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Mike Clark Named to “People to Watch” List by The Get to Know M.E. Campaign

O’Fallon, IL— December 13, 2018— Recently, Mike Clark, a Senior Wealth Advisor at Visionary Wealth Advisors, was 1 of 12 metro east professionals named to the “Get to Know M.E.- People to Watch” list. Participants were chosen as “young, bright entrepreneurs, innovators and game changers in their industries who are transforming business as usual and making their mark on the metro-east and St. Louis region at large.” Each recipient was nominated by members in the community.

“Mike is definitely one of those “people to watch.” He takes great pride in serving his clients and community every single day.  It is fun to get to watch as Mike makes decisions for his clients and for his community with one thing is in mind… Do the right thing! We know we are lucky to have Mike at Visionary,” said Visionary CEO, Brett Gilliland.

President Tim Hammett added, “Mike continues to experience significant growth year after year! He is one of the hardest working professionals I know. What truly sets Mike apart from the rest are the values driven relationships he builds with his clients.”

Visionary Wealth Advisors is an independent Registered Investment Advisor, founded in March 2014 by Brett Gilliland and Tim Hammett. Visionary Wealth Advisors provides a visionary approach to all aspects of financial planning and wealth management. For more information, visit VisionaryWealthAdvisors.com.

Disclosure:  The Get to Know M.E. campaign was launched to help everyone in the metro-east get to know their community better, by embracing the people who live and work in the region.  To support the campaign, various businesses teamed together to organize and fund a comprehensive, positive-image marketing campaign for the metro-east, all aimed at celebrating the people who call the area “home.”  As such, nominations for the “Get to Know M.E.- People to Watch” list was limited to business professionals living or working in the Illinois metro-east region.  Those selected to the list were nominated by community members.  Nomination and inclusion on the “People to Watch” list does not imply the selectee has a higher degree of sophistication, expertise or success that others in the same profession.  Selection to the list was not based upon the abilities, skills, or performance of the financial advisor.  Investors should be cautious in evaluating a financial professional based on any professional awards, rankings or designations.

Fourth Quarter Market Review

John Fischer, CFA®, CFP® | Chief Investment Officer

January 16, 2019

Life is full of choices. Every single day, we have to make countless decisions between various options.

Some of these decisions might be small ones, like whether or not we stay at work late today or tomorrow, or what we’ll choose to do for our weekend plans. Other choices require much bigger and more consequential decisions: should we take that job in a different city and uproot our entire life?

All of these decisions, both big and small, require us to deal with trade-offs. By the nature of choosing one thing over the other, we must lose or forego value in one option in exchange for gaining the value in the option we choose.

The Trade-offs You Face as an Investor

We make trade-offs when we invest, too.

You could opt to invest your savings in cash or cash-like instruments, for example, which offer very high levels of safety but come with the trade-off of relatively low returns. Or you might invest your savings in risky assets like stocks which historically have averaged higher rates of return — but come with the trade-off of less safety and a higher risk of loss.

The fact that the S&P 500 posted a positive return in 9 consecutive years since 2009, however, could have caused investors to forget about the trade-offs typically made when investing in the stock market.

Not only were stocks positive for 9 consecutive years prior to 2018, but during that timeframe there were only 4 corrections (defined as market declines of 10% or greater). Investors experienced the best of both worlds: superior returns to cash and very little market volatility.

This is why 2018 felt so painful. It was the first time in 10 years that the S&P 500 was negative, and we experienced 2 market corrections in short order after experiencing only 4 in the previous 9 years.

Let’s take a look at market topics that reminded investors of the trade-offs of owning stocks and what steps you can take to make sure your financial plan is still on track.

The Trade Tift Between U.S. & China

The 4^th quarter finally brought hope for a solution to the trade dispute between the U.S. and China. Both countries agreed to a ceasefire on raising tariffs and to open a 90 day window to negotiate a resolution.

Investors from around the globe are watching closely as the dispute has pressured global growth due to its effect on many of the countries that trade with both the U.S. and China. While recent headlines have given investors hope of continued progress, there are still many issues that need to be resolved.

That will likely take some time. Investors should expect ongoing market volatility as the market responds to the natural ebb and flow of ongoing negotiations between the U.S. and China.

The Fed & Interest Rates

Prior to last year, the Fed raised their short-term interest rate 5 times since 2009 as the economy transitioned from being flat on its back to back on its feet. Even as the U.S. economy continues to grow, the Fed garnered plenty of attention as they raised rates four times in 2018 alone in hopes of keeping inflation in check and preventing the economy from overheating.

Much debate has surrounded the Fed rate hikes over the past year as investors express concern that the Fed runs the risk of raising rates too quickly and cutting off economic growth.

We believe some perspective is warranted. Despite 9 rate increases since this economic expansion began, the Fed funds rate is still only at 2.50%. Additionally, the Fed is likely to slow the pace of rate hikes in 2019 given current market conditions and moderating inflation.

When looking back at the start of the last 3 recessions in the U.S. dating back to 1990, the average fed funds rate was 6%.¹ We expect the Fed funds rate to peak at a level lower than 6% given slower economic growth has been a staple of this market cycle. But we believe the Fed still has a fair amount of room to raise rates before economic growth is choked off, considering the current 2.50% rate.

The Rise of the Machines

There’s no doubt the trade dispute with China, ongoing Brexit negotiations, and questions surrounding the speed of Fed rate hikes left investors feeling a higher degree of uncertainty to finish the year. These uncertainties contributed to the S&P posting its worst December since the Great Depression. While these concerns drove some investors to sell and take profits, the selling pressure was likely compounded by a poor mix of increased computer-based trading and low liquidity around the holidays.

Computer-based, or algorithmic, trading has increased considerably over the past decade. While experts disagree on the exact percentage of the daily market traded by computers, most do agree it’s greater than 50%.

Computer-based trading isn’t inherently bad for markets, but it operates on a rules-based system. That means it can create greater momentum in the market when stocks are rising or falling, leading to increased volatility in the form of higher highs and lower lows.

When you combine increased computer-based trading with a market with less liquidity (in other words, fewer buyers) around the holidays and more selling activity, it’s a recipe for bigger market declines.

All Is Not Doom and Gloom

While the end of 2018 was painful for many of us, it’s important for long-term investors to take a step back and look at the big picture. Economic fundamentals softened a bit in the fourth quarter but remain solid as wage growth, the unemployment rate, and holiday retail sales all point to a healthy consumer. Consumer spending, which represents roughly two-thirds of U.S. GDP, will also continue to benefit from the recent tax cuts and a decline in gas prices.

While corporate earnings growth likely peaked in 2018 thanks to tax reform, we still expect to see positive earnings growth in 2019. Historically, when profits grow the stock market grows too. In addition, the combination of increased corporate earnings and declines in stock prices in 2018 left stock market valuations looking more attractive for long-term investors looking to put money to work.

What Can We Expect in 2019?

2018 reminded investors that owning stocks in hopes of earning a superior return to cash comes with a trade-off: you must be prepared to accept greater market fluctuation and risk of loss.

Given losses last year were relatively contained by historical standards, it offers long-term investors a great opportunity to review their financial plan with their financial advisor to make sure they remain on track to achieve their financial goals.

We would also advise investors to review their diversification of stocks and bonds in their portfolio as it relates to their comfort with risk to make sure they are appropriately invested.

We can’t predict future market uncertainty, but we can prepare for it by making sure we’re appropriately invested based on our risk tolerance and our financial goals. That’s a trade-off that can lead long-term investors to success.

Source: ¹ https://fred.stlouisfed.org/series/JHDUSRGDPBR

Important Disclosures:  Visionary Wealth Advisors (“VWA” or the “Firm”) is an SEC registered investment adviser. For information about VWA’s registration status and business operations, please consult the Firm’s Form ADV disclosure documents, the most recent version is available on the SEC’s IAPD website at www.adviserinfo.sec.gov.  

This Market Review (“Review”) is provided for informational purposes only.  The Review should not be construed as personalized investment, tax or legal advice, including the recommendation to engage in a particular investment strategy.  This Review, by itself, does not contain enough information to support an investment decision.  All information in this Review is considered accurate at the time of production, but no warranty of accuracy is given. 

Furthermore, investors should not assume that future performance of any specific index, security, investment product or strategy referenced in the Review, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s).  Past performances referenced in the Review may not be indicative of future results and may have been impacted by events and economic conditions that will not occur or prevail in the future.  Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices referenced in the Review are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products.  Investing involves the risk of loss and investors should be prepared to bear potential losses, including the full amount invested.

Collop and Gilliland Honored by St. Louis Small Business Monthly

St. Louis, MO – February 20, 2019 – Sr. Wealth Management Advisor, Rich Collop, CFP®, CLU®, ChFC®, and Founder and CEO of Visionary Wealth Advisors, Brett Gilliland, were named to St. Louis Small Business Monthly’s “Best Wealth Manager” list in the February 2019 issue. The Visionary Advisors were two of the twenty-seven honorees.

