Windsor Wealth Management LLC

Investment service in Topsfield, Massachusetts

Investing Philosophy

Markets Don’t Send Invitations When the Best Days Arrive

by

One of the most valuable things you can have during uncertain markets is perspective.

Yet when headlines intensify, it’s only human to consider moving to cash until things settle down. This feeling is often magnified if you’re approaching retirement or have recently transitioned into it.

The challenge?

Markets don’t send invitations when the best days arrive.

In fact, some of the biggest gains usually happen right when things feel the most uncertain.

Fidelity shared a chart that illustrates this clearly:

Imagine a $10,000 investment in the S&P 500 back in 1988. That initial amount surpasses $522,000 by 2024, provided you never walked away.

However, missing just the five best market days over that same 37-year period slashes the ending value by roughly 37%.

Find the chart sources and specifications at Fidelity.com1

These few great days are nearly impossible to predict.

What’s more, they often occur shortly after a decline.

Key Goal

Ultimately, our goal is to help you have the resources to live your best retirement life, exactly how you’ve pictured it. Sticking to a disciplined, long-term strategy instead of reacting to headlines is a key component.

For more context behind these numbers, Fidelity breaks it down in this article: 6 reasons why you should consider investing right now.

Reach out with any questions.

–David Bunker, Financial Advisor & Licensed Fiduciary

P.S. In case you missed it, I recently shared my perspectives on the Middle East conflict and what it could mean for your portfolio. Read the post.

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

Source:

1. Fidelity.com, 6 reasons why you should consider investing right now, https://www.fidelity.com/learning-center/wealth-management-insights/reasons-to-invest-now

Investing Perspectives Regarding the Middle East Conflict

by

While we don’t comment on every geopolitical event, I’m connecting with you now given the scale of recent headlines.

I first want to recognize the deep human cost of these events; our thoughts are with the families and communities personally impacted.

During times of global unrest, I believe the best way I can support you is by providing the perspective needed to navigate these headlines and their relationship to your financial goals.

Therefore, here are a few key points to keep in mind:

Perspective Over Sensationalism

We know that geopolitical uncertainty causes market fluctuations, but your portfolio is specifically constructed to help absorb these shocks.

For perspective, the market is down only about 2% from its January high.

It’s important to remember that while media sensationalism drives clicks and views, it rarely reflects the reality of your portfolio.

Historical Market Resilience

Historically, geopolitical events don’t impact the markets long term.

In fact, the chart below illustrates how common unprecedented uncertainty truly is.

Whether it was the Cuban Missile Crisis in 1962, the Arab Oil Embargo in 1973, or the 9/11 attacks in 2001, each of these events felt like a permanent turning point for the world and the markets.

However, as the blue line demonstrates, the S&P 500 has a remarkable track record of moving through these shocks.

The Recovery Timeline: What History Tells Us

While every global crisis is unique, history shows a consistent pattern in how the S&P 500 processes shock.

According to LPL Financial research, dramatic world events tend to trigger market declines that are notable, but rarely catastrophic.

Since 1941, the average market reaction looks like this:

Initial Shock: The average one-day decline is 1%.

The Bottom: Markets typically find a floor within about 18 days.

The Recovery: Pre-event levels are usually restored in under 39 days.1

[RESOURCE]: See the “math” for yourself. In this LPL Financial research report, Iran Escalation: How Markets Have Reacted to Geopolitical Events, you’ll find a breakdown of 25+ major world events and the number of days it took for the market to recover from each.

Navigating Current Risks: Energy Costs

While history is on our side, we remain focused on a key economic risk: a prolonged conflict that keeps oil prices elevated.

Since energy impacts everything from manufacturing to shipping costs, these ripples can affect the broader economy.

However, there’s a small silver lining: the U.S. economy demonstrates far more resilience to energy shocks than in decades past. In the 1970s, energy costs accounted for nearly 10% of household disposable income. Today, it’s closer to 4%.

