This post has the potential to be confusing, especially for newer readers. So let me begin by saying that if you don’t know what the term "annual seasonality" means, you can safely ignore everything written below. You don’t need to read the rest of this article.

__For those of you who do know about annual seasonality, the fall signal to buy has been triggered.__

I’m going to repeat some background about annual seasonality, then turn to the specifics of this particular signal. (If annual seasonality and MACD are old hat to you, skip down to the “This Year’s Signal” heading below.)

__Annual seasonality background__

As this old *[Introduction to Annual Seasonality](https://www.soundmindinvesting.com/articles/view/introduction-to-annual-seasonality) *article explains, the stock market has historically performed much better on average between November and April than between May and October. This is, of course, an average based on many years of observation, and any specific year can vary dramatically from that long-term trend. But it is a pattern that has persisted long enough, and across global markets as well as here in the U.S., so as to have attracted quite a bit of attention over the past few decades.

The basic idea of annual seasonality, then, is to sell stocks at the end of April and buy back in at the end of October. Taking this idea a step further, some researchers have shown that using a short-term timing signal, called MACD (Moving Average Convergence/Divergence), to fine-tune the *exact* buying and selling dates boosts the overall returns of utilizing the annual seasonality idea dramatically. SMI has been tracking this approach for the past 15-20 years, as explained in our 2014 article, *[Adding MACD to Seasonality](https://www.soundmindinvesting.com/articles/view/adding-macd-to-seasonality)*. This MACD signal is the buy signal that was just triggered.

It’s important to point out that annual seasonality has always been an *optional refinement* to SMI’s strategies. Most SMI readers have __not__ utilized annual seasonality in building their long-term investment plans.

__Recent developments__

Crucially, it’s important to note two significant developments in recent years that have led us to *significantly downplay* the importance of these annual seasonality signals.

First, our investigation of the [impact of the election cycle on annual seasonality](https://www.soundmindinvesting.com/articles/view/protecting-your-portfolio-against-an-unfavorable-election-cycle) found that there is actually only one *unfavorable period* (out of a total of four May-October periods) *during which stocks have, on average, lost money. *That is the May-October period leading up to the U.S. mid-term elections (most recently the six-month period that ended October 2022).

There’s also only one favorable period (out of four November-April periods) *that is substantially better than the others* (though the favorable periods of all four years have done well). This unusually favorable period is the six months immediately after the mid-term elections (the favorable period that began in November 2022).

Translation: Based on annual seasonality, as viewed through this election cycle lens, there’s really only one six-month period out of every four years when you’d want to do anything *other* than own stocks. Given that, even those who want to apply annual seasonality as part of their investing plan would have a compelling case to alter their base asset allocation only during the unfavorable period of each mid-term election year (and possibly the following favorable period — see the charts in the previous link which show this quite vividly).

The second significant development, and another reason to question the value of continuing to apply annual seasonality signals, stems from our [Dynamic Asset Allocation](https://www.soundmindinvesting.com/articles/view/dynamic-asset-allocation-an-investing-strategy-for-the-risk-averse) research. DAA already has a timing element built into it that triggers changes among six asset classes at any time during the year, irrespective of the annual seasonality cycle. Put bluntly, DAA has done a better job of determining when to increase and decrease a portfolio’s allocation to stocks than annual seasonality has.

When comparing owning stocks while applying annual seasonality vs. simply owning stocks year-round, it’s easy to make an argument in favor of incorporating the annual seasonality modification. However, when comparing the relatively blunt-instrument approach of seasonality to the more specific signals generated by Dynamic Asset Allocation (as well as Upgrading's defensive protocols), the results aren’t even close. Dynamic Asset Allocation has provided much better signals than annual seasonality regarding when to be invested in stocks and when to be out of them.

In some respects, this is an unfair comparison. Annual seasonality was never held out as a finely honed scalpel. It’s a blunt, simple device to improve on buy-and-hold stock market investing. DAA and [Upgrading 2.0](https://soundmindinvesting.com/articles/smis-fund-upgrading-strategy-evolves-introducing-upgrading-2-point-0), in contrast, were purposely designed to give us more specific signals. They also requires a lot more — namely, calculating and tracking the momentum scores and potentially altering one’s allocation *every single month* instead of just twice a year.