The complete list can be found at http://www.pageturnpro.com/St-Louis-Small-Business-Monthly/88680-STL-SBM-February-2019/JMPubTron.html#page/16, or on newsstands where the publication is sold.

Congratulations to Rich Collop and Brett Gilliland!

Disclosure:  The 2019 Best Wealth Manager Award, administered by St. Louis Small Business Monthly, is based on nominations from Small Business Monthly readers.  Award winners are selected by St. Louis Small Business Monthly’s editorial board based on the number of votes received.  Awardees do not pay a fee to be considered or placed on the final list of 2019 Best Wealth Managers.  The Award does not evaluate quality of services provided to clients.  Once awarded, wealth managers may purchase additional profile ad space or promotional products. The Best Wealth Manager award is not indicative of the wealth manager’s future performance.  Wealth managers may or may not use discretion in their practice and therefore may not manage their client’s assets.  Working with a St. Louis Small Business Monthly Best Wealth Manager awardee or any wealth manager is no guarantee as to future investment success, nor is there any guarantee that the selected wealth managers will be awarded this accomplishment in the future.  In 2019, 165 St. Louis area wealth managers were considered for the award and 27 were selected (16 percent).

Visionary Wealth Advisors Adds Four Industry Veterans

March 22, 2019 — Visionary Wealth Advisors  added four industry veterans in the first quarter of 2019, including Steve Elefson, formerly of Cary Street Partners Jackson, MO, Bill and Will Lauber, formerly of Sterling Capital in St. Louis, MO, and Geoff Reed, formerly of Waddell and Reed in St. Louis, MO.

Steve Elefson joins the firm as a Wealth Management Advisor out of Jackson, Missouri. Steve brings over 30 years of experience in the industry to Visionary and provides comprehensive wealth management services for individuals, families, organizations, and charities. “Being a Visionary means hard work combined with applying sound investment practices coordinated by a financial plan that allows our clients to pursue their goals and dreams,” says Elefson. Adding, “It is extremely rewarding to see what families can achieve when their wealth is applied to their life mission, values, and goals.”

“We are pleased to announce the addition of The Elefson Group, led by Steve Elefson, to Visionary Wealth Advisors,” says Tim Hammett, President and Co-Founder of Visionary Wealth Advisors. “Expanding our presence into Southeast Missouri will bring significant opportunities. Steve has built trusted relationships with his clients.”

Visionary has also added an additional 50 years of combined investment industry experience with the addition of Sterling Capital Group to the firm. Sterling Capital consists of Bill, Jan and their son, Will Lauber.

Bill and Will are both Sr. Wealth Management Advisors, while Jan is the Director of Client Services for Sterling Capital. Bill Lauber began his professional career in 1970 as an Account Executive with Merrill Lynch. He founded Sterling Capital Management in 1988, with Jan joining to work as their office manager, operations manager and client liaison.

Will Lauber has worked in the investment industry since 2004. He helps clients achieve their life financial goals through managing their portfolios. He especially enjoys selecting the individual investments which help clients meet their long-term goals.

“We are excited to announce the addition of Bill, Jan, and Will Lauber of Sterling Capital Management to Visionary. For over 40 years, Sterling has established an impeccable reputation of serving their clients,” explains Tim Hammett, President Co-Founder.

Geoff Reed has been in the financial services industry since 2003. Geoff has prided himself on providing comprehensive wealth management solutions for families and businesses looking to grow and protect their financial resources.  He works diligently to assure the financial strategy in place meets the objectives for each individual client. Geoff currently resides in St. Louis and enjoys giving back to his community.  “We are extremely excited to have Geoff join our Visionary team,” says President, Tim Hammett. Adding, “He is an experienced professional who has developed strong, values-based relationships with his clients.”

“We are excited about the Lauber, Elefson, and Reed teams joining the Visionary family,” said CEO and Co-Founder, Brett Gilliland. “Adding experience like this to our firm will  help support the work we do in the communities we serve. Collectively, they will assist Visionary in achieving its mission of ‘helping people achieve a future greater than their past.’”

Visionary Wealth Advisors is an independent Registered Investment Advisor, founded in March 2014 by Brett Gilliland and Tim Hammett. Visionary Wealth Advisors provides comprehensive financial planning and wealth management services, including retirement, family officeVisionary Wealth Advisors’ has offices in Chesterfield, Jackson and St. Louis, MO, Edwardsville and O’Fallon, IL, Palm Beach Gardens, Florida, and Buena Vista, Colorado.

[1] Family office services are provided through Visionary’s partnership with Greenway Family Office.

Visionary Wealth Advisors Celebrates Its 5^th Anniversary

Co-Founders of Visionary Wealth Advisors, Brett Gilliland (left) and Tim Hammett (right)

O’Fallon, IL— March 25, 2019 — Visionary Wealth Advisors celebrated its 5^th anniversary on Sunday, March 24^th. Founded in 2014 by Brett Gilliland and Tim Hammett, CFP®, AEP , Visionary Wealth Advisors provides best-in-class, independent wealth management services.

Since its inception in 2014, Visionary has grown to over $1 Billion of Assets Under Management, serves over 5000 clients, and houses 7 office locations in St, Louis, Jackson, and Chesterfield, Missouri; Edwardsville and O’Fallon, Illinois; Palm Beach Gardens, Florida; and Buena Vista, Colorado. Visionary has 28 advisors, 10 administrative staff, and an executive team with over 100 combined years of experience in the financial industry.

“It’s been an amazing 5 years at Visionary. Knowing our clients are being served in a fiduciary manner with no proprietary products to sell has been one of the leading factors to our growth,” states Visionary co-founder and CEO, Brett Gilliland. He adds, “it’s also been great seeing the impact in the communities that are important to everyone in the firm. Whether it be from financial planning, charitable work or mission trips, our team is truly living our mission, which is to engage people to help them achieve a future greater than their past through a values-based relationship. As a leader of this organization, you can’t ask for much more!”

Co-founder and President, Tim Hammett, reflects on the past five years, and looks forward to the future with excitement. “Everyone at Visionary is overwhelmed with gratitude for the success we have had over the past five years. The ongoing support we receive from our families, clients, and team members is immeasurable!” Adds Hammett, “We couldn’t be more excited and optimistic about the next five years.”

Visionary Wealth Advisors Celebrates Its 5^th Anniversary

Co-Founders of Visionary Wealth Advisors, Brett Gilliland (left) and Tim Hammett (right)

O’Fallon, IL— March 25, 2019 — Visionary Wealth Advisors celebrated its 5^th anniversary on Sunday, March 24^th. Founded in 2014 by Brett Gilliland and Tim Hammett, CFP®, AEP , Visionary Wealth Advisors provides best-in-class, independent wealth management services.

Since its inception in 2014, Visionary has grown to over $1 Billion of Assets Under Management, serves over 5000 clients, and houses 7 office locations in St, Louis, Jackson, and Chesterfield, Missouri; Edwardsville and O’Fallon, Illinois; Palm Beach Gardens, Florida; and Buena Vista, Colorado. Visionary has 28 advisors, 10 administrative staff, and an executive team with over 100 combined years of experience in the financial industry.

“It’s been an amazing 5 years at Visionary. Knowing our clients are being served in a fiduciary manner with no proprietary products to sell has been one of the leading factors to our growth,” states Visionary co-founder and CEO, Brett Gilliland. He adds, “it’s also been great seeing the impact in the communities that are important to everyone in the firm. Whether it be from financial planning, charitable work or mission trips, our team is truly living our mission, which is to engage people to help them achieve a future greater than their past through a values-based relationship. As a leader of this organization, you can’t ask for much more!”

Co-founder and President, Tim Hammett, reflects on the past five years, and looks forward to the future with excitement. “Everyone at Visionary is overwhelmed with gratitude for the success we have had over the past five years. The ongoing support we receive from our families, clients, and team members is immeasurable!” Adds Hammett, “We couldn’t be more excited and optimistic about the next five years.”

First Quarter Market Review

John Fischer, CFA®, CFP® | Chief Investment Officer

April 15, 2019

The world of investing is a complex one to say the least. As an investor, you’re constantly challenged to make sense of global economies, corporate financial statements, and geopolitics (among other factors) while trying to form an educated opinion about where to invest your money.

Based on this reality, it seems like superior intelligence would help you on your way to investment success. And yet Warren Buffett, one of the most legendary and successful investors of our time, once said, “The most important quality for an investor is temperament, not intellect.”

In the intricate, complex world of investing, how is it possible that anything other than intellect could be the most important quality of a good investor?

As it turns out, looking at the past 12 months might give us a good idea of what Buffett meant.

When “Average” Feels Like Anything But

Through the end of the first quarter, the S&P 500 was up 7% over the past year. While slightly lower than the index’s long-term average, that performance is in line with what an investor might expect in any given year. But how we got this result felt anything but normal.