Also, the U.S. has transitioned from a dependent importer to a net exporter of energy, meaning our economy is no longer solely at the mercy of foreign supply.

Our Strategy: Discipline Over Reaction

Beyond daily portfolio oversight, we also leverage real-time briefings from Fidelity’s senior investment strategists. This collaboration helps us strengthen your strategy and prioritize your long-term goals over short-term market noise.

While geopolitical shocks often feel urgent, history shows that asset prices generally revert to their long-term trends. In fact, the S&P 500 has historically been higher one year after a major military shock 73% of the time, with a median gain of 9.7%.2

We recognize that “waiting it out” is incredibly challenging. It’s human nature to want to take action during volatility.

However, the most effective action is often disciplined patience. Rather than making premature adjustments, we believe the best path forward is to allow the strategy we’ve built to do its work.

Moving Forward

We’re watching the data closely so you don’t have to.

What’s more, our door is always open if you have questions or want to check in on your progress.

Please reach out—we’re here to help you stay focused and on track toward your goals.

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

Sources:

1: LPL.com, Iran Escalation: How Markets Have Reacted to Geopolitical Events, https://www.lpl.com/research/blog/iran-escalation-how-markets-have-reacted-to-geopolitical-events.html

2: HartfordFunds.com, Military Conflicts May Rattle Markets, But Not for Long, https://www.hartfordfunds.com/dam/en/docs/pub/whitepapers/CCWP114.pdf

The 3-Year “Buffer Strategy” for Portfolios

by

When reviewing retirement projections, it’s easy to focus on average annual returns.

In reality, retirement outcomes are shaped less by averages and more by the timing of these returns—a concept known as sequence of returns risk.

EXAMPLE: How Identical Savings Lead to Different Futures

The chart below shows two couples, each starting retirement with $2.5 million and withdrawing $100,000 per year. Over 25 years, they earn the same average return.

The difference, however, is the order in which these returns occur:

Couple A: Experiences a market downturn in the first years of retirement.

Couple B: Experiences the same downturn much later.

A market downturn hits harder when you’ve just retired.

When withdrawals coincide with losses, you’re forced to sell more assets to generate the same income. This shrinks your portfolio and reduces its ability to recover because you have less capital working for you when the market rebounds.

Conversely, declines occurring later in retirement are often easier to absorb.

At this stage, your portfolio has already done the “heavy lifting,” plus it’s continued to grow, creating a financial buffer that helps your savings survive future market turbulence.

Finally, by the time a later downturn hits, your portfolio doesn’t need to support as many future years of income.

Same average returns. Very different outcomes.

RELATED: In case you missed it, we published a new post: How to Make the Decision to Retire. Market behavior is one of several key factors to consider.

Managing Sequence of Returns Risk

Windsor Wealth Management helps you address this risk by setting aside two to four years of income in a conservative investment account. This “buffer” remains stable while still providing modest growth.

It allows retirement spending to continue uninterrupted during market downturns, giving the rest of your portfolio time to recover.

For Example:

If your annual spending is $90,000, we may earmark $270,000 to cover the first three years of retirement.

This upfront reserve helps protect your lifestyle by reducing the need to sell investments when markets are volatile.

Key Action: It’s critical to plan for the “when” of your retirement to help ensure there’s enough time to set these funds aside. (Ready to retire? Reach out as soon as possible.)

Generally speaking, average returns don’t retire people.

Cash flow timing does.

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

A Key Trend Worth Watching & Your Portfolio

by

There’s been no shortage of noise lately about an “AI bubble.”

Yet, the data suggests we’re seeing a structural shift in how the economy operates—driven by steady, long-term investments rather than speculation.

As the chart below shows, technology and R&D spending as a share of the U.S. economy is now higher than it was during the dot-com era, currently led by massive investments in AI infrastructure.

However, unlike the 90s, today’s tech leaders are backed by robust earnings and significant cash reserves—capital that’s available for acquisitions, stock buybacks and weathering downturns without needing to raise outside funding.

Chart Source: Capital Group1

Who will win? A key trend to watch.

