Letters category: Letters
Breaking down the SECURE Act
In December, Congress passed a new bill called the Setting Every Community Up for Retirement Enhancement Act, aka the SECURE Act. Besides proving that Congress can make an acronym out of almost anything, the bill – which goes into effect on January 1, 20201 – makes some important changes to various rules on saving for retirement. Many of these changes are positive, in the sense that they should make it easier for people to save more for longer. However, the SECURE Act also eliminates a popular estate planning tactic that many Americans have used to help their family after they pass away.
To help you understand the SECURE Act and how it may affect your finances, we’ve written this special letter. There’s a lot to unpack here, so please take a few minutes to read about these changes. Most are fairly simple, actually, but if you have any questions or concerns, please let us know. Even though you are not a client of ours, remember that we are always available to help provide financial clarity. In our opinion, that’s one of the most important things any person can have.
In the meantime, we wish you and yours a Happy New Year! We hope the year 2020 is a great one!
Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Michael J. Hudock, Jr., CPM®
President and Founding Partner
Important Provisions of the SECURE Act
Before we dive in, understand, that the SECURE Act is over 20,000 words long. (And in fact, the Senate had to tuck it away in a much, much larger appropriations bill to pass it.) That means there isn’t room to cover every provision of the new law, and many won’t apply to you anyway. So, what follows is a brief overview of the major changes that could affect your finances.
Are you ready? Then take a deep breath as we go over…
Changes to the IRA “stretch” provisions2
For years, one of the most popular estate planning strategies was the use of Stretch IRAs. When a parent or grandparent dies, they can leave their IRA to their children, grandchildren, or other heirs. Under the old rules, these beneficiaries could take distributions from their inherited IRA based on their official life expectancy. This allowed them to “stretch out” the value of the IRA – and the tax advantages that come with it – for a longer period. For example, if a 50-year old with a life expectancy of 85 inherited her mother’s IRA, she could stretch out her distributions over the next 35 years.
Now, non-spousal beneficiaries who inherit an IRA in 2020 or beyond can no longer do this. Instead, inherited IRAs fall under the new “10-Year Rule”. This means that all the money in the IRA must be withdrawn by the end of the 10th year following the year of inheritance. At that point, the beneficiary must pay taxes on that money.
Note that the rule does not require the beneficiary to take withdrawals during the 10-year period if he or she doesn’t want to. That’s important! Deciding when to take withdrawals should be based on several factors, including the beneficiary’s current financial situation, how close they are to retirement, and when they plan on taking Social Security benefits.
Something else to note: The new 10-Year Rule does not apply to spouses, disabled and chronically ill beneficiaries, and minors. For the last group, the exception lasts until the child reaches the “age of majority”, which is 18 to 21 depending on the state. Once they reach that age, the 10-Year Rule kicks in.
Make no mistake: This new rule will have a profound impact on beneficiaries, especially those who are younger and could otherwise have waited decades before making withdrawals (and paying taxes on those withdrawals). For this reason, if you are either planning to bequeath an IRA to your beneficiaries, or are expecting to inherit one yourself, consider scheduling a consultation with us about your options. We want to do everything we can to help you and your heirs maximize your retirement savings while minimizing your tax burden.
Changes to Required Minimum Distributions for IRAs2
Speaking of maximizing your retirement savings…
Another change the bill makes is to lengthen the time people can contribute to their IRAs. Currently, retirees can only contribute to an IRA up to age 70½. Once they hit this milestone, they are required to begin making withdrawals. (These are called required minimum distributions, or RMDs.) Under the SECURE Act, that age would increase to 72. That means retirees have an additional 18 months to benefit from the tax advantages that come with IRAs.
Note: This change only applies to those who turn 70½ in 2020 or later. Even people who turned 70½ in December of 2019 would still have to take an RMD for 2020.
That’s it for this provision. See? We told you some of the changes were simple.
Other IRA Changes2
Here’s another simple change. Under the old rules, contributions to a traditional IRA were prohibited once a person reached the year they turned 70½. No longer. Now, anyone, even those older than 70½, can keep contributing to their IRA so long as they continue to work.
Here’s an example. Jane turns 70½ in 2020 but decides she wants to continue working. So rather than withdraw money from her IRA, she decides to make a tax-deductible contribution to it instead. While Jane must still take RMDs once she turns 72, she decides to keep making contributions every year until she actually retires, as the math still works in her favor.
Obviously, this change only benefits those who continue working into their seventies. And even then, it may not always make sense to keep contributing to your IRA. But it’s always nice to have options!
