning.

Once I knew what I wanted to accomplish, I had to take action-steps to get there. The most important financial aspect of my plan was to live within my means. Without this discipline, most (if not all) plans would fail. I had to discern where money was flowing – how much I was spending money on takeout, how much I was giving, how much I was spending on gas, and so on. This process wasn’t fun, but from it I was able to figure out how I could achieve my goals and set guardrails on my financial journey.

No matter what stage of life you’re in, it’s important to intentionally take the time to go through this process. As you dream of your future, think about how it is impacted by your finances and consider the steps you need to take to make that dream happen.

You may not have the know-how on earning the most money in your investment account, how to save for your goals while being tax-efficient, or how to effectively give your money generously to make your financial plan flourish, but that’s okay. We would love to help you discern what those goals are and help you get there, all while building a deep relationship of trust and intentionality. For those we already serve – we love serving you! For those who we do not have the honor to work with yet, understand it’s a process, but a fulfilling one when done with intentionality and purpose.

I’ll leave you with my favorite catchphrase that I believe summarizes a key point to an intentionally built financial plan: “Trust the Process”.

Thoughts on the crisis in Ukraine

March 9, 2022

by Ron Bare

Like you, all of us at Bare Wealth Advisors are concerned about the recent world events, most significantly the Russian invasion into Ukraine. In the days ahead, please contact your team here at Bare Wealth Advisors if you have specific questions on how this affects your personal financial plan. In the meantime, I feel compelled to share some overall thoughts and words of encouragement.

  1. There will be plenty of blame to go around for this event in the days and months ahead – for now, I suggest praying for peace and protection for the nation of Ukraine.
  2. We are seeing extreme price movement in food and energy, which is likely to continue. Keep in mind, the US was energy independent within the last couple years. I believe our country has the capability to produce the energy we will need in the long-term. Since Ukraine is a large producer of wheat, we will continue to see increases in our food costs until this uncertainty is behind us.
  3. In my opinion, Russia desires control and money from both energy and agriculture (mostly energy) and that is what this war is about. In my opinion, Putin does not want to start World War 3.
  4. Financial Steps to take:
    1. Live within your means – spend less than you earn
    2. Give generously to those in need – here is a link to 20 organizations that are helping people in Ukraine: https://www.ncfgiving.com/stories/help-for-ukraine-10-charities-on-the-frontlines/
    3. Minimize debt
    4. Think long term – this too will pass. Continue to “work” the financial plan we have put in place. If you are adding to investment accounts, please continue to invest and possibly increase the amount of money you are investing. You are investing into some great companies that over the long term may reward you with good profits. If you have excess cash (margin) in your financial plan this may be a great time to consider buying some of these companies shares.
    5. Do not fear: Read Matthew 6: 19-34 (read verses 25-27 below)
      1. V25: That is why I tell you not to worry about everyday life – whether you have enough food or drink, or enough clothes to wear. Isn’t your life more than food, and your body more than clothing? V26: Look at the birds. They don’t plant or harvest or store food in barns, for your heavenly father feeds them. And aren’t you far more valuable to him than they are? V27: Can all your worries add a single moment to your life?”

Thank you for trusting in our team. We are here to serve you and we would be happy to help bring clarity to any questions you have concerning your personal financial plan.

Sincerely,

Ron Bare and the entire Bare Wealth Team

Market Thoughts 101

February 7, 2022

By Ryan Kurtz

It is January 26th, 2022, as I sit down to write my thoughts on the current state of the stock market.  After 3 great years in the market (measured by the S&P 500 Index) in which a $100,000 investment would have grown to almost $180,000, the market is down 8.5% since January 1st. Does that mean the stock market is no longer a good place to invest?  Let’s take a deeper look.

What creates volatility in the stock market?

The “market” is just an auction that happens every business day in which investors (owners) in companies buy and sell their ownership shares. If there are more buyers bidding, then there are sellers selling of a company, the shares go up in price. If there are more sellers than buyers, the share price goes down. There are many things that would make people want to buy or sell – a CEO retiring, a new product that investors think is a good idea, profits in a quarter are better than expected, and on and on.