All this spending begs the question: how does this build-out translate into shareholder returns?

While current winners include the companies building data centers and power grids that supply the computing power AI requires, history suggests the biggest beneficiaries may not even exist yet.

Just as the internet reaching critical mass enabled companies like Facebook (Meta) and PayPal, today’s AI infrastructure build-out is setting the stage for a new generation of high-growth businesses.

So who will they be?

That’s the key question—and only time will tell.

In the meantime, we’re focused on data and research—tracking where investment, earnings and innovation are converging.

You can read more about this concept and the data behind it in Capital Group’s article, 4 charts on why the U.S. economy could stay resilient.2

Your Portfolio: Rebalancing Is Critical During Aggressive Growth

One of our core disciplines during periods of strong growth is frequent rebalancing.

Specifically, trimming positions and taking profits when portfolios drift out of alignment, rather than chasing what’s already run up.

As always, our focus remains the same: staying invested, staying balanced and keeping your long-term plan on track—regardless of the headlines.

Final Thought

It’s important to remember that roughly $7.5 trillion is sitting in money market funds and cash equivalents waiting to be invested.

This sidelined capital adds a significant layer of economic stability, especially during times of loud “AI bubble” noise.

If you’d like to talk through how this trend fits into your portfolio, reach out anytime.

Happy Holidays,

–David Bunker, Financial Advisor & Licensed Fiduciary

P.S. — I recently spent some time analyzing the year ahead. If you’re curious about what’s coming next, you can find my breakdown here: Rate Cuts, Jobs and Growth: A Look at 2026.

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

Source:

1 & 2: Capital Group, 4 charts on why the U.S. economy could stay resilient, https://www.capitalgroup.com/ria/insights/articles/4-charts-us-economy-resilient.html

Is market news scaring you? Here’s the bigger picture.

by

Could the financial news headlines be more daunting?

Trade uncertainty and its economic ripple effects are behind most of these headlines. (Read our post for the “real” impact of tariffs.)

However, a crucial point often absent in media coverage is the historical link between market volatility and long-term portfolio growth.

For Example:

The below chart depicts the growth of one dollar from 1926 till 2024. The red lines highlight 20%+ market drops.

As you’ll see, time after time the market bounces back—even higher.

Your Financial Plan

We’ve built your financial plan to navigate market volatility.

Candidly, if you want long-term portfolio growth, then the price you pay is short-term volatility.

Unsurprisingly, we’ve seen this recent volatility before, i.e., during Covid. And, we bounced back from that—even higher!

Uncertainty drives volatility.

No one knows when the volatility will end. Nevertheless, we’re confidently buying valuable companies on sale.

I encourage you to stay the course and maintain your financial plan.

Reach out with any concerns or questions.

–David Bunker, Financial Advisor & Licensed Fiduciary

P.S. Thank you to everyone who requested a copy of Bill Perkins’ “Die With Zero.” I was thrilled by the response following last month’s email, How To Spend Confidently & Without Regret in Retirement, where we discussed the book. I still have a few copies available, so please let me know if you’d like one.

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

Our Response to Recent Market Volatility

by

The stock market’s recent volatility can feel unsettling, but we remain confident in our strategy.

That said, it’s natural to feel rattled—or even tempted to move to cash—when markets drop, especially with the media constantly promoting this approach during market swings.

However, history shows that some of the best market days happen right after the worst ones.

As an example, see the chart below highlighting: Staying invested yields a 10.4% gain, while missing the 60 best days results in a -3.7% loss.

When Visibility Is Low, Strategy Matters More Than Ever

Background

The stock market has been volatile the past few days, down about 8.2% from a recent high in early February.

For perspective, the market dropped 8.5% between July 16 and its low on August 5, 2024, but rebounded by August 30, surpassing its July 16 level.

In general, market recoveries tend to be quick. The average time to recovery is three months from a 5%-10% downturn and eight months from a 10%-20% correction, according to Invesco research.