Another change is for new parents. Under current law, a person must be 59½ years old to make withdrawals from a traditional IRA. If they withdraw money earlier than that, they must pay a penalty of 10% on the amount you took out. There are a few exceptions, such as if they need the money to pay large medical bills, buy a home, or manage a disability. But, generally speaking, the government wants the money inside a retirement account to be saved for retirement.
Under the SECURE Act, new parents can now withdraw funds penalty-free to help cover birth and adoption expenses. This is especially helpful for younger parents who have high deductible insurance plans. There is a $5,000 cap on withdrawals, though, and they need to be made within one year of the birth or adoption.
Changes to 401(k)s2
The SECURE Act brings many changes to 401(k)s, but most are for businesses to worry about. There is one change you should know about, though, and it involves annuities.
A type of insurance product, many annuities offer a monthly stream of income, sometimes for life. This can make them attractive for retirees. Historically, few 401(k)s contained annuities. The SECURE Act makes it easier for employers to offer this as an option.
The reason we mention this is because you should get a second opinion before putting your money in an annuity. Choosing the right annuity can be difficult, as there are many types and features, and some annuities come with high costs. So, while an annuity may be right for some people, that doesn’t necessarily mean it’s right for you.
If you have questions about this, let’s chat! We’d be happy to provide you with a second opinion.
Changes 529 Plans2
For many Americans, paying off student loans is a difficult financial burden.
To help pay for their loved ones’ higher education, some parents and grandparents use 529 plans. Any funds invested in a 529 plan can be used to help pay for college expenses, like room and board or tuition. The best part is that the funds are exempt from federal taxes, and often state taxes, too, so long as they’re used solely for education expenses.
Under the SECURE Act, parents with 529 plans can make a tax-free withdrawal of up to $10,000 to help pay off their child’s student loans. This $10,000 limit is per person, not per plan, which means another $10,000 can be withdrawn to help pay the student debt for each of a 529 plan beneficiary’s siblings.
If you have invested in a 529 plan for a child or grandchild with lots of student debt to pay off, let’s talk to see if it makes sense to take advantage of this.
As you can see, the SECURE Act is loaded with changes and provisions for those saving for retirement. So, again, if you have any questions or concerns, please don’t hesitate to contact us for a free consultation!
In the meantime, remember that we’re here to help you work toward your financial goals. Please let us know if there’s ever anything we can do – in 2020 and beyond.
Happy New Year!
1 Anne Tergesen, “Congress Passes Sweeping Overhaul of Retirement System,” The Wall Street Journal, December 19, 2019. https://www.wsj.com/articles/senate-spending-bill-includes-significant-changes-to-u-s-retirement-system-11576780736
2 Text of “SETTING EVERY COMMUNITY UP FOR RETIREMENT ENHANCEMENT” (page 1532), Senate Appropriations Committee, December 16, 2019. https://www.appropriations.senate.gov/imo/media/doc/H1865PLT_44.PDF
Almost two-and-a-half centuries ago, fifty-six great Americans signed the Declaration of Independence. It was a document that would change the world, but after the Revolutionary War ended, it languished in relative obscurity for many years. In fact, to many, the Declaration was merely a simple letter that had served its purpose. A historical artifact and nothing more.
It wasn’t until Abraham Lincoln that the Declaration took its place as the cornerstone of American ideals. As a young prairie lawyer, Lincoln saw it as more than just a simple announcement of separation. To him, it was a statement of human rights. It was the foundation upon which the United States was built. Lincoln made it the core of his political vision, referencing it often in speeches and letters, most notably in the Gettysburg Address.
But it was five years earlier that Lincoln spoke some of the most powerful words ever uttered about our nation’s founding document.
In the summer of 1858, Lincoln gave a speech in Lewiston, Illinois. Concerned that people had forgotten what the Declaration said, he decided to remind them. Not many Americans know about this speech today. We had never heard of it until someone shared it with us. But after reading it, and thinking about it, we’re convinced there’s no better message we can share this Independence Day.
Here is an excerpt1 of what Lincoln said:
Lincoln on the Declaration of Independence
“My countrymen, if you have been taught doctrines [that] conflict with the great landmarks of the Declaration of Independence; if you have listened to suggestions which would take away from its grandeur and mutilate the fair symmetry of its proportions; if you have been inclined to believe that all men are not created equal in those inalienable rights enumerated in our charter of liberty, let me entreat you to come back. Return to the fountain whose waters spring close by the blood of the revolution. Think nothing of me – take no thought for the political fate of any man whomsoever – but come back to the truths that are in the Declaration of Independence. You may do anything with me you choose, if you will but heed these sacred principles.