Combining the 2^nd and 3^rd quarter of 2018, the S&P 500 was up more than 10%. The index produced a 6-month return that exceeded historical 1-year average returns. The market then promptly took a nosedive in the 4^th quarter, declining almost 20% at its low point before lifting slightly to finish the quarter down 14%.¹

This was the S&P’s largest intra-year decline since 2009.² It spurred many investors to stick their heads out their windows to check the sky to see if it was falling. But that was 2018; this is 2019 — and the market came storming back to finish the 1st quarter of the new year up 13%, the best quarterly performance in nearly a decade.

Put all that volatility and tumult together and what do you have? Intellectually, it resulted in a very average 12 months as measured by the 1-year return. Despite that, most investors wouldn’t use the word “average” to describe their feelings about the past year.

It Just Won’t Go Away: US & China

The ongoing trade dispute between the U.S. & China contributed to the rough patch to close out 2018 as well as the market bounce in the 1st quarter. As previously discussed in past commentaries, the ongoing conflict has put pressure on the world’s two largest economies and been a drag on global growth due to the uncertainty it has created.

The biggest change in this situation since the end of the 4th quarter has been the market’s perception of the proximity of a resolution, shifting from skeptical to optimistic. However, it would be premature to suggest the worst is over despite promising news headlines. Investors should brace for continued market fluctuations until the US and China officially come to an agreement.

A Flip-Flopping Fed Created Unease (Even As It Contributed to a Market Upswing) 

The Fed’s interest rate policy has come under increased scrutiny over the past year. In 2018, the Fed raised their short-term rate four times as the unemployment rate fell, wage growth increased, and overall economic conditions improved.

On the heels of a nearly 20% drawdown in the S&P 500 in the 4th quarter, lower economic growth projections, and declining consumer confidence, the Fed recently announced they would be patient with future rate hikes.

The change in Fed policy has left the market expecting no further rate hikes for 2019. The expectation of lower short-term rates for longer, which incentivizes consumers to borrow and spend, was another catalyst for the market bounce in the 1^st quarter.

Is an Inverted Yield Curve the Death of Economic Expansion?

As the current market expansion turns 10 years old, investors are starting to ask the question, “When will the music stop?” Some have pointed to the risk of a yield curve inversion, which occurred in March.

A yield curve inversion occurs when short-term interest rates are higher than long-term rates. Investors view this as a bearish sign for the economy given its reasonable (though not perfect) accuracy in the past in predicting economic downturns.

We caution investors from jumping to broad conclusions based on one economic data point. A preferred tool for many economists for gauging possible downturns is the Conference Board Leading Economic Index.

The index includes 10 economic indicators (not just one) that evaluate the health of the economy. While the index declined in recent months, its current level does not indicate an imminent recession — especially when you consider we’re seeing a low unemployment rate, solid wage growth, low inflation, and positive corporate earnings growth, too.

Regardless of what economic tool one chooses, recessions are incredibly difficult to predict. Even after past yield curve inversions, the economy and stock market performed well for some time. We would strongly caution long-term investors against trying to time the next market downturn as doing so is likely to cause more harm than good to one’s financial plan.

 Temperament Over Intellect

If you had done your best Rip Van Winkle impersonation for the past year, you’d have woken to find the S&P 500 to be up just below its annual average, which is barely news. If you had only taken a 6-month cat-nap, you’d see the market basically unchanged.

What you would have missed, however, were two of the most volatile quarters in a decade that saw a double-digit decline followed by a double-digit rally.

And if you had stayed awake over the past 6 months (as most of us presumably have), watching your portfolio would have felt like riding a roller coaster complete with big plunges and huge climbs. That feeling can be difficult to stomach, often causing investors to hop off the ride at the bottom and get back on at the next peak.

This is what Buffett meant in suggesting that temperament matters more than intellect. Most of us know, intellectually, that investors can combat that stomach-churning feeling by owning the right mix of stocks and bonds relevant to one’s risk tolerance and time horizon. Yet most people allow their emotions to drive their investment decisions especially during rocky times like the past 6 months, leading them to buy when they feel good and sell when they feel bad.

The success of the long-term investor is predicated on one’s ability to display a disposition that doesn’t get too low at market bottoms nor too high at market peaks. By focusing on their tolerance for risk and time horizon of their financial goals, investors can avoid letting short-term market gyrations alter their long-term financial goals. It’s this type of investor temperament that will succeed over intellect each and every time.

Source: ^1,2 Morningstar

Important Disclosures:  Visionary Wealth Advisors (“VWA” or the “Firm”) is an SEC registered investment adviser. For information about VWA’s registration status and business operations, please consult the Firm’s Form ADV disclosure documents, the most recent version is available on the SEC’s IAPD website at www.adviserinfo.sec.gov.  

This Market Review (“Review”) is provided for informational purposes only.  The Review should not be construed as personalized investment, tax or legal advice, including the recommendation to engage in a particular investment strategy.  This Review, by itself, does not contain enough information to support an investment decision.  All information in this Review is considered accurate at the time of production, but no warranty of accuracy is given. 

Furthermore, investors should not assume that future performance of any specific index, security, investment product or strategy referenced in the Review, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s).  Past performances referenced in the Review may not be indicative of future results and may have been impacted by events and economic conditions that will not occur or prevail in the future.  Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices referenced in the Review are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products.  Investing involves the risk of loss and investors should be prepared to bear potential losses, including the full amount invested.

The Next Recession – To Swerve or Not to Swerve

John Fischer, CFA®, CFP® | Chief Investment Officer

June 5, 2019

The current economic expansion has lasted almost 10 years now, soon to be the longest on record. Some investors see that looming 10-year anniversary, coupled with the recent market volatility, as a reason to worry about when the next recession will occur.

We know that nothing lasts forever – especially not bull markets. The market moves in cycles and we should expect a recession to follow this expansion. The only thing we don’t know is when.

What should investors do to prepare for this inevitability? Consider this scenario to find the answer: You’re driving down the road when a deer darts in front of your car. Do you swerve to avoid the deer or hold the wheel steady?

If you swerve out of your lane (and into a ditch, tree, or oncoming traffic) to avoid the deer, you expose yourself to greater risk of injury than staying in your lane and possibly striking the deer. Given that the deer is likely running, there’s also a reasonable chance by staying in your lane it will clear your lane and you can both pass unharmed.

You should hold the wheel steady and avoid swerving. But even if you know that’s the objectively best thing to do, your impulse and emotion may override that knowledge in the moment. Most drivers reflexively jerk the wheel anyway.

The Unpredictable Deer in Your Lane as an Investor: The Next Recession

 Investors display similar impulses when experiencing market fluctuations or nerves about the next recession. Instinctually, investors want to swerve, altering portfolios to be more conservative or increasing cash allocations in hopes of missing the downturn.

This presents the same problem as the swerving driver does: investors trying to avoid the next market downturn expose their portfolios and long-term financial goals to more risk than they would if they stayed appropriately invested.

And don’t forget the other reason for not swerving around a fast-moving animal: there’s a chance there simply won’t be a collision.

How many times have experts predicted a recession that never came? There have been 10 recessions in the U.S. since 1950. Despite an abundance of economic data to leverage, economists and market experts have never successfully predicted future recessions with a high degree of accuracy.

Don’t swerve to avoid something you may never hit anyway – and don’t tinker with your portfolio based on predictions of an event that may not happen when you think it will.

The Cost of Getting Things Wrong (and Why You’re Unlikely to Get It Right)

If you try to sidestep the next market downturn, you face the daunting task of choosing precisely when to swerve out of your current strategy but also when to swerve back.

Timing the market correctly once is difficult enough. Doing so correctly twice is even more unlikely because investors who try often sell when they feel bad and buy when feel good. This strategy of investing leads investors to buy high and sell low, which creates disappointing results in a financial plan.

Since 1900, the average length of market expansions has been 48 months. The average length of recessions has only been 15 months.¹ We spend about triple the time in market expansions on average as recessionary periods.

If an investor decides to swerve to miss a potential recession, they’re much more likely to miss part of an expansion than a recession. The average recession is almost over by the time investors realize there is a recession, meaning investors who swerve risk getting out of the market after they’ve already endured the greatest pain of the downturn.

You only need to look back at the last few years to find ample evidence of moments when investors were convinced they should swerve:

• In the fall of 2016, investors felt uncertain about the outcome of the Brexit vote, stretched market valuations, and the U.S. presidential election.
• In early 2018, the market experienced its first correction in 2 years due to concerns about rising inflation and the initiation of tariffs against our largest trading partners.
• In late 2018, stocks plummeted nearly 20% due to ongoing trade dispute fears and a Fed that continued to raise rates.

Investors who swerved by going to cash during these times missed out on the continued expansion and market rally that followed each of these events. Those who stayed the course didn’t pay the substantial costs of getting it wrong.

