Illumination’s January 2016 Insights for the New Year

January 11, 2016
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A lot happened in 2015 in all of our financial lives: career changes, retirement, new children, marriage, new homes. Beyond that, the U.S. stock market experienced a correction which we haven’t seen in a while, and the Fed increased interest rates for the first time in a decade.

Any real financial advisor will create a plan for you that addresses these and any other financial life events that you may experience in your lifetime. With a plan, you will know how to live your best financial life today, in the future, and even during times of change.

In this edition:

  • Matt Rinkey on The American Dream
  • Illuminating Our Core Values: Put Clients First, Always In All Ways
  • 2015 Market Scoreboard: Our Insights

Matt Rinkey on The American Dream

Matt Rinkey was on The American Dream TV show to talk about how to the recent Federal Reserve Board interest rate increase may affect your portfolio and overall financial life. Matt discusses how the pace of interest rates hikes affect the stock market and what you can do to protect your investment portfolio in a rising interest rate environment. Watch The American Dream Saturday mornings at 10am on Cox & Time Warner channel 4.


Put Clients First, Always In All Ways

At Illumination Wealth, we work under a set of core values that drive every decision we make about how we serve our clients. We believe it is important that we share these core values with you, and you will be learning about a core value of ours each month.

Put Clients First, Always in All Ways

Putting clients first, means looking out for their best interests. It means we make them a priority. Our recommendations have an effect on how they will be able to live their lives in the future and today. We know our clients trust us to help them make important financial decisions that have a significant impact on their lives. So it’s important that we put the client’s interests first, even above our own interests. This act of putting the client’s interests first is known as the fiduciary standard.  We do not see this as a legal requirement, but as a moral responsibility.

If you don’t have a financial advisor, it’s important that you select one that is a fiduciary, someone that will prioritize your interests above their interests. You want a financial advisor who is giving you advice that is best for you, even if it means they don’t benefit from that advice. This is a core value at Illumination Wealth and one that drives each recommendation we give to our clients.


2015 Market Scoreboard: Our Insights

2015 was a volatile year for most asset classes and many ended the year with a loss.

2015 Market Scoreboard

2015 Market Scoreboard

There are some key points you should take away from the performance of investment markets in 2015.

A few stocks can cloud the performance of the overall market.

While U.S. large cap stocks had a small loss for 2015, the broader U.S. stock market experienced a more significant 6.9% loss and the median stock of the Russell 3000 (98% of the US stock market) finished 20% off its high. A few stocks like Facebook, Netflix, Google, and Amazon helped buoy the overall market with their out-sized gains and weighting in the indices.

Even investment management gurus and fund managers are not immune to market declines.

The Mutual Fund Observer noted that the average hedge fund was down 4%, Warren Buffet’s Berkshire Hathaway declined 11.5%, the top brass of head fund managers are explaining 10-25% losses to their shareholders, and some prominent funds even decided to close down.

Markets are increasingly affected by global influences.

How many times did you hear that the US stock market is down because of fears about China? As global commerce becomes more and more integrated and companies continue to do business globally, we will see more influence of one foreign market on another.

Diversification of your portfolio across multiple asset classes can reduce the volatility of your investment portfolio.

William Bernstein, one of my favorite investors and authors has said that: “Diversification among different kinds of asset classes works well over the years and decades, but often quite poorly over weeks and months. Investors who can earn an 8 percent annualized return will multiply their wealth tenfold over the course of 30 years! If they have half a brain, they will care little that many days, or even years, along the way their portfolios will suffer significant losses.”

Markets are volatile and unpredictable.

Knee-jerk reactions to short-term market adjustments can wreak havoc on your overall returns. Develop a sound short- and long-term investment plan that you can stick to through good and bad times.


Investing isn’t about beating others at their game. It’s about controlling yourself at your own game. – Benjamin Graham

So what will 2016 bring? Will we celebrate a “Sweet 16”, or will we have another year dealing with a volatile teenager, or maybe some of each. No one knows for sure. What has worked in the past, will likely work in the future. That is, keeping a long term horizon and plan, focusing on the things you can control in your personal economy, and continuing to invest in both your financial future and yourself. Illumination Wealth will be here to guide you along the way.

All the best,

The Illumination Wealth Team

The opinions and forecasts expressed are those of Matt Rinkey, President of Illumination Wealth Management (IWM) and may not actually come to pass. Mr. Rinkey’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security or Illumination Wealth services. No part of this material is intended as an investment recommendation. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any of IWM’s services. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that investment objectives outlined will actually come to pass. Investors should consult an Investment Professional before investing in any investment program. Neither Mr. Rinkey or Illumination Wealth nor any of their employees shall have any liability for any loss sustained by anyone who has relied on the information contained herein. Entities including, but not limited to IWM, its officers, directors, employees, customers and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. The analysis contained is based on both technical and fundamental research. Although the information contain is derived from sources which are believed to be reliable, they cannot be guaranteed. Past performance is never a guarantee of future results.