The Declaration…was formed by the representatives of American liberty from thirteen States. These communities, by their representatives in old Independence Hall, said to the whole world of men:
We hold these truths to be self-evident: that all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness.
This was their majestic interpretation of the economy of the Universe. This was their lofty, wise, and noble understanding of the justice of the Creator to His creatures. Yes, gentlemen, to all His creatures, to the whole great family of man. In their enlightened belief, nothing stamped with the Divine image and likeness was sent into the world to be trodden on, and degraded, and imbruted by its fellows. They grasped not only the whole race of man then living, but they reached forward and seized upon the farthest posterity. They erected a beacon to guide their children, and their children’s children, and the countless myriads who should inhabit the earth in other ages.
Wise statesmen as they were, they knew the tendency of prosperity to breed tyrants, and so they established these great self-evident truths, that when in the distant future some man, some faction, some interest, should set up the doctrine that none but rich men, or none but white men, were entitled to life, liberty, and pursuit of happiness, their posterity might look up again to the Declaration of Independence and take courage to renew the battle which their fathers began – so that truth, justice, mercy, and all the humane and Christian virtues might not be extinguished from the land; so that no man would hereafter dare to limit and circumscribe the great principles on which the temple of liberty was being built.”
Lincoln, who was running for the Senate at the time, finished by saying that it didn’t matter which politician people voted for, or which party they belonged to. What mattered was upholding the ideals of the Declaration of Independence. “I charge you to drop every paltry and insignificant thought for any man’s success,” he said. “It is nothing. I am nothing. Judge Douglas [Lincoln’s rival] is nothing. But do not destroy that immortal emblem of Humanity – the Declaration of Independence.”
This July 4, we hope we all can take a moment to reflect on the meaning of the Declaration of Independence. It goes beyond politics and partisanship. It’s more than a historical artifact. It’s the foundation upon which our nation rests.
A nation we’re so grateful to call home.
From everyone here at Hudock Capital Group, LLC, we wish you a safe and happy Independence Day!
|Barbara B. Hudock, CIMA®, CPM®
Chief Executive Officer
|Michael J. Hudock, Jr., CPM®
President and Founding Partner
1 “Speech at Lewiston,” Collected Works of Abraham Lincoln, Volume 2.
Normandy. D-Day. Operation Overlord. The events of June 6, 1944 are known by many names, and have been commemorated in countless books, dramas, and documentaries. You’ve seen the pictures of GIs wading through rough, freezing water onto a murderous, mine-strewn beach. You’ve heard the stories of those who braved smoke and shell to scale the cliffs beyond. But most of the stories we hear were told by the survivors – the lucky ones who made it to the top and saw France on the other side.
What about the others?
As you know, Memorial Day is just around the corner. It’s a day for remembering those who didn’t make it. The ones who gave their lives so that others might live. And since this Memorial Day coincides with the 75th anniversary of Normandy, I think it’s an especially good opportunity to remember the men who couldn’t tell their stories afterwards.
Men like the soldiers of Able Company.
The First Wave
Picture it: Roughly two-hundred soldiers packed like sardines in tiny boats that sway with the choppy sea. This is Company A – “Able Company” – of the 116th Infantry Regiment. Most are in their early twenties and barely into manhood, yet men they are. Long before they land, they are already fighting fear and the worst seasickness any of them has ever known. If they lift their heads above the sides, they can see the imposing cliffs of Normandy in the distance – and the 200-yard beach they’ll have to cross just to get there. A beach that offers no shelter or protection.
But when the order comes – “This is it men, you’ve got a one-way ticket and this is the end of the line,” – they shoulder their packs and lift their weapons, ready to do their duty.1
Until everything starts going wrong.
First, water begins spilling over the sides of the boats, and many are swamped completely. Those that stay afloat do so only because the men of Able Company use their helmets to bail the water out. Other boats, hit by German artillery, catch fire and sink. The noise is deafening.
Then, at 6:36 A.M, the boat ramps are lowered, and it’s time.2
One by one, the men jump into the frigid ocean. They are not yet on the beach at all, but on a sandbar that stretches up to 100 yards out. To even get to the beach, they’ll have to wade through water that often comes up to their necks. Many soldiers, weighed down by heavy jackets, packs, and equipment, start to sink. Those who can’t shed the weight, drown. Those who can come up gasping for air – only to be greeted by a hail of bullets.