Think Before You Swerve

 With rising concerns over the trade dispute with the U.S. and China, ongoing geopolitical risks, and uncertainty with Brexit and European elections, there is no shortage of risks that can trigger fear of loss.

But rather than trying to predict the next market downturn and when to swerve to avoid it, long-term investors should consider simply preparing for it. Preparation starts with owning a diversified portfolio, thereby reducing the chance all of your investments move in the same direction at the same time. Diversification can help reduce, but not eliminate, losses in a market downturn.

You can also prepare by ensuring the mix of stocks and bonds that you own aligns with your personal risk tolerance and time horizon. Your allocation may be in need of some attention after a 10-year bull market; make sure you’re not taking on more risk than you can truly handle.

As investors, there will always be market risks that make us want to swerve our portfolio away from our long-term plan. But by knowing the low chances of getting it right by swerving and the high cost of getting it wrong, investors can arm themselves with knowledge that can help them stay on the investing road even when their instincts are telling them to swerve.

Source:    ¹ www.nber.org/cycles/

Important Disclosures:  Visionary Wealth Advisors (“VWA” or the “Firm”) is an SEC registered investment adviser. For information about VWA’s registration status and business operations, please consult the Firm’s Form ADV disclosure documents, the most recent version is available on the SEC’s IAPD website at www.adviserinfo.sec.gov. 

This Market Review (“Review”) is provided for informational purposes only.  The Review should not be construed as personalized investment, tax or legal advice, including the recommendation to engage in a particular investment strategy.  This Review, by itself, does not contain enough information to support an investment decision.  All information in this Review is considered accurate at the time of production, but no warranty of accuracy is given. 

 Furthermore, investors should not assume that future performance of any specific index, security, investment product or strategy referenced in the Review, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s).  Past performances referenced in the Review may not be indicative of future results and may have been impacted by events and economic conditions that will not occur or prevail in the future.  Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices referenced in the Review are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products.  Investing involves the risk of loss and investors should be prepared to bear potential losses, including the full amount invested.

Visionary Wealth Advisors Announces Job Opening

Position is for an Analyst out of the O’Fallon, IL, office

O’Fallon, IL— July 5, 2019 — Visionary Wealth Advisors, LLC is seeking a motivated, driven individual for their Analyst role within the Visionary Think Tank. The Visionary Think Tank is responsible for managing assets of the firm including trading, billing, and portfolio management. The Analyst will work out of the O’Fallon, Illinois office and will report directly to the Chief Operating Officer. The Analyst will share responsibilities relating to data management, trading operations, and billing operations.

Key Responsibilities include assisting in daily trades within the Visionary managed portfolios including trades, distributions and out of balance thresholds; quarterly fee billing on client accounts by monitoring and updating fee settings within Morningstar Office including advisory fees, excluded positions and accounts, and joint work splits. Analyst will also review and approve account agreement and ensure proper data entry into Morningstar Office; complete work order requests for model comparisons on prospective client accounts and manage various compliance policies and procedures as it related to client accounts and ensure accordance with Securities and Exchange Commission guidelines.

The candidate must have an undergraduate degree in Finance, Economics, or Business Administration. Series 65 registration is a plus; if not registered, the employee will be required to successfully pass the Series 65 Exam within 9 months of employment. As an Analyst, you must be proficient in Microsoft Office Suite, have the ability to work independently on various projects simultaneously, possess strong analytical and interpersonal skills, time management skills and the ability to meet deadlines. Lastly, the candidate must have excellent verbal and written communication skills.

Paid time off, retirement plan with a company match and health insurance is available. The employee will receive a competitive salary with potential to grow.

Please send all questions and resumes to Kate Hurt at 618-726-3001 or kate.hurt@vwa-llc.com.

Visionary Wealth Advisors, LLC is an independent registered investment advisory firm committed to helping clients reach their dreams by providing world-class, client-centered wealth management services while promoting our founding culture of faith, family, and community.

 Visionary Wealth Advisors is an Equal Opportunity Employer. Visionary does not discriminate on the basis of race, religion, color, sex, gender identity, sexual orientation, age, non-disqualifying physical or mental disability, national origin, veteran status or any other basis covered by appropriate law. All employment is decided on the basis of qualifications, merit, and business need.

Second Quarter Market Review

John Fischer, CFA®, CFP® | Chief Investment Officer

July 15, 2019

If you’re a sports fan, you’ve probably heard some variation of this cliché from players and coaches alike: “To be successful, don’t get too high after the wins or too low after the losses.”

You hear it in sports so often for a reason. There’s a lot of truth in that saying — and it may even be more true for investors than athletes.

Some of the biggest investment mistakes people make happen when their emotions dictate their investment decisions, driving them to buy when they feel good and sell when they feel bad.

With the S&P 500 and Dow indices hitting all-time highs in recent weeks, now is a good time to stop and take a pulse of investor sentiment to see if you’re at risk of getting too high after recent market wins.

What Caused the Best First Half for the S&P 500 in Over 20 Years?

After a disappointing May, the market rebounded strongly in June. The S&P 500 finished the month up 7% and ended the first half of the year up 17%. That’s almost double its long-term average annual return and the market’s best first half since 1997.

The two primary catalysts of the June rally were the Fed’s perceived shift in interest rate policy and a thawing of tensions surrounding the trade dispute between the U.S. and China. But if you take a closer look at both themes, you might find there’s good reason to hold off on popping the champagne in celebration.

Despite Good News in the Short-Term, the Fed Might Feel Concerns About the Future

During its June meeting, Fed officials indicated that a rate cut was likely in the near future. While the market expected such a signal, this confirmation from the Fed left investors in very positive spirits after four rate increases last year.

The market likes lower rates because it incentivizes consumers and businesses to borrow money and spend, which is good for the economy. As a result, stocks climbed higher on the Fed news.

But normally at this point in the market cycle, the Fed is raising rates to offset higher inflation and prevent the economy from overheating. In other words, the economy can get so strong that it risks growing too fast.

The Fed raises rates to slow its speed to maintain the economic expansion over a longer period. This is good in the short-term — but the fact that the Fed feels compelled to consider cutting rates suggests they might feel the economy needs a little help. That’s not a great sign for the long-term.

The U.S & China Trade Dispute Is Looking Better – But Unlikely to Be Fully, Swiftly Resolved

Surprising as it may be, the trade dispute between the U.S. and China has been going for over a year at this point. It began in March of 2018 when President Trump requested consideration of imposing tariffs on China.

Since then, the market has been taking a frequent temperature of the ongoing negotiations. The readings show both market and investor sentiments tend to shift like changes in the wind.

It was the perceived pessimism regarding a resolution that dragged markets lower at the end of 2018. That pessimism shifted to optimism in the best first quarter since 2009 only to reverse course yet again in May, when negotiations broke off and additional tariffs were threatened.

Cooler heads prevailed in June as the two countries agreed to postpone additional tariffs and return to the negotiating table. Stocks rallied on the news that the world’s two largest economies were once again working towards a resolution.

But just like a sports team on a winning streak, investors need to be wary of getting too high following this most recent news.

After all, the market rallied on the fact that the two countries would resume negotiations, or resume even talking to one another — not because there have been positive steps towards an actual resolution.

Each country has some significant concerns that are unlikely to be resolved swiftly given the slow pace of negotiations to this point. The tariffs and the uncertainty they create for business investment and personal consumption will continue to serve as a drag on both U.S. and global growth. This economic drag from the trade dispute has been a large contributor to the Fed signaling a future rate cut.

Not Too High, Not Too Low: Investors Need to Maintain an Emotional Balancing Act

These concerns are not to suggest that the sky is falling. Investment mistakes happen not just when people feel panicked about what the market is doing… but when they feel overly optimistic about it, too, which is why we need to be careful here.

“Careful” means not letting your emotions swing too much in any direction, positive or negative. While we’ve covered some reasons why you don’t want to be too jubilant about recent market headlines, there are also plenty of reasons to feel positive within reason.

With unemployment near its 50-year low and wage growth hovering around 3%, the health of the consumer remains upbeat. Corporations are expected to see positive earnings growth again in 2019 and a low interest rate environment should also contribute to support the growing economy.

These market fundamentals should help the now 10-year economic expansion continue. Even as it does so, keep in mind that a hallmark of a market cycle is that as the cycle ages, the risks to the downside become more balanced with the potential for further upside.

This balancing of headwinds and tailwinds results in additional market volatility and uncertainty for investors. While the new market highs to close the quarter left many investors in positive spirits, follow the composed lead set by your favorite sports teams and coaches during post-winning-game press conferences: don’t get too high or too low.

Many investors get complacent with the level of risk in their portfolio during bull markets, forgetting the pains from the last significant market decline. One great way to avoid this is to review the balance of stocks and bonds in your portfolio to ensure the amount of risk you’re taking aligns with your actual comfort with risk.