Are we going to see a decline or drop in the market? The answer is yes. When, and how much, I have no idea (and no one else does either, it is just speculation.)  Just because the market drops does not mean it is a bad place to invest. It is the nature of this type of investment that is priced by a daily auction. No one knows the future and even when very intelligent people predict what “may” happen to the market, they are often wrong.

Is the stock market still a good place to invest? The answer is – it depends. It depends on what you plan to use the money you invest into the market for. It is typically a good place to invest for someone that has a long-term plan to own the investment. If you need the money you’re investing in 1 – 3 years, it may not be a good place to invest.  For investors that have been able to hold investments in the stock market for 10 years or more they would have had an investment that would have provided a good average annual return during most decades. If you only would be able to hold the investment for a year or two, you would have had a 25% – 30% chance of losing money*.

So, what are our current thoughts on the Market?

  • The market is a good place to invest for a long-term investor
  • The market could be too much risk to take if you are a short-term investor
  • Based on our experience and working with many families; the stock market is one of the 3 best investments one should own to create wealth. The other two are real estate and private business.

In closing, our encouragement to our clients is to keep a long-term focus regarding your investment portfolio and understand how these investments fit into your overall financial plan. If you have a good understanding of the investments purpose, timeframe, and needs for you and your family you are much more likely to be a successful long-term investor!

*American Funds, The ICA Guide 2021 edition: Class A shares; MFS Investment Management, Principles of Long Term Investing Resilience

Mid Year Economic Perspective

August 26, 2021

by Ron Bare

It’s hard to believe we are nearing the end of August 2021. As you all are very aware, the past year and a half have presented never before seen challenges and uncertainty. We recognize that often fear and anxiety are the results of this uncertainty. We thought it would be appropriate as we head into the fall to share some important, time tested principles, as well as a few key thoughts on our economy.

GENERAL PRINCIPLES

  • As always, we recommend the best course of action is to be long-term, goal-focused, planning-driven investors. We’ve found that the best course for us is to formulate a financial plan—and to build portfolios—based not on a view of the economy or the markets, but on our most important lifetime financial goals.
  • We believe in following a plan with discipline — as opposed to reacting to current events. This offers us the best chance for long-term investment success. Simply stated: unless our goals change, we see little reason to alter our financial plan. And if our portfolio is well-suited to that plan, we don’t often make significant changes to that, either.
  • We do not believe the economy can be consistently forecast, nor the markets consistently timed. We are therefore convinced that the most reliable way to capture the long-term return of equities is to ride out their frequent but ultimately temporary declines.

PERSPECTIVE OF CURRENT SITUATION

  • The economy continues to struggle with supply chain imbalances, as well as with a historic mismatch between the number of job openings available and continued high (though rapidly declining) unemployment. Financial journalists continue to speculate on when these blockages will clear, but for long-term investors like us, the key is our belief that they will, in the fullness of time.
  • There is also the issue of the Biden administration’s drastic tax proposals with respect to capital gains and estates. The best that can be said on this subject is that, as the first half of the year ended, the momentum behind these initiatives seemed to be declining. But the political climate remains as detrimental to capital (and capitalists) as it’s been in quite a while.
  • Nonetheless, for investors like us, the most important economic report of this whole six-month period is the fact that household net worth in this country spiked 3.8% in the first quarter of 2021—to $136.9 trillion—propelled by broad gains in the equity market and in home prices. Even more important, perhaps, is the fact that the ratio of household debt to assets continued to fall, and is now back down to about where it was 50 years ago.
  • The consumer powers this economy, and the consumer has rarely carried more manageable debt levels relative to disposable income—and has simply never been holding more cash—than he/she does today. In June, the National Retail Foundation raised its outlook yet again; it now expects retail sales to grow 10.5% to 13.5% (that is, $4.44 trillion to $4.56 trillion) year over year. As a result, the retail giant Target raised its dividend by a whopping 32%.

As always, if your situation has changed, or if you would like to speak to one of our advisors, please give us a call. We thank you for your continued trust and confidence in the team at Bare Wealth Advisors and we look forward to speaking with you soon!

  • 1
  • 2
  • 3
  • 1-10 of 23 results