But for the SMI premium-level member, the issue is quite a bit simpler. The DAA/Upgrading information is available to you every month in an easy-to-obtain format (just [sign up for e-mail updates](https://soundmindinvesting.com/account?tab=email-notifications) or visit this [DAA page](https://soundmindinvesting.com/articles/%7Bpage_55169%7D)  at the end of each month). Given that these signals have been better historically than annual seasonality’s, and they are so easy for SMI readers to obtain, it’s hard to imagine why someone would continue to use the blunt instrument approach of annual seasonality any longer.

This is a good illustration of DAA superseding our past advanced strategies. Annual seasonality was helpful until we found something better. Now that we have, we encourage you to use it instead. __We continue to report on the annual seasonality timing signals, as we know there are members who use it within their 401(k) accounts where implementing DAA is harder. But hopefully, we’ve illustrated why SMI's other risk management tools are better options than annual seasonality for adjusting risk.__

__This year’s signal__

This year's signal comes at an interesting time, as both Stock Upgrading and Dynamic Asset Allocation have taken *defensive* actions in recent weeks. Given those signals are more specific to what is happening in markets *right now*, as opposed to this more "general seasonality pattern," we don't put much weight on this seasonal buy indicator.

That said, it is a healthy reminder that we are entering what is typically one of the strongest times of the year for stocks. There are solid structural reasons why the last quarter of the year (extending into roughly mid-January) are more positive than normal. These range from the compressed market schedule (more holidays and "light" trading days mean the normal action is compressed into fewer days), to the way one year's market gains become the next year's growing collateral to expand the total amount of investment (leading to the "January effect" as investors try to front-run the move higher into year-end and the new year).

So this is perhaps a helpful reminder not to get too bearish, too fast, even as SMI's strategies are becoming a bit more cautious. It's certainly possible there could be a fourth-quarter market bounce first, even if markets are headed lower eventually.

__Conclusion__

It’s crucial to understand that MACD is not a particularly robust timing indicator. It’s an extremely short-term indicator that really is *useful only for optimizing a decision to buy or sell that has been made already.* In other words, you shouldn’t depend on this signal to determine whether it’s a good idea to buy stocks right now or not — but in a system like annual seasonality where the decision to buy sometime around 10/31 *already has been made*, it can be a useful aid in fine-tuning the date to buy.

__Again, to be clear: if you haven’t been specifically looking for the MACD signal (because it’s not part of your long-term plan), we don’t advise taking any action based on this signal.__

*[Image](https://soundmindinvesting.com/img/asset/Y2xvdWQvMDUwNC1ncmFwaHMtYW5kLWNhbGVuZGFyLXBpY3R1cmUtaWQ1MTI0MDk1NzguanBn?fit=crop&w=1660&h=896&s=8d12268a2119ce63e645c83e8a88150b) used with permission. *

Since 1990, do-it-yourself Christian investors have relied on SMI for proven strategies and trustworthy guidance.

Sound Mind Investing

Investing

For those of you who do know about annual seasonality, the fall signal to buy has been triggered.

Annual Seasonality Buy Signal Triggered – Fall 2023

__Although it might not be intuitive, Romans 12:9 provides a compelling framework for investing: “Let love be without hypocrisy. Abhor what is evil. Cling to what is good” (NKJV). Our investment decisions are one of the most powerful ways we can apply the idea of hating what is evil and clinging to (and thereby loving) what is good.__

Faithful investors are characterized by a desire to see all that is good in God’s world grow and flourish. At the same time, they oppose all that is evil and contrary to God’s purpose for his creation by refusing to profit from or aid in helping evil multiply.

This dialectic frame for investing is simple, but not at all simplistic. Though easily grasped, in practice it requires reflection and investigation into what God has defined as good and evil.

In addition, this dialectic frame for investing is moral, but not moralistic. That is, it doesn’t follow that all or even most companies can be easily assigned a label of “good” or “evil.” But Paul’s specific usage of general “good” and “evil” language does imply that we can recognize God’s moral order in the universe, identify it within our real world, and act in accordance with his design.

__It doesn’t follow that all or even most companies can be easily assigned a label of “good” or “evil.” But Paul’s specific usage of general “good” and “evil” language does imply that we can recognize God’s moral order in the universe, identify it within our real world, and act in accordance with his design.__

In light of this frame, four brief reflections deserve mention.