From the cliffs, German machine guns pepper the ocean, decimating Able Company before they even reach the shore. But still they advance. One pair of boots makes it to dry land. Then a second, and a third. They are the first wave, and they know what’s expected of them. What’s required. Despite fire and water, despite mine and mortar, they are the first liberators to step onto the shore.
The first free men to set foot on the beaches of France.
But in the meantime, they have more work to do. Medics do what they can for the wounded, pulling anyone who might still be alive from the ocean. Minutes pass. No one from Able Company has yet fired a shot, and almost every officer – the men who give commands, who know the plans and have studied the maps – is dead. The others, leaderless and bloodied, continue anyway. It’s no glorious charge, but a desperate crawl. Liberating France inch by inch, foot by foot.
Thirty minutes later, over half the Company is dead. Most of the survivors are wounded and exhausted. But still they continue. Those who fall lift their heads to shout encouragement one final time. For they are the first wave. This is their job, their mission, their calling. To pave the way for waves to come.
Finally, after an hour, the survivors make it across the sand to the bottom of the cliff. A few join a nearby group of Army Rangers and scale to the top. The others remain behind, holding the beach. Most will remain forever.
Behind them comes the second wave.
Seventy-Five Years Later
It may seem like Able Company’s sacrifice was futile. But I don’t think so. Every yard they gained was a yard the next wave wouldn’t have to. Every bullet they attracted was a bullet someone else was saved from. Theirs was the smallest of footholds, yet it was enough – for the next wave, and the one after. For what they did that morning led to everything that followed. By the afternoon, the beach was theirs. By evening, the cliffs were theirs.
And less than one year later, all of Europe was theirs.
History is often written down as the story of great leaders making grand speeches and grander plans. But in truth, history is made up of moments. Moments when normal men and women stared fear in the face and acted. Moments when men and women offered service and sacrifice. Moments that lasted the length of a heartbeat…and yet still affect our lives to this day.
This Memorial Day, I want to remember those men and women. I want to remember the beaches of Normandy. I want to remember the men of Able Company. I hope you can take a moment to remember them, too.
Barbara B. Hudock, CIMA®, CPM®
Chief Executive Officer
1 “The suicide wave,” The Guardian, June 1, 2003. https://www.theguardian.com/theobserver/2003/jun/01/features.magazine37
2 “First Wave at Omaha Beach,” The Atlantic, November 1960. https://www.theatlantic.com/magazine/archive/1960/11/first-wave-at-omaha-beach/303365/
The Origin of Mother’s Day
Did you know that there are more calls made on Mother’s Day than any other day of the year? It’s true! Across the US, phone companies deal with the highest volume of calls on Mother’s Day.1
As far as historians can tell, celebrating motherhood dates back to the Greeks and Romans. It is a tradition that has imbued our culture for millennia. And today the roots of this holiday intertwine with our own history.
The first record of Mother’s Day, as it is celebrated in the United States, dates back to an era just before the Civil War. Ann Reeves Jarvis began organizing Mothers’ Day Work Clubs to help young mothers care for their children. From child-rearing skills to hygiene to medications, these clubs provided all the basic essentials for new moms.
As rumblings of Civil War grew louder, the club’s purpose transitioned from supporting moms to maintaining friendship and unity at any cost. After all, many of the moms had sons on both sides of that war.
That bond saw them through the war. They nursed soldiers on both sides, offering their compassion, and ultimately saving the sons of countless mothers.
When the war finally ended, Ann re-christened the Work Clubs to “Mothers Friendship Day”, a celebration to heal the communities torn apart by this war.
When Ann passed in 1905, it was the second Sunday of May. Over the next several years, Ann’s daughter, Anna, worked to make that day in May one that all children would use to honor their mothers’ sacrifices. And in 1914, President Woodrow Wilson made it so.
Now, over a century later, we have perhaps forgotten the history of this day, but not its spirit.
So, in the spirit of friendship and compassion, I would like to wish you a wonderful Mother’s
Day from everyone here at Hudock Capital Group!
Barbara B. Hudock, CIMA®, CPM®
Chief Executive Officer
1 “Mother’s Day 2019”, History.com, February 5, 2019. https://www.history.com/topics/holidays/mothers-day
“We are now in a bear market – here’s what that means.”
– CNBC headline on December 24, 20181
“The stock market rally to start 2019 is one for the history books.”