Let’s take a look at two key factors causing the current fluctuations:

#1—Tariffs

President Trump recently imposed new tariffs on Canada, Mexico and China, escalating trade tensions and contributing to market uncertainty. After a 30-day pause, he implemented 25% duties on Canadian and Mexican imports, along with a second round of 10% duties on Chinese goods, bringing total tariffs on China to 20%. (Then, just two days after, Trump issued some exemptions for Mexico and Canada goods. The situation is highly fluid.)

The media often frames this as a “trade war” or even an “act of war,” but we urge you not to get caught up in the rhetoric.

FACTS: Clarifying Misconceptions & Highlighting Opportunity

Tariffs existed well before income taxes in the U.S.

In fact, they were the primary source of federal revenue for much of U.S. history before the income tax was introduced in 1913.

While tariffs continue to generate revenue today, they’re a very small portion of the federal budget compared to income taxes. (To learn just how small, read our post: The Economy, Tariffs & Consumer Sentiment.)

This historical perspective can help put recent tariff activity in context, i.e., rather than viewing them as unprecedented or catastrophic, it’s helpful to remember that tariffs have long been an economic policy tool.

Tariff activity may cause short-term market fluctuations. However, it’s not inherently a signal of economic collapse—despite media hype.

Finally, past volatility—whatever the cause (e.g., inflation, pandemic, tariffs, war, etc.)—has been an opportunity to buy great companies at a discount.

#2—Broad Economic Uncertainty

There’s a general sense of economic uncertainty driven by multiple factors, including geopolitical tensions, inflation concerns, interest rate policies and the new administration’s actions.

In just the last few weeks, Trump has signed nearly 100 executive orders targeting key areas, e.g., immigration, energy, federal workforce policies, trade, etc.

This activity and uncertainty fuels market fluctuations as investors react to shifting economic conditions. Markets tend to be sensitive to uncertainty, and volatility often follows when investors struggle to predict how these factors will play out.

Our Recommendations

Keeping a long-term perspective can help ease concerns about volatility and uncertainty.

In fact, staying invested through the ups and downs is key to long-term success.

Keep in mind:

-Each day, we rebalance 20 to 30 client portfolios to help maintain diversification and manage volatility. We also ensure your portfolio has the right mix of cash and bonds to navigate market fluctuations. Every decision is tailored to your unique risk tolerance and retirement timeline.

-Market swings often present opportunities, and have historically been an opportunity to buy good companies on sale.

Maintain Your Long-Term Financial Plan (Chart)

As we mentioned earlier, it’s natural to feel the urge to move to cash when markets drop. But doing so could mean missing out on some of the best market rebounds.

Consider these market facts from the below chart covering 1/3/05-12/31/24:

  • Seven of the 10 best days occurred within two weeks of the 10 worst days.
  • Six of the seven best days happened right after the worst days.
  • The second-worst day of 2020 (March 12) was immediately followed by the second-best day of the year.

Market downturns are often followed by strong recoveries. Staying invested helps ensure you don’t miss those critical days.

Of course, no one knows the future—but history offers a clear lesson.

Reach out with any questions.

–David Bunker, Financial Advisor & Licensed Fiduciary

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

This communication was prepared with financial writer Sharron Senter’s assistance, based on interviews with David Bunker, a financial advisor and licensed fiduciary.

Capitalizing on Market Peaks, Investing in High Markets

by

As of 9/4/24, the S&P 500 has hit 33 new all-time highs this year, which may leave some wondering if it’s too late to invest.

While the market may seem overvalued, historical data tells a different story…

Consider this chart showing the S&P 500’s rising highs over time:

While the chart reflects periods of volatility and temporary downturns, the long-term trend is characterized by a series of higher highs.

Recent upward trends have been fueled by economic growth, technological advancements—especially in AI—rising corporate profits and strong consumer spending.

Remember, if we wait for the market to decline before investing, we’d be engaging in market timing, which we avoid since it’s nearly impossible to consistently predict short-term market movements.

