The Herald Bulletin

Afternoon Update


April 20, 2013

'Big Joe' Clark: Your portfolio might be at risk

There used to be a time when all stocks would rise and fall together. Investors could throw a dart and hit a winner, no problem. John F. Kennedy said in a 1963 speech that “a rising tide lifts all boats.” Well the tides have changed and while it’s been rising, some boats seem to have a leak. The days of traditional diversification have at the very least gone on vacation and at worst have changed forever.

Americans have been encouraged and instructed for years that they simply need to hold a mix of equities and bonds and they will be okay in the long-run. Trust the markets, stay diversified and relax was the mantra of many in the investment product sales force. Many that followed this strategy saw their portfolios catch fire during the Financial Crisis of 2008. In September and October of ‘08 Barclay’s Aggregate Bond Index fell nearly 16% with the S&P 500 fell nearly 40%.

Eventually the bonds were able to recover as even equities continued to slide. This period of time had many investors pulling their hair out and questioning their financial futures. For a couple of months it seemed that nothing was safe and nest eggs were at risk. It’s this type of “everything goes down”-type market action that causes investors to make emotional changes to their investments which can have long-lasting negative impacts. Remember fear and greed are at the root of most emotional movements in the market with fear always being the stronger of the two.

Fast forward to present day we can see that general passive diversification within equities doesn’t produce the type of returns many have grown to expect. Before the recent bout of weakness in the S&P 500, the equity index was up over 10% year-to-date. However, the same cannot be said for each specific sector of the market. As of last Thursday the Materials sector was down 8.7% and the beloved Technology sector had fallen 5.7% from the start of the year. Turning our attention to gold, which since 2009, and more or less 2002, seemed like it could never go down has entered its own bear market. Gold is off over 20% from its October 2012 high.

Passive strategies have fallen to the wayside of smart investing. For millions of Americans that are approaching retirement we are at a critical juncture. Simply picking up a few mutual funds and calling it a day no longer holds the weight it once did. Diversification is important, but the way we diversify is vital.  Correlation among asset classes is constantly changing, and while it may not be crucial to follow and actively trade equities, bonds, and commodities on a daily basis – understanding how markets work and what’s going on within a portfolio is paramount to having a successful retirement. The world has changed. The tax code is fluid and you need to be prepared in order to enjoy your life after work.

Joseph “Big Joe” Clark, whose column is published Sundays, is a certified financial planner. He can be reached at or 640-1524.

Text Only
  • underwood mug [Duplicate] [Duplicate] Scott Underwood: Headlines can capture imagination I'd just left the newspaper office one morning and was driving north on Jackson Street, when I stopped at a red light and glanced at the rearview mirror.

    July 28, 2014 1 Photo

  • Charo Boyd: 'My Social Security' simplifies your life So many people buzz through extremely busy and complicated schedules these days. A smartphone in one hand, a computer in front of you, and a digital task list that never seems to end. In addition, to complicate things just a little more, there’s another event you need to add to your list — National Simplify Your Life week.

    July 28, 2014

  • Maureen Hayden: 9/11 Commission chair scolds Congress for national security failures Retired Congressman Lee Hamilton has warned of the perils of political ideology, calling the body where he spent 34 years “noxiously partisan.” Now, he worries the divide is downright dangerous.

    July 27, 2014

  • Vaughan, Nancy mug [Duplicate] Nancy Vaughan: Fireworks and fireflies mean summer in full swing Hasn't July been a fabulous month? It began with multiple fireworks venues and parades and ends with fairs and football in full swing. We have been blessed with mild weather and if you haven't had to travel much outside of the county, roadwork has been minimal.

    July 26, 2014 1 Photo

  • Ken de la Bastide: City unions go without contracts for many years How Anderson deals with unions has changed dramatically over the years. In the past it would have been unheard of for union members to continue to work without a contract or an agreed upon deadline. But members of three unions that represent Anderson city employees have been working without a new contract agreement for up to seven years.

    July 26, 2014

  • Jim Bailey: Traveling by passenger train was a page from the past My wife doesn’t remember riding on a full-fledged passenger train as a baby. Our children have never ridden. It’s an experience rapidly going the way of the horse and buggy and the stagecoach throughout a nation now obsessed with jumbo jets and sport-utility vehicles.

    July 26, 2014

  • Howard Hewitt: When it comes to wines, small can be very good Repeating the familiar is an easy way to go through life as is taking the safe road. We all do that but find unexpected rewards when taking the path less traveled. That little bit of philosophy applies to visiting wine country.

    July 26, 2014

  • Maleah Stringer: Hats off to the staff at Animal Protection League I often talk about the wonderful volunteers and community support we have at the Animal Protection League. And that volunteers are every non-profits "life blood" this is true for the Animal Protection League as well.

    July 26, 2014

  • Clark, Big Joe mug 'Big Joe' Clark: Beat the market or meet your goals? True or not, my experience tells me that goals – especially when written down – undoubtedly serve as catalysts for success. However, danger arises when a goal does not properly focus on the long term result you expect.

    July 25, 2014 1 Photo

  • Verna Davis: Seek peace by turning from evil and doing good There's something we all want: peace. World peace. Family peace. Personal peace. We yearn for peace, a feeling of freedom from commotion and antagonism, of harmony in our relationships, of lack of strife or dissension. What would we do to have peace in our lives?

    July 25, 2014

Featured Ads
More Resources from The Herald Bulletin
AP Video
US Ready to Slap New Sanctions on Russia Kerry: Not Worried About Israeli Criticism Boater Rescued From Edge of Kentucky Dam Girl Struck by Plane on Florida Beach Dies Rodents Rampant in Gardens Around Louvre House to Vote on Slimmed-down Bill for Border Looming Demand Could Undercut Flight Safety Raw: 2 Shells Hit Fuel Tank at Gaza Power Plant Raw: Massive Explosions From Airstrikes in Gaza Giant Ketchup Bottle Water Tower Up for Sale Easier Nuclear Construction Promises Fall Short Kerry: Humanitarian Cease-fire Efforts Continue Raw: Corruption Trial Begins for Former Va Gov. The Carbon Trap: US Exports Global Warming Traditional African Dishes Teach Healthy Eating

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Helium debate
Front page

Do you plan to attend one of the public sessions about the Mounds Lake reservoir project?

Not sure yet
     View Results