– CNBC headline on February 22, 20192
If you’re like most people, it’s probably not uncommon for you to plan your day or week based on the weather forecast. For example, you might check the forecast, see that it’s supposed to be sunny, and decide to go fishing on Saturday.
But when Saturday rolls around, it starts to rain.
The frustration you’d feel is very similar to how investors and analysts often feel about the markets. The forecast says one thing – and then the opposite happens.
For example, let’s go back to the end of 2018. For months, the markets had been hammered by volatility. The Nasdaq entered bear market territory. Many pundits predicted even more volatility after the new year.
But four months later, the markets are on the verge of record highs.
So, the question is: Why the change in direction? What’s behind this year’s market rally? And most importantly, what can we learn from it?
The volatility that dominated the end of 2018 was largely due to fears of an economic slowdown. The Federal Reserve raised interest rates, which can cool both inflation and economic growth. Trade tensions with China showed no signs of stopping. Corporate earnings slowed down, oil prices had dropped, and several other indicators had many analysts predicting a recession in 2020 or 2021.
Even after the turn of the year, there was some interesting data that, when compared with historical trends, suggested more storms on the horizon. For example, you may have seen the term “inverted yield curve” bandied about in the media for a time. We’re venturing into “financial nerd” territory here, but this is when the yield on short-term Treasury bonds rises higher than the yield on long-term bonds. It doesn’t happen often, and historically, it has sometimes been a sign of an impending recession.
The result of all these signals was a forecast that had many investors reaching for their umbrellas, convinced that gloomy weather was here to stay.
But instead, the markets enjoyed their strongest start to a year since 1998.3
In many ways, this rally has been driven by something very simple: Nothing really got worse. The Federal Reserve has stopped raising interest rates, saying that it won’t raise them again in 2019.4 The trade war with China seems to have hit a lull. And now, investors can point to a host of different historical trends that work in their favor. For example, some data suggests that when the stock market rises 13% or more “during the first three months of a calendar year,” it will gain even more before the end of the year.3
So, does that mean the good times are here to stay?
Warren Buffett, the legendary investor, has a saying: “Be fearful when others are greedy and greedy when others are fearful.” While we shouldn’t take that maxim too literally, it does illustrate an important point. Time after time, conditions that cause fear can change in an instant, leaving the fearful behind. On the other hand, conditions that stoke greed can shift before you know it, giving the greedy a nasty shock.
On their website, CNN has something called the Fear & Greed Index.5 Using seven different indicators, they can calculate which emotion is driving the markets most at any given time. As of this writing, that emotion is greed. A few months ago, it was fear. As we’ve just seen, the scale can swing from end to another very quickly.
When you look more closely at the data, there are still reasons to think a recession is possible in the next year or two. (A contracting labor market, problems in Europe, stocks being valued too highly, to name just a few.) Other data suggests that the stock market’s current highs are overblown.6 But does this mean it’s time to run and hide? Nope! While data is very good at telling us what was and what is, it’s still unreliable at telling us what will be – at least as far as the markets are concerned. In fact, for as much grief as we give meteorologists for getting a forecast wrong, they do a much better job predicting the weather than experts do the markets!
Here’s what we can learn from all this
As your wealth partner, the reason I’m sending you this letter is because there are a few things I think we need to keep in mind as 2019 rolls on.
First, we need to remember to guard against recency bias. Recency bias is when people make the mistake of thinking what happened recently is what happens usually. It’s why investors tend to panic during market volatility or take on unnecessary risk during a market rally.
Second, remember that emotion is a good servant, but a bad master. Emotion helps us interact with other people. It makes experiences more memorable and life more colorful. But it can be come harmful if it drives our decisions. We should always strive to keep our own personal Fear & Greed Index from swinging too sharply one way or the other.
Finally, whether the markets go up, down, or sideways, you’ll probably hear about many different statistics, indicators, and historical trends that predict this, that, or the other thing. When you do, remember that correlation is not causation.
Correlation, as you probably know, is the measurement of how closely related two things are. In finance, we often find that many things tend to change in sync with one another. Asset classes, market sectors, you name it. It’s why we spend so much time looking at things like inverted yield curves – because they are often correlated with the health of the markets or economy.
But just because two things are correlated does not mean that one causes the other. (It’s why an inverted yield curve doesn’t always mean a recession is nigh.) All the indicators and historical trends you hear about in the news are important, and worth studying – but again, they only tell us what was or what is. Not what will be.