First, investors can look for financial advisors or asset managers that are avoiding what is evil. Avoiding investing in “evil” will require discernment, identifying industries or businesses that contradict God’s purposes for his creation, especially those things that harm people, all of whom bear God’s image, those that fail to guard his good world, or those that create products that consistently require restoration from the bad outcomes they produce. What is encouraging in this area is that there has been growing consensus from the Christian faith community on what are knowable evils we should seek to avoid. __1__

Second, investors can look for financial advisors or asset managers who can assist them in aligning their investments with what is good. Investing in the “good” is a category as wide and long and high as anything that God has called “good,” including his material creation, and all that reflects God’s nature and contributes to human flourishing. It is not for nothing that we call the products of business “goods” and “services.” This is because the products of business are intended to be genuinely good; the products of business are intended to be genuinely a service to humankind. When trying to discern if a product is a “good” or “service,” ask yourself: 1) Is this product meeting an important human need? This would be things of clear and basic social value, such as food, clothing, shelter, energy, and healthcare, among other social goods. 2) Is this product a development that enhances the world? We recall here that God placed humanity in a “very good” creation (Gen. 1:31) and commanded them to effectively make it “even better” (Gen. 2:15). This would be all of the ways that business creates things that we don’t strictly “need” but that nevertheless enhance the quality of life together. We don’t need for example, electricity, lights, microphones, video cameras, computers, internet, and video conferencing software, but connecting more personally over great distances can enhance the quality of life and foster community.

Third, God’s design is never arbitrary. Rather, what he has called good and evil is in line with the grain of the universe. That is, it will necessarily lead to human flourishing and therefore carries an inherent long-term competitive advantage. In short, there is a compelling case to be made that this paradigm leads, over a long time horizon, to better performance.

Fourth, in a fallen world, the products businesses create are rarely ever 100 percent good or evil, but rather, mixed, like dross amidst the silver. In spite of this, wise, discerning asset managers will employ disciplined methods to clarify metrics of how companies align with these categories, not simply to signal virtue, but to follow the purposes of investing in God’s good, fallen, and being redeemed world. Hebrews tells us this kind of moral discernment is the mark of spiritual progress and maturity:

For though by this time you ought to be teachers, you need someone to teach you again the basic principles of the oracles of God. You need milk, not solid food, for everyone who lives on milk is unskilled in the word of righteousness, since he is a child. But solid food is for the mature, for *those who have their powers of discernment trained by constant practice to distinguish good from evil*.” (Heb. 5:12-14, ESV, emphasis added)

__In a fallen world, the products businesses create are rarely ever 100 percent good or evil, but rather, mixed, like dross amidst the silver__

I believe that this is the role and responsibility of those called to serve Christ in the area of capital stewardship.

__Above all, we must remember that the motivation Paul gives in Romans 12:9 is love. Genuine love, that is love “without hypocrisy,” expresses itself in these two directions: abhoring what is evil, clinging to what is good. May our love, and investing, be genuine.__

__Disclosure:__ This communication is provided for informational purposes only and was made possible with the financial support of Eventide Asset Management, LLC (“Eventide”), an investment adviser. Eventide Center for Faith and Investing is an educational initiative of Eventide. Information contained herein has been obtained from third-party sources believed to be reliable.

Inspiring an authentically Christian practice of modern investing.

Eventide Center for Faith & Investing

Articles

Is our investing genuine? Here are four ways we can love without hypocrisy as we invest.

Hate What is Evil; Cling to What is Good

__Recently, SMI's Upgrading and DAA strategies recommended moving to "cash" for some positions.__

"Cash" is a catch-all term for options such as money-market funds (MMFs) and cash-oriented ETFs. There are less liquid forms of cash too, including Treasury obligations and brokered CDs. (Outside of a brokerage account, options range from bank savings accounts and corporate "demand notes" offered by large companies such as Ford, GM, and Caterpillar.)

Typically, the best options to use within SMI strategies are money-market funds. MMFs, which are a type of mutual fund, are posting attractive yields at present, plus they can purchased easily and sold at any time without penalty.

Here is an overview of what's available at [SMI's recommended brokers](https://soundmindinvesting.com/articles/smis-2023-broker-review-choosing-the-broker-thats-right-for-you).

__Fidelity__

Fidelity offers 11 in-house MMFs, both taxable and non-taxable (see a [full list](https://fundresearch.fidelity.com/fund-screener/results/table/daily-pricing-yields/daily7DayYield/desc/1?antf=Y&assetClass=MM&category=TM%2CXT%2CTF&minimumInvestment=0%2C2500&ntf=Y&order=ntf%2CminimumInvestment%2CassetClass%2Ccategory) here). Even better, investors can designate a money-market fund as the default option for "uninvested cash" or — as Fidelity calls it — the "core position."