By reviewing your diversification and keeping a focus on long-term financial goals, investors can avoid getting too high — even after the recent market all-time highs.

Important Disclosures:  Visionary Wealth Advisors (“VWA” or the “Firm”) is an SEC registered investment adviser. For information about VWA’s registration status and business operations, please consult the Firm’s Form ADV disclosure documents, the most recent version is available on the SEC’s IAPD website at www.adviserinfo.sec.gov.   

This Market Review (“Review”) is provided for informational purposes only.  The Review should not be construed as personalized investment, tax or legal advice, including the recommendation to engage in a particular investment strategy.  This Review, by itself, does not contain enough information to support an investment decision.  All information in this Review is considered accurate at the time of production, but no warranty of accuracy is given.  

Furthermore, investors should not assume that future performance of any specific index, security, investment product or strategy referenced in the Review, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s).  Past performances referenced in the Review may not be indicative of future results and may have been impacted by events and economic conditions that will not occur or prevail in the future.  Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices referenced in the Review are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products.  Investing involves the risk of loss and investors should be prepared to bear potential losses, including the full amount invested. 

Is Amazon Training Us to Chase Past Performance? 

John Fischer, CFA®, CFP® | Chief Investment Officer

September 17, 2019

When it comes to investing, watching investors chase past performance is as timeless as having a hot dog at a baseball game. For as long as there’s been a stock that has performed well, there have been investors standing in line waiting to get in on the action after its initial success.

And I understand why it happens. As an investor, I know it feels good to buy a stock that has done well in the past because it seems like a safe bet; surely that stock will only continue to do well into the future.

We tend to believe this thanks in part to recency bias, or the inclination to believe that just because something is a certain way today (or was in the recent past), that it will continue to be that way tomorrow. But we also believe it because we’re trained to think that judging past performance is a great way to make decisions in other aspects of life.

That’s bad news for investors, especially considering that when it comes to the financial markets, yesterday’s winner is often tomorrow’s loser.

How Our Decision-Making Process Mis-Leads Us

To get a better understanding of why all investors are tempted to chase performance, consider a common decision-making process.

Recently I decided my son Blake needed a tee-ball set. So I went on Amazon to do some research, decide on a product, and make the purchase. In doing so, did I compare the manufacturer’s description of various tee ball sets? Of course not!

But I did immediately compare users’ past reviews of various tee-ball sets, rationalizing that I wanted the highest rated tee-ball set with a decent number of reviews for a reasonable price. The set I bought arrived a day later, and my son received that particular product because I made a decision based on past experiences of other people with the same product.

A Reliance on “Past Performance” Can Work When We’re Shopping – But Not When We’re Investing

It was these past reviews that gave me confidence that my son would have a positive experience with the tee-ball set as well. Why did their reviews give me confidence in my decision? Because I’ve often used people’s reviews in the past when making a buying decision and it usually serves me well.

That is, the past performance (reviews) of items I’ve purchased has usually been a strong indicator of my likely satisfaction with the same item.

There are many other aspects of life where past performance can serve as a strong predictor of future outcomes – picking a restaurant, a doctor, or a university, to name a few. It’s these
experiences that create our instinctive nature to use past performance in predicting future outcomes in all aspects of life.

What’s unfortunate is that investing doesn’t play by the same rules…and that’s what makes disciplined investing so difficult.

Why Past Performance is a Poor Predictor of Future Investment Returns

The chart below illustrates the returns of different asset classes over time. In looking at the chart and comparing returns of different asset classes from one year to the next, you can quickly see that knowing how an investment performed in the past gives you very little, if any, information about its future performance:

Source: https://awealthofcommonsense.com

Why doesn’t an evaluation of past performance work with investing when it’s reasonably useful in other areas of life? There are two primary reasons – one economic and one less scientific.

Investing, at a high level, happens when a large group of buyers and sellers with different sources of information and opinions engage in an exchange of securities or assets in a financial market. That information and the expectations investors have both change over time. That, in turn, causes investors’ buy/sell decisions to change as well.

This variance in opinions among investors cause the best/worst performers to rotate for non-economic reasons. Put it all together and past investment performance tends to be more random and less predictive of future outcomes.

The other more economic reason past performance is a poor predictor of future investment returns is rooted in the fundamentals of investing. In general, the better an investment performs over a period of time, the higher its valuation will be relative to the beginning of the period. The higher an investment’s current valuation, the lower its future returns will be (all else being equal). Strong past performance actually often contributes to lower expected future performance.

The same is true of poor performance over time, which lowers an investment’s valuation and thus increasing its chances of higher future returns. This means past performance is not only a poor predictor of future outcomes in investing, but it can also lead investors down the wrong path at the absolute worst time.

Making investment decisions based on past performance actually encourages investors to buy more expensive investments and sell cheaper ones — and we know successful investing mandates the exact opposite behavior.

How Can Investors Turn the Tide?

The first step to curbing the inclination to chase past performance is awareness. Know that we, as humans, share an instinct to believe that past investment performance is a good predictor of future results. I have it, you have it, we all have it. And generally speaking it’s a good instinct in life in general – but not when it comes to investing.

The key differentiator in determining why it affects some investors more than others is education.  Those with the most knowledge and the most awareness are the investors who are least likely to give into the temptation to chase investment performance. They understand its pitfalls and false promises. Educating yourself on your own natural tendency is the best thing you can do to prevent making this mistake with your own investments.

The second step is asking yourself the question, “If past performance won’t help me make better investment decisions that increase my chances of better results, then what will?” The answer lies in focusing on the areas of investing within your control.

That focus should start with setting financial goals – or why you wish to invest in the first place. Then, consider an allocation of stocks and bonds that aligns with your comfort with risk and your financial goals. Finally, by periodically rebalancing your portfolio and keeping investment expenses low, investors will significantly increase the chances of achieving their financial goals – which is truly the most successful investment outcome you can achieve.

There are many life experiences that teach us that past performance is the best predictor of future outcomes. It’s why all investors, professional and otherwise, are programmed to apply the same logic to investing. But if investors can demonstrate the awareness to why the logic fails in investing and shift their focus towards that which they can control, they can then start to increase the chances of better future investment results.

______________________________________________________________________________________________________

Important Disclosures:  Visionary Wealth Advisors (“VWA” or the “Firm”) is an SEC registered investment adviser. For information about VWA’s registration status and business operations, please consult the Firm’s Form ADV disclosure documents, the most recent version is available on the SEC’s IAPD website at www.adviserinfo.sec.gov. 

This Market Review (“Review”) is provided for informational purposes only.  The Review should not be construed as personalized investment, tax or legal advice, including the recommendation to engage in a particular investment strategy.  This Review, by itself, does not contain enough information to support an investment decision.  All information in this Review is considered accurate at the time of production, but no warranty of accuracy is given. 

 Furthermore, investors should not assume that future performance of any specific index, security, investment product or strategy referenced in the Review, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s).  Past performances referenced in the Review may not be indicative of future results and may have been impacted by events and economic conditions that will not occur or prevail in the future.  Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices referenced in the Review are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products.  Investing involves the risk of loss and investors should be prepared to bear potential losses, including the full amount invested.

Seven Visionary Advisors named
“Five Star Wealth Manager”

Visionary Adds New Wealth Management Advisor Katie Martin

O’Fallon— October 15, 2019 — Katie Martin, CFA, CFP®, joins Visionary Wealth Advisors after 17 years in the Research Department at Edward Jones in various roles. Katie’s passion to help clients chart a course to achieve their goals by building personal connections and uncovering what they value most will serve her well as a Wealth Management Advisor.

“We are excited to have Katie Martin join the Visionary Family!,” exclaims Co-founder and CEO, Brett Gilliland. “Her extensive knowledge of the markets and her high emotional intelligence will be a huge asset for her clients and community. Katie could have chosen many routes to take her career in finance, but she chose to be a wealth management advisor to serve clients in a fiduciary manner and to help them achieve their most important goals and dreams,” says Gilliland.

Co-founder and President Tim Hammett, CFP®, AEP, says, “Visionary is extremely proud to add Katie to our team! Her strong credentials and wisdom will bring great value to her clients.” He adds, “Our culture will be further strengthened by her integrity and character.”

Katie earned a Bachelor of Science degree in Finance from Bradley University. She earned the Chartered Financial Analyst designation in 2005 and CERTIFIED FINANCIAL PLANNER designation in 2018. She currently resides in Columbia, Illinois, with her husband and two daughters.

Visionary Wealth Advisors is an independent Registered Investment Advisor, founded in March 2014 by Brett Gilliland and Tim Hammett. Visionary Wealth Advisors provides comprehensive financial planning and wealth management services, including retirement, family office¹, college and estate planning, and small business retirement plans. Visionary Wealth Advisors has offices in Chesterfield, Jackson and St. Louis, MO, Edwardsville and O’Fallon, IL, Palm Beach Gardens, Florida, and Buena Vista, Colorado.