So, to sum up:
- -Just as we didn’t give in to fear when the markets were down, so too will we not give in to greed while the markets are up.
- -We will remember that sun today doesn’t protect against rain tomorrow, or vice versa.
Instead, we’ll make decisions as we’ve always done: by keeping your long-term goals foremost in our minds. In other words, we’re not working to help you go fishing just this weekend.
We’re working to help you go fishing any weekend you want. It’s why we work so hard to tailor an investment portfolio and strategy to fit your unique needs. As you know, we start with your life and plan your money around it. With our commitment to what gives you purpose, our focus on long-term results and our strategies to minimize volatility, Hudock Capital Group is here to help you live the life you’ve imagined.
As always, if you have any questions or concerns about the markets, please don’t hesitate to contact me. In the meantime, have a wonderful Spring!
Barbara B. Hudock, CIMA®, CPM®
Chief Executive Officer
- 1. “We are now in a bear market – here’s what that means,” CNBC, December 24, 2018. https://www.cnbc.com/2018/12/24/whats-a-bear-market-and-how-long-do-they-usually-last-.html
- 2. “The stock market rally is one for the history books,” CNBC, February 22, 2019. https://www.cnbc.com/2019/02/22/the-stock-market-rally-to-start-2019-is-one-for-the-history-books.html
- 3. “The Stock Market is Having Its Strongest Start in 21 Years,” Money, March 20, 2019. http://money.com/money/5639032/stock-market-strong-start/
- 4. “Fed holds line on rates, says no more hikes ahead this year,” CNBC, March 20, 2019. https://www.cnbc.com/2019/03/20/fed-leaves-rates-unchanged.html
- 5. “Fear and Greed Index,” CNN Money, accessed April 17, 2019. https://money.cnn.com/data/fear-and-greed/
- 6. “Dow, S&P 500 and Nasdaq near records but stock-market volumes are the lowest in months,” MarketWatch, April 18, 2019. https://www.marketwatch.com/story/why-stock-market-volumes-are-the-lowest-in-months-as-the-dow-sp-500-and-nasdaq-test-records-2019-04-17
March 12 is “National Girl Scout Day”, recognizing the date on which the Girl Scouts was founded in 1912. As a girl and young woman, I benefited from the many positive attributes of the Girl Scout program–making friendships, building confidence and learning life skills.
Among the many skills I learned were the beginnings of what would become a strong entrepreneurial spirit as I, like millions of others over the years, sold the iconic Girl Scout cookies. Learning basic transaction skills, taking responsibility for making my customers happy and applying the proceeds from my efforts toward a good cause are things that have lived with me, forming the basis for a lifelong entrepreneurial drive and informing the business philosophy that I continue to practice today. Thousands and thousands of girls are selling Girl Scout cookies this year, learning the same lessons I did—the only difference is that the cookies I sold cost only 23 cents per box!
As National Girl Scout Day is celebrated, I thought it would be appropriate to share with you a speech I gave in 2014 at a Gold Award Event. The Gold Award is the highest award a Girl Scout can achieve. I was honored to present these remarks at this event and continue to be inspired by the fine young women honored that day. I hope you enjoy reading them.
Whether you were a Girl Scout or know a Girl Scout, please join me in wishing the Girl Scouts a very happy birthday. And, if you have a chance, maybe buy a box of cookies or two.
Girl Scouts in the Heart of Pennsylvania
Gold Award Event
June 21, 2014
It is a delight for me to be here with you today. Having been blessed with the experience of being a Girl
Scout, I’m excited and honored to be part of this special Gold Award Event. I had no idea at the time how important the lessons I learned and the experiences I had as a Girl Scout were as a fantastic foundation and fertile ground for my later successes. You may very well have the same experience.
As I was preparing to be with you today, I wanted to say something that would make a difference in your life. I wanted to share ideas with you that you can take with you, that you’ll remember, that will come back to you and that will inspire you to continue to strive for excellence in your life – even when things don’t appear to be going your way.
I think that many of us “adults” and/or “parents” want so much to make it easier for you – but unfortunately, the only way you‐ or I ‐ grow, evolve, develop our own character is by making our own decisions and our own mistakes and that, my friends, is the nature of wisdom. Wisdom comes from learning from the mistakes you make. When I look back on the best lessons of my life, they usually involve situations that, at the time, seemed to be catastrophic challenges. One of the best things about
Girl Scouts is that it puts us in a position of having to make decisions, overcome challenges, experience failure AND success BEFORE going “out into the “real” world.” Knocking on doors, selling cookies and experiencing rejection prepared me well for the world of business.