[SPAXX](https://fundresearch.fidelity.com/mutual-funds/summary/31617H102) (Fidelity Government Money Market Fund) is available as a core position fund for any Fidelity investor. Some accounts also have access to [FDRXX](https://fundresearch.fidelity.com/mutual-funds/summary/316067107) (Fidelity Government Cash Reserves). Non-retirement account holders have one other option: [FZFXX](https://fundresearch.fidelity.com/mutual-funds/summary/316341304) (Fidelity Treasury Money Market Fund).

As of yesterday (10/03), all three funds had similar "7-day yields" (i.e., a projection of what an MMF would yield over one year based on its income distributions over the past 7 days):

![](https://soundmindinvesting.com/assets/articles/fidelity-mmfs-2.png)

Choosing an MMF as one's core position fund makes "going to cash" as simple as selling a holding and then leaving the proceeds in the default account. (It also simplifies redeploying your cash back into an equity fund when the time comes.) However, if you would prefer to keep your core position separate from any cash you're holding for DAA or Upgrading, you can invest the proceeds in a different Fidelity MMF.

If you're not sure which fund you're currently using for your core position, log in to Fidelity, select "Accounts & Trade," and then "Account Positions." Click your core position and you should see the fund name. You'll also see an option to "Change Core Position." (If you prefer, a Fidelity rep can make the change for you — call 800-544-6666.)

In addition to the MMF options described above, Fidelity offers other core position options. For retirement accounts, there's an FDIC-insured bank sweep that currently pays 2.72% APR. For non-retirement accounts, there's the Taxable Interest Bearing Cash Option (FCASH), currently paying 2.69%. But there is no reason to choose either of those when Fidelity's MMFs are offering better yields.

__Schwab__

Unlike Fidelity, Schwab doesn’t allow an MMF to be selected as a default option for sweep money. At Schwab, the default options for cash (for most customers) are" 1) An FDIC-insured "Bank Sweep" that deposits money in interest-bearing deposit accounts with Schwab-affiliated banks or 2) an SIPC-insured "Schwab One Interest" account. Both presently pay a scant 0.45%.

Contrast that with [SWVXX ](https://www.schwabassetmanagement.com/products/swvxx)(Schwab Value Advantage Money Fund), which has a 7-day yield of 5.24% (through 10/03).

To use SWVXX or any other Schwab money market fund, you have to make a fund purchase, as with any other mutual fund. From Schwab's Trade screen, choose "Mutual Funds" (or use an "All-in-One Trade Ticket") and enter SWVXX (or the fund you prefer) in the symbol field. Choose "Buy" and enter the dollar amount you wish to purchase.

Schwab's money market funds are [listed here](https://www.schwab.com/money-market-funds). Select an "investor shares" fund (unless you're investing $1 million or more!).

__E-Trade__

In contrast to Fidelity and Schwab, which offer only in-house MMFs, E-Trade offers taxable and non-taxable money-market funds from many companies, including Federated Hermes, American Century, and (E-Trade owner) Morgan Stanley. Vanguard MMFs are available, too (minimum investment: $3,000).

Currently, about 20 of the taxable funds available via E-Trade have 7-day yields above 5.00%. You can research all of E-Trade’s MMF offerings [here](https://www.etrade.wallst.com/Research/Screener/MutualFund/?ChallengeUrl=https://idp.etrade.com/idp/SSO.saml2&reinitiate-handshake=0&AuthnContext=prospect&env=PRD) (use the "Fund Category" option in the left column and choose "Money Market" from the dropdown menu.)

Note: If you're an E-Trade investor, you may want to get in the habit of regularly transferring any uninvested cash to an MMF because E-Trade is among the worst-paying brokers for cash-sweep money. Despite interest rates being at their highest level in years, E-Trade still pays a paltry 0.10% on cash holdings of less than $500,000.

__Firstrade__

Think of Firstrade as the brokerage equivalent of a "no-frills airline." It may be cheaper than the other guys, but the trade-off is limited service and irritating inconveniences. Here's a great example: Firstrade offers no money-market funds. None. Nada. Zilch.

Therefore, Firstrade customers who wish to "go to cash" will need to select an ETF option. An appropriate one is [TBIL](https://www.