[1] Family office services are provided through Visionary’s partnership with Greenway Family Office.

Third Quarter Market Review

John Fischer, CFA®, CFP® | Chief Investment Officer

October 16, 2019

Tricks or Treats? How the Market May Look in the Last Quarter of 2019

By all accounts, 2019 has been a banner year for investors so far, with every major asset class experiencing positive returns through the first 9 months of the year. But as we enter the last quarter when the weather starts to cool, investors seem increasingly worried about markets doing the same.

With Halloween approaching, it seems natural to ask: does the market have more tricks than treats in store for us? Or will the 10-year market rally hold out for a little longer?

The Many Reasons to Expect Market Tricks

Investor anxiety, as measured by the VIX index, has risen over the past 2 months. The metric is now at a level not seen since its last peak in January 2019, as existing market concerns have become even scarier and new market concerns have appeared.

The biggest market ghoul that just won’t fadeaway is the trade dispute with China. The war of words and tariffs has stretched on for almost two years now, and what was initially considered a bump in the economic road has turned into a much bigger obstacle.

Given the lack of meaningful progress on the key issues in the dispute to this point, investors should expect news headlines to spur ongoing market volatility. While still possible, a comprehensive resolution prior to year-end is increasingly unlikely.

This isn’t the only issue spooking investors. Manufacturing numbers have shown particular weakness, dipping to their lowest levels since 2009. Both consumer and business confidence figures have fallen in recent months from their recent highs. And then there’s the issue of the inverted yield curve, which happens when short-term government yields are higher than the 10 year government yield.

These numbers can all give investors quite a fright about future economic growth, but this isn’t reason to get scared out of your set.

While an inverted yield curve has often signaled a recession in the past, we should keep in mind that it isn’t a perfectly accurate measure of market movements. The time between inversion and recession has varied considerably, as well. We would caution investors from using any one data point for their investment decisions as nothing works all the time.

Another reason for a general sense of unease for many investors are the geopolitical challenges that continue to lurk in the shadows. The vote by the UK to leave the European Union (AKA, Brexit) occurred more than 3 years ago, but its final resolution is still uncertain. This not only drags down economic growth in European economies, but trading partners for the EU, too. In other areas of the world, the U.S.’s tenuous relations with Iran and North Korea have the potential to supercharge investor fear as well.

But There Are Still Opportunities for Treats Instead

Despite all these ghastly, ghoulish concerns about the market, it would be short-sighted to predict the death of the bull market too soon. That’s thanks to one very important factor: the U.S. consumer.

The U.S. consumer makes up about 70% of our GDP. When you look at the health and wealth of the U.S. economy, consumer spending is critical to consider — and that’s currently looking strong.

The unemployment rate is 3.5%, its lowest level in 50 years. Most consumers who want jobs, have jobs. Better yet, consumer wage growth is rising at a rate above 3% for the year.

Some other market treats for investors include low interest rates and low inflation. Low interest rates incentivize consumers to borrow and purchase goods such as homes and cars, while low inflation means consumers can purchase more goods with the money in their pockets. They have done exactly that as personal spending has risen by an average of 3% per year since 2017.

Low inflation has also allowed the Fed to continue to support the economy with its accommodative monetary policy. The Fed has cut its short-term interest rate twice this year to help support the economy in the face of market uncertainty stemming from the China trade dispute.

Put this all together and the U.S. economy is expected to grow at 2.2% for 2019.¹ While that’s modest, it’s also consistent with the rate we’ve seen throughout this 10-year market rally. Furthermore, its strong evidence that a recession may not be as imminent as some prognosticators suggest.

Trick or Treat? What the Last Quarter of 2019 Might Have in Store

It should come as no surprise to investors that after 10 years of an economic expansion, the number of tricks, or negative economic indicators, are beginning to rival the treats, or positive indicators, we’ve all gotten used to seeing for the last decade. The risks of future market downside offsetting the potential for further upside is a normal part of investing in the later stages of the economic cycle.

Every market cycle in history has ended in a recession so we know that, eventually, we’ll have to deal with some tricks coming our way. But no one really knows when that will happen and the U.S. consumer is doing everything possible to push that time further down the road.

In the meantime, investors would do well to avoid the guessing game of when the economic music will stop. Instead, focus on the aspects of your financial plan that fall within your control.

After 10 years of market prosperity, investors should review their allocation to stocks and bonds to ensure their risk exposure aligns with their financial plan and comfort with risk. Make sure your portfolio is appropriately diversified, and review your personal savings and spending rates.

Focusing on the aspects of your financial plan you can control is the best way to make your financial goals become treats, not tricks.

Source: ¹ https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20190918.htm

Important Disclosures:  Visionary Wealth Advisors (“VWA” or the “Firm”) is an SEC registered investment adviser. For information about VWA’s registration status and business operations, please consult the Firm’s Form ADV disclosure documents, the most recent version is available on the SEC’s IAPD website at www.adviserinfo.sec.gov.    This Market Review (“Review”) is provided for informational purposes only.  The Review should not be construed as personalized investment, tax or legal advice, including the recommendation to engage in a particular investment strategy.  This Review, by itself, does not contain enough information to support an investment decision.  All information in this Review is considered accurate at the time of production, but no warranty of accuracy is given.  Furthermore, investors should not assume that future performance of any specific index, security, investment product or strategy referenced in the Review, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s).  Past performances referenced in the Review may not be indicative of future results and may have been impacted by events and economic conditions that will not occur or prevail in the future.  Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices referenced in the Review are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Investing involves the risk of loss and investors should be prepared to bear potential losses, including the full amount invested.

Visionary Wealth Advisors Announces Job Opening

Position is for an Administrative Assistant out of the St. Louis, MO, office

St. Louis— November 5, 2019 — Wealth Management Advisor, Dan Laure, is seeking a motivated, driven individual for an administrative role for his professional team. The individual should be a self-starter who can independently anticipate needs, maintain a strong customer focus, enjoy working as part of a team, have excellent planning and organizing skills, as well as possess great written/verbal communication skills. The individual will work out of the St. Louis, Missouri office and will report directly to Dan Laure.

Key Responsibilities include administrative and general office tasks such as managing the advisor’s calendar, preparing paperwork for meetings, updating and maintaining the CRM system, panning and coordinating client events, and creating and sending client communications. The individual will also be asked to monitor and update sales pipeline, open and service accounts at custodians, update financial planning software, request insurance illustrations and applications and facilitate risk assessment to clients.

The candidate must have two plus years of business experience, the ability to multi-task in fast paced environment. They must also be highly proficient at Microsoft Office Suite, have excellent organizational, time management, and communication skills, can recognize opportunities to improve and stream-line processes, and have discretion in handling confidential materials and information.

Bonus potential, stipend for health insurance and retirement benefits after one year of employment is available. The employee will receive a competitive salary with potential to grow.

Please send all questions and resumes to Dan Laure at 314-764-2731 or dan.laure@vwa-llc.com.

Visionary Wealth Advisors, LLC is an independent registered investment advisory firm committed to helping clients reach their dreams by providing world-class, client-centered wealth management services while promoting our founding culture of faith, family, and community.

 Visionary Wealth Advisors is an Equal Opportunity Employer. Visionary does not discriminate on the basis of race, religion, color, sex, gender identity, sexual orientation, age, non-disqualifying physical or mental disability, national origin, veteran status or any other basis covered by appropriate law. All employment is decided on the basis of qualifications, merit, and business need.

Lessons from Soccer Goalies Can Make Us Better Investors

John Fischer, CFA®, CFP® | Chief Investment Officer

December 2, 2019

There’s no way around it: market declines are painful. Not only do they shrink your investment accounts, but they also cause a lot of stress and anxiety while they’re at it.

As an investor, these moments tend to inspire that little voice in your head to start getting louder about how you need to do something — something different; something to stop the pain that comes with experiencing loss.

These feelings are usually so strong that it usually doesn’t matter that we have the benefit of hindsight, which tells us making investment changes just to make changes isn’t prudent. This rarely does much to change the presence or the volume of the voice in our heads demanding we take action.

What Soccer Penalty Kicks and Investing in the Market Have in Common

We have to at least try to make the pain stop, right? Everyone feels that desire to do something in response to the discomfort we feel in these situations.

In fact, that tendency is not just normal, it’s instinctive. To understand this further, we can consider the case of penalty kicks in soccer.

With a penalty kick, the goalie has less than a second to react to stop a goal once the shooter strikes the ball. Given this incredibly fast required reaction time, a goalie must decide their move prior to the shooter striking the ball if they hope to have a reasonable chance of saving the shot.

So what’s the optimal position for a goalie? Should they jump left, right, or stay standing in the middle?

The Best Action Is Often No Action at All

Researchers evaluated elite male goalkeepers and looked at the penalty shot distribution of hundreds of shots that they faced. Given the 3 options for goalies of jumping left, right, or staying in the middle of the goal, researchers found that the optimal decision for goalies to stop the most shots was to remain standing in the middle of the goal – not to jump left or right.