John Luther Long said “Learn from the mistakes of others. You can never live long enough to make them all yourself.” Perhaps real wisdom is a blend of learning from your own mistakes AND the mistakes of others.
What did I learn from being a Girl Scout? What experiences did I have that formed such a great foundation for successes beyond my wildest dreams? It’s all right there in the Girl Scout Promise and in the Girl Scout Law:
Now, I know that you’ve said this thousands of times… but this time I want you to just listen to the words…
On my honor, I will try: to serve God and my country, to help people at all times, and to live by the Girl
I will do my best to be honest and fair, friendly and helpful, considerate and caring, courageous and strong, and responsible for what I say and do, and to respect myself and others, respect authority, use resources wisely, make the world a better place, and be a sister to every Girl Scout.
I want to share a personal story with you. When I graduated from college, I started as a secretary for
Merrill Lynch. I was shy and intimidated and so afraid that I was going to make a mistake or do something that would cause someone not to like me. I was SO intimidated that I actually dropped out of an assertiveness training class; I couldn’t even PRETEND to say no. After a few years at Merrill Lynch, one day, my manager called me into his office and closed the door. He said, “There’s someone who doesn’t like you.” I was mortified… my worst nightmare had come true. I said, oh my gosh, WHO??? He said, I don’t know, but someone doesn’t and you have to accept that. He said there are people who don’t like peaches even though they’re magnificent peaches. They may be banana lovers… so just be the best peach you can be and make sure you hang around peach lovers!!! That’s one of the most valuable lessons I’ve learned over the years… just be the best you can be at being you. When I started out as a Financial Advisor, it was largely a “man’s world.” There were very few women in the field. There are still very few women at the top of our field and I would encourage you to consider it. The world of financial planning and financial services is actually perfect for women… especially women who are willing to work hard and who want to make a tremendous difference in the lives of the people with whom they work ‐ clients as well as team members. My “secret mission” is that when clients and team members enter our doors, they are magically transported to a world that is kinder and gentler, warmer and friendlier, and where their dreams come true.
Remember that it is in serving others that we create joy and happiness for OURSELVES – and success comes as a byproduct. Focus on serving others and doing the best you can possibly do. You’ll be happier and you’ll be more successful. I want to offer you a challenge. I want you to pay close attention to the interactions you have in your life. When you shop somewhere, or when you go to an office, or call someone on the telephone, pay attention to HOW YOU FEEL when you leave. When you leave them, or hang up the phone, do you feel better? Do you feel worse? How do people feel after interacting with you? My son, and business partner, has a philosophy of life that he doesn’t want to come into contact with anyone that he doesn’t leave better than he found them. Think about that and the impact it has. Most of us, when we interact with someone, we’re thinking about what they can do for us and we’re wondering what they’re thinking of us. If, instead, we turn that around and think about how we can make them feel better and how we can improve their life, WHAT DO YOU THINK THE IMPACT WOULD BE FOR THEM AND FOR YOU? It doesn’t have to be elaborate, it can be a kind word, a smile – it can be a positive thought… just positively focus on the other person. Give Back. Get involved in your community and in your company. Participate. Create synergy and rapport. PAY IT FORWARD!!
And I guarantee you this. If you spend your life helping other people feel good about themselves and helping them get what they want, you’ll go further than you could ever imagine. And you’ll have more real friends than you could ever want. Right back to the Girl Scout law‐”to help people at all times.”
I can tell you that the successes I’ve had in my life have come directly from the same concepts that I’ve talked about and that are the core of the Girl Scout Promise and the Girl Scout Law.
Thank you very much. Congratulations on being awesome! I wish for each of you fabulous and infinite Success, Happiness, and Fulfillment.
Barbara B. Hudock, CIMA®, CPM®
Chief Executive Officer
Three Named to Council of Trustees
There has been a lot of market volatility in recent months.
Precautions are useless after a crisis!
You’re probably wondering what we mean. It’s simple. When’s the worst time to buy a home-security system? After a break-in. When’s the worst time to check your tire pressure? After you’ve already had a blowout. When’s the worst time to put your seatbelt on?
You get the idea.
It’s a fundamental fact of life, and it extends to your finances, too. We can’t say for sure when the next bear market will come – and the recent volatility is not necessarily an indication that a bear is just around the corner. What we can say, however, is that a bear market is inevitable, because the markets take hits just like everything else.