Related: Understand the stock market’s seasonality, read last month’s client letter: Stock Market Seasonality and the September Effect.

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.

Q2 Stock Market Results, Job Creation Cooling, Rate Cut Likely

by

It’s hard to believe it’s already August.

Where does the time go?!

We hope you’re enjoying a healthy and relaxing summer.

Acadia National Park
Acadia National Park
Photo by Peregrine Photography

Today, we’re discussing:

– Last quarter’s stock market results.

– Factors driving market movements.

– Noticeable slowdown in new jobs.

– Reasons for the early August market correction.

– Potential September interest rate cut.

– Changes we’re making to your portfolio.

Q2 Stock Market Results

The market performed well last quarter.

From January through June, it saw an overall increase of about 15%, with Q2 contributing 4.25% of this growth.

The Magnificent 7 (Apple, Microsoft, Amazon, Nvidia (computer component manufacturer), Tesla, Alphabet (Google) and Meta (Facebook/Instagram/Threads) continue to drive the market’s growth.

However, in the past several days the tech giants are down roughly 20% compared to the overall market.

Why?

Because they’re overvalued.

The other 493 stocks in the S&P 500 are generally performing well. While they haven’t seen the 100%+ gains like the Magnificent 7, their steady performance is a positive sign, reinforcing the benefits of diversification.

Recent Development

A new trend we’re seeing is the sell-off of tech stocks.

Investors are rebalancing by taking profits from these stocks and shifting their investments to more stable, dividend-producing stocks.

Berkshire Hathaway Sold 50% of Its Apple Shares

Speaking of selling tech stocks, Warren Buffett, chairman and CEO of Berkshire Hathaway, supported the sale of roughly 50% of the firm’s Apple stake since the start of the year. Keep in mind, the firm still owns about 400 million shares of Apple stock!

What’s driving the tech selling?

A few things are likely: economic caution, profit taking and maneuvers spurred by the recent jobs report.

July 2024 Jobs Report

According to the Bureau of Labor Statistics (BLS), the U.S. economy added 114,000 jobs in July, a noticeable slowdown from June’s 206,000 jobs.

The unemployment rate also rose to 4.3% in July from 4.1% in June.

Unemployment Rates at a Glance (Last 20 Years)

Job Creation Is Cooling Unemployment Trends
Explore more unemployment factors here, including unemployment by age and education.

Another Interesting Fact From the BLS Jobs Report:

The number of people employed part time for economic reasons rose by 346,000 to 4.6 million in July.

These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

Suffice it to say, the labor market is cooling some. Also, much of the recent job creation is government and health care jobs.

Early August Stock Market Activity

August started with a market correction.

Interestingly, 94% of years have a decline of 5% or worse (see chart). Said differently, the U.S. stock market experiences a correction almost every year.

By definition, a market drop of 10% is considered a correction, while a drop of 20% signals a bear market, the latter occurring about every four years.

Even with the correction, we’re still up about 13% on the year.

Remember, the stock market dislikes uncertainty—the jobs report, upcoming elections, recession rumors and geopolitical turmoil (Iran-Israel tensions) often cause market movements in every direction.

Will the Fed Cut Interest Rates This September?

It’s likely they will, as well as in November and December. Given the recent jobs report and signs of economic slowing, there’s increasing pressure on the Fed to cut rates.

Keep in mind, the Fed’s focus is managing inflation and maintaining full employment. In general, they’re not supposed to care about the stock market.

Your Portfolio

We’re focused on balancing portfolios.

Recently, portfolios have become overweighted in tech stocks due to the sector’s rapid growth over the past few months.

It’s time to take some profits.

After extensive financial modeling, we’re also pulling out of the Vanguard Health Index (VHT). While it’s been one of our favorite investments, it’s now causing health care to be overweighted in portfolios as other funds have added more health care stocks to their mix.

Before You Go

Get help optimizing your retirement income. Download our FREE “Prolonging Retirement Income” checklist.

Also, receive help retiring to the life you want, schedule a complimentary financial planning consultation.