Objectively, the best action for a goalkeeper is clear: stand in the middle of your goal. That’s the research-backed, evidence-based way to give yourself (and your team) the best chance of success if your job is to stop balls from going into the net.

But how does that compare to what goalies actually do?

Turns out that goalkeepers jump left or right 94% of the time. Only 6% of the time do goalkeepers choose the action that is statistically proven to give them the highest chance of success.¹

Right Incentives, Wrong Decisions

When you consider the incentives elite goalies have to stop penalty kicks, they are abundant. For professional athletes, there are few incentives more powerful than maintaining personal pride and the potential for winning.

But most athletes also have a desire to contribute and to help their team — and it never hurts that success on the field usually equates to better contracts, better endorsements, and better status as a celebrity in and outside of the game.

There’s really no question as to whether or not goalies want to stop penalty kicks. Clearly, they do. But despite strong incentives to do so, they only choose the option that gives them the best chance of success an alarmingly low rate of 6% of the time.

How Pain Avoidance Influences Smart People to Make Questionable Choices

Why do goalies neglect to choose the objectively “correct” response even if they know better? It’s because of the pain they’re looking to avoid.

Researchers found that goalies experience a greater amount of pain from a goal scored following inaction (standing in the middle of the goal) than the pain they experience following action (jumping left or right).

Goalies choose to dive one way or the other because the pain of failure is lessened by action. They make this choice despite that fact that in doing so, they are reducing their chance of a successful outcome!

In other words, the decision is driven by the desire to minimize pain, not to maximize success.

This phenomenon is called action bias — and it should matter to you because goalies aren’t the only ones who suffer from it. Investors are often led astray by the exact same bias.

How Action Bias Could Harm You as an Investor

The study of goalkeepers in soccer demonstrates that action bias exists even in a situation with huge financial incentives to decide correctly (i.e., signing a  bigger contract), and where the decision-makers are highly experienced in the decision to be made (professional athletes who specialize in a single technical position).

Action bias can impact you as an investor, too, regardless of how experienced or incentivized you are. Don’t believe it? Think about how often you’ve heard that internal voice telling you, “well we have to do something, anything!” when the market experiences some volatility or stock prices drop.

Investors also feel more pain from losing money when they don’t take any action to try and stop the bleeding. They feel less pain when they lose money if they did something to attempt to mitigate the loss, even if the very action they take reduces their chances of a positive outcome.

How many investors who acted during the Great Recession a decade ago (i.e., going to cash) would have been financially better off in the long run by not acting at all, or doing nothing? Given the bull market of the past 10+ years, I’d venture to say the answer is the vast majority.

Steps to Take to Reduce Your Bias Towards Action

It’s one thing to understand that investors (including you and me) suffer from action bias. It’s another to understand what you can do to fight against it and not let it negatively influence you, which can lead to undesirable investment outcomes.

The first step is creating awareness that all investors – which means clients, financial advisors, portfolio managers, and everyone in between – are predisposed to a bias towards action. Understanding, awareness, and acknowledgement are critical to being able to catch this bias working against you.

Second, investors would be well-served to sit down before the next market decline and create 2 lists:

1. A list of the actions they will take during the next market downturn (such as rebalancing, assess comfort with risk, and reviewing the viability of their financial plan).
2. A list of the actions they won’t take during the next downturn (which could include shifting to an ultra-conservative portfolio and making short-term decisions with long-term money).

Make these lists part of your written investment plan so you can reference them during the next market decline as a valuable reminder when your inner voice starts campaigning for action.

After all, you didn’t learn to stop, drop, and roll when your arm was on fire. That mantra was drilled into your mind as a preventative measure. In the same way, it’s critical that you create and know your plan to combat action bias before you need it.

Source: ¹ https://mpra.ub.uni-muenchen.de/4477/1/MPRA_paper_4477.pdf

Important Disclosures:  Visionary Wealth Advisors (“VWA” or the “Firm”) is an SEC registered investment adviser. For information about VWA’s registration status and business operations, please consult the Firm’s Form ADV disclosure documents, the most recent version is available on the SEC’s IAPD website at www.adviserinfo.sec.gov. This Market Review (“Review”) is provided for informational purposes only.  The Review should not be construed as personalized investment, tax or legal advice, including the recommendation to engage in a particular investment strategy.  This Review, by itself, does not contain enough information to support an investment decision.  All information in this Review is considered accurate at the time of production, but no warranty of accuracy is given. Furthermore, investors should not assume that future performance of any specific index, security, investment product or strategy referenced in the Review, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s).  Past performances referenced in the Review may not be indicative of future results and may have been impacted by events and economic conditions that will not occur or prevail in the future.  Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices referenced in the Review are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products.  Investing involves the risk of loss and investors should be prepared to bear potential losses, including the full amount invested.

Fourth Quarter Market Review

John Fischer, CFA®, CFP® | Chief Investment Officer

January 21, 2020

Just as surely as we’re (finally) packing away the holiday decorations and making our new year’s resolutions, you can bet this time of year comes with a flurry of investment predictions for 2020.

You can’t open a financial magazine or turn on a TV show without seeing so-called market experts doing their best fortune-teller impressions to predict what the new year means for the markets.

Markets by their very nature are uncertain, and predictions promise to remove that uncertainty for us. But that promise is usually empty and can lure investors eager to earn optimal returns off track and into trouble.

Let’s take a closer look at the hazards of experts’ predictions — and explore why you might want to focus on resolutions instead.

“Experts” in the Media Have Dismal Track Records

If you watch a baseball game on TV, you’ll see each player’s batting average as they step up to the plate to bat. Before the hitter takes a swing, you have a good sense of the chance the player will get a hit or make an out.

When was the last time you saw the average rate of accurate predictions overlaid on a market expert as they give you their investment predictions for the coming year?

You don’t, of course. Doesn’t it seem strange that their all-time “batting average” isn’t displayed to enhance their stature and credibility — especially if they were any good at the game? It’s not if you consider how often they fail to get it right.

On the heels of the S&P 500 falling nearly 20% in the fourth quarter of 2018, how many experts predicted that the S&P 500 would be up 30% for 2019, more than 3 times its long-term average and the best year since 2013?

In 2018, the Fed raised interest rates four times. How many experts predicted the Fed would not only pause their interest rate hikes in 2019 but in fact reverse course to the tune of cutting rates 3 times?

The 10 year treasury yield finished 2018 at 2.69%. How many market experts predicted that the Barclays Aggregate Bond Index, a proxy for the US bond market, would return almost 9% in 2019 – a total return more than 3 times the 10 year treasury yield to start the year?

These aren’t rhetorical questions. To end 2018, Barron’s magazine asked 10 Wall Street strategists to predict the 10 year treasury yield at the end of 2019. It closed 2018 at 2.69%.

All 10 experts predicted the 10 year yield would be higher to end 2019. 5 strategists predicted it would close above 3.25%. It finished the year at 1.92%. All 10 strategists missed the mark by more than ¾ of a percent.

More comically, if this was a contest of just guessing the direction of interest rates up or down (a 50/50 chance of being right), each and every strategist still would have been wrong.

Focus on Resolutions, Not Predictions

The reason investment predictions are so dangerous to investors is because they try to predict an uncertain future, which is impossible to do consistently over time. Hitting on 3 out of 10 tries might be Hall of Fame status for baseball players. But making your investment decisions based on predictions with a similar success rate won’t lead you to your financial goals.

Rather than focus on investment predictions, investors should spend their time on resolutions. Resolutions are much more powerful than predictions for one reason: control.

We have no control over the success of market predictions. A resolution by definition is a firm decision to do or not do something. We have great control over the success of our resolutions.

To help inspire you to create some resolutions of your own, here are mine for 2020:

Set appropriate return expectations. In 2019, returns on both stocks and bonds far exceeded long-term averages. We should celebrate the successes of 2019 in getting us closer to our financial goals — and we should realize these returns were extraordinarily high and unlikely to occur again in 2020. Given valuations of both stocks and bonds are above their long-term averages, investors should prepare for lower returns in 2020 and likely beyond.

Make sure the risk in your portfolio aligns with your risk tolerance and time horizon. Research shows our tolerance for risk changes under different market conditions. After a terrific year of returns and the 10^th year of market expansion, investors should make sure their portfolios aren’t taking too much risk and re-balance if necessary. The best time to buy an umbrella is before the storm when the sun is shining. Investors and the market are basking in the sun right now.

Plan for more market fluctuation in 2020. Despite the persistent headline risk of the China trade dispute and the Fed, 2019 saw modest volatility with only 2 market pullbacks of 5% and zero corrections of 10%. Given the ongoing trade negotiations with China, geopolitical concerns with Iran, and being a presidential election year, investors should prepare for more fluctuation in their portfolios in 2020.