Whether the next bear market comes this year or next or much later, there’s only one thing to do about it, and that’s to have a plan.
As your financial advisors, one of our most important responsibilities is to help you do now what people in the future will wish they had done earlier. That includes preparing for more market volatility. The actions that we put into place earlier this year were geared toward lowering volatility within your portfolio. In doing so, we retained certain investments that are set for generating returns over the long term. For these kinds of investments, the volatility over time is a benefit as it allows us to take advantage of opportunities as they present themselves. A well balanced portfolio can help to both reduce volatility and take advantage of the opportunities volatility at times presents. This can be challenging to remember in the midst of market turbulence, but history proves it to be true over and over again.
Without a doubt, the last few months have been turbulent. It’s a reminder that volatility is simply an unfortunate fact of life. And like a thunderstorm on a day you hoped would be sunny, or road construction when you’re most in a hurry, volatility never comes at a good time.
Make no mistake, volatility is frustrating – and even a bit scary. After all, when we talk about your investments, your portfolio, we’re not talking about some abstract concept. This is your money. Your retirement savings. Your hard-earned future.
A few things:
First, we need to remember that volatility is normal. Knowing that it’s normal doesn’t make volatility fun.
But it should make volatility a little less scary.
The second thing to do is remember that we have a long-term plan in place – a plan in which volatility is already factored in. We’ve laid out a specific path to those goals – and the plan assumes there will be bumps, setbacks, and even a wrong turn or two along that path. It really is like driving a car, if you think about it. Smart drivers give themselves extra time to reach their destination, so when they hit the inevitable detour or traffic jam, it doesn’t ruin their journey.
That’s what we’ve tried to do with your finances. Volatility – even prolonged volatility – is a detour, not a derailment.
The third thing to remember is our team is constantly monitoring your portfolio. We’re not forecasters, trying to predict which way the markets will go next, because that’s a fool’s errand. Drivers who do that often end up going in circles. Instead, we watch your progress in real time, always asking if what’s happening now necessitates a course correction or not. Day-to-day swings in the markets rarely do, just like a pothole in the street doesn’t make you choose a different road. But should the road ever get too bumpy – bumpier than your portfolio can handle – we’re prepared to make changes and find a smoother route.
Which brings us to the final thing you should do: Enjoy your holidays! Spend time with family. Go caroling. Argue about where to place the holiday decorations this year. Do all the things you’d rather be doing this time of year. After all, it’s those things that really count.
There is no doubt, the markets are challenging right now. But here’s what we can say: Don’t stress about it.
That’s our job.
We will keep monitoring the markets – and your portfolio – every single day. If we need to make any changes, we will. In the meantime, you concentrate on what really matters. Family. Friends. Spreading Goodwill and Cheer. And remember that if you have any questions or concerns, at any time, that’s why we’re here – call us.
From all of us here at Hudock Capital Group, we wish you all the best for a wonderful holiday season!
Barbara B. Hudock, CIMA®, CPM®
Chief Executive Officer
Michael J. Hudock, Jr., CPM®
President and Founding Partner
Thanksgiving has always been about being thankful for what we have. Even before it was declared an official U.S. holiday, it was a centuries-old tradition to have a feast celebrating a good harvest, a victory in battle, or some other momentous occasion.
The custom of celebratory feasts is almost as old as civilization itself. Yet the idea of “Thanksgiving” is still as important as ever.
Giving thanks for what we have – for whatever good fortune we’ve enjoyed this year – helps strengthen our resolve to deal with today’s challenges and confidently face tomorrow’s trials. I think that’s why Thanksgiving has evolved from being a celebration of a good harvest into something much more important.
It’s a celebration of life.
As we celebrate life at Thanksgiving, we do so with a spirit of gratitude and compassion. We do so by remembering those who may be less fortunate than us. We may volunteer at food banks, make donations to charity, or call or visit those who may be lonely or in need of a kind word. Regardless of the form of expression, we know that giving thanks means letting others know we care.
So, this Thanksgiving, please join with me in looking back on our good fortune and extending a helping hand to others. Join me in a spirit of gratitude for all of our many blessings, including those yet to come. Join me in giving thanks that we have each other to build a world that makes almost every year better than the one before.
On behalf of all of us here at Hudock Capital, we are thankful for you and your friendship and we wish you a very Happy Thanksgiving!
Barbara B. Hudock, CIMA®, CPM®
Chief Executive Officer
Michael J.Hudock, Jr., CPM®
President and Founding Partner