Make investment decisions based on your investing time horizon, not based on the timing of the next recession or the name of the next U.S. President. Many experts struck fear in investors last year with talks of an imminent recession that has yet to arrive. Meanwhile, the media machine is starting to churn on the presidential election and its effect on the market.

We continue to advise investors against swerving to avoid the next recession. Let’s also remember that investors had concerns when both President Obama and President Trump took office that they would be detrimental to the market. The S&P 500 has averaged annual returns above 15% during the tenure of both presidents.¹

The elections may create some short-term market volatility but ultimately the biggest drivers of market returns in the long run are the economy and corporate earnings, not which party or candidate controls the White House and/or Congress.

The Power of Preparation Over Prediction

With annual market predictions comes the incentive for investors to make short-term decisions for their long-term goals. Rather than succumbing to this annual tradition, investors should skip the fortune telling game of predicting the uncertain future and instead prepare for it.

By focusing on your investment resolutions for the new year and preparing for an uncertain future, I predict you will greatly increase the chances of achieving your financial goals. Now that’s a prediction you can take to the bank!

Source: ¹ Morningstar

Important Disclosures:  Visionary Wealth Advisors (“VWA” or the “Firm”) is an SEC registered investment adviser. For information about VWA’s registration status and business operations, please consult the Firm’s Form ADV disclosure documents, the most recent version is available on the SEC’s IAPD website at www.adviserinfo.sec.gov.    This Market Review (“Review”) is provided for informational purposes only.  The Review should not be construed as personalized investment, tax or legal advice, including the recommendation to engage in a particular investment strategy.  This Review, by itself, does not contain enough information to support an investment decision.  All information in this Review is considered accurate at the time of production, but no warranty of accuracy is given.  Furthermore, investors should not assume that future performance of any specific index, security, investment product or strategy referenced in the Review, either directly or indirectly, will be profitable or equal to the corresponding indicated performance level(s).  Past performances referenced in the Review may not be indicative of future results and may have been impacted by events and economic conditions that will not occur or prevail in the future.  Any reference to a market index is included for illustrative purposes only, as it is not possible to directly invest in an index. Indices referenced in the Review are unmanaged, hypothetical vehicles that serve as market indicators and do not account for the deduction of management fees or transaction costs generally associated with investable products. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Investing involves the risk of loss and investors should be prepared to bear potential losses, including the full amount invested.

News & Notes: Federal Reserve Meeting Last Week

John Fischer, CFA®, CFP® | Chief Investment Officer

February 6, 2020

Last week, the Federal Reserve held its inaugural meeting of 2020 and elected to keep the fed funds rate unchanged at a range of 1.50% – 1.75%, as expected. The transcript of Chairman Jerome Powell’s press conference after the Fed’s meeting can be found here. Below are some key takeaways.

• Economic Growth is Moderate but Stable – With the unemployment rate near 50 year lows, rising wages, positive consumer confidence, and household spending growth, the Fed continues to see moderate economic growth in the future. While business spending, exports, and manufacturing output have been recent headwinds to the economy, the Fed believes the recent progress in trade deals such as with China, Mexico, and Canada will relieve some of these economic pressures and allow global growth to stabilize over the coming year.
• Risks to the Forecast – The Fed explained that uncertainties remain to their current forecast, which include the still unknown economic ramifications of the coronavirus, geopolitical risks such as the recent conflict with Iran, and getting inflation up to the Fed’s target of 2%.
• It Takes a While – Monetary stimulus, such as a shift in the fed funds rate generally takes roughly 6-9 months for its full effect to work its way through the economy. Last year, the Fed cut interest rates 3 times, all in the 2nd half of the year, so the economy is still seeing benefits from last year’s interest rate cuts despite the fact that the Fed held rates steady last week.
• Expectations for 2020 – The market is expecting the Fed to keep rates relatively unchanged in 2020 given the current moderate economic growth. But the Fed’s future interest rate decisions will be driven by economic data. If we take a short trip down memory lane to a year ago, the Fed was expected to raise rates in 2019 only to reverse course mid-year and cut rates 3 times.

Last week, it was announced that the U.S. economy grew at an annualized rate of 2.1% in the 4th quarter, lending further support to the Fed’s view that market fundamentals look to be supportive of moderate growth in the U.S. economy. As 2019 should remind us, trying to predict the actions or direction of the Fed is as difficult as trying to make investment predictions. For long-term investors, we would advise that changes to your investment portfolio be driven by changes to your financial plan, not short-term changes in Fed policy.

Weekly Quote: “The desire to perform all the time is usually a barrier to performing over time.”
– Robert Olstein

Make it a great day,
John

Important Disclosures: The opinions or predictions voiced in this material are for general information only and should not be construed as personalized investment advice, including the recommendation to engage in a particular investment strategy.  These predictions, alone, do not contain enough information to support an investment decision.  Past performances referenced within may not be indicative of future results and may have been impacted by events and economic conditions that will not occur or prevail in the future. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

News & Notes: Dow Loses 1,000+ Points Yesterday, Double the Loss of Black Monday!

John Fischer, CFA®, CFP® | Chief Investment Officer

February 28, 2020

*This article is about a virus, but it does not contain a virus.*

Concerns about the spread of the Coronavirus and its impact to global economic growth caused both the Dow & S&P 500 to fall by more than 3% yesterday. How quickly luck can change as we saw new market highs last Wednesday with gains of more than 4% year-to-date only to see 2020 gains wiped away with yesterday’s losses. Here’s some thoughts on the markets and the Coronavirus.

Click Bait and the Rule of Large Numbers – Markets hit new highs on a regular basis and with new highs come the potential for increased fear mongering by media outlets over absolute changes in the indices, such as:

• Dow loses 1,000+ points yesterday, double the loss of Black Monday! – The Dow fell by 3.5% yesterday, it fell by 22% on Black Monday in 1987.
• Dow plunges 1,000+ points. – Straight from TV headlines yesterday – why aren’t S&P losses flashed in the same manner? Because losing 111 points on the S&P doesn’t drive fear, emotion, and viewer’s eyeballs like losing 1,000 points. Knowing what the media is trying to do can help investors maintain perspective and not take the bait.
• Losing 1,031 points, the Dow suffered its 3rd largest point loss in history yesterday. – At 3.5%, it doesn’t even come close to the top 20 largest percentage declines in history (#20 was down 6.91%). Since 1985, there have been 55 one day declines larger than yesterday.1
• The Dow suffered its largest decline yesterday since 2018. – Does that make yesterday’s losses significant or the unusual market calm of the past year more notable?

Higher Volatility is not High Volatility – There’s a big difference between the two – turn the jacuzzi bubbles on to get bigger waves, stare down a tsunami to understand a BIG wave. In the past 20 years, the Dow has fallen by 3+% in a single day on average 3 times a year.2 It only happened once in 2019 and yesterday was the first time in 2020. The volatility we saw yesterday is higher than what we’ve seen in some time but it shouldn’t be confused with high or abnormal volatility.

3 Pullbacks and a Correction – On average, we see 3 pullbacks of 5% and 1 correction of 10% each year. In 2019, we saw 2 pullbacks of 5% (twice at 6%) and no 10% corrections. After yesterday’s losses, we’ve had our first 5% pullback in 6 months and first of 2020. Given how calm the markets have been since the beginning of 2019, yesterday’s losses may have felt more extreme to investors. Viewing yesterday’s activity through a longer-term lens can offer investors some much needed perspective.

The Coronavirus – As the virus continues to spread, it puts additional pressure on the economy in the short-term, which affects the markets. The spread of the virus has hindered travel in many countries, which affects airlines, business supply chains, consumer spending, demand for oil, corporate profits and many more aspects of the economy. While it’s difficult to predict the economic impacts of viral pandemics, historically the effects have been relatively short-term. Back in 2003 when the SARS outbreak struck China, its death rate of 10% of those it infected was much higher than the current death rate of the Coronavirus of 3%.3 In the 6 months between the first reported SARS case and the final reported case, the S&P 500 experienced a max drawdown of less than 4%.

In my investment predictions for 2020, I encouraged investors to plan for higher volatility in 2020 given the extremely low levels of recent volatility, a presidential election year, and being in the later stages of the market cycle breeds higher volatility. The market never fails to surprise and while no one could have predicted this cause of higher volatility, now would be a good time for investors to look at their financial plan and evaluate if they own the right balance of stocks and bonds given the 10 year bull market run we’ve experienced. By focusing on your plan and not on the daily market headlines, investors can help maintain a long-term perspective.

Source: 1,2 Yahoo Finance, 3 World Health Organization

Make it a great day, John

Important Disclosures: The opinions or predictions voiced in this material are for general information only and should not be construed as personalized investment advice, including the recommendation to engage in a particular investment strategy. These predictions, alone, do not contain enough information to support an investment decision. Past performances referenced within may not be indicative of future results and may have been impacted by events and economic conditions that will not occur or prevail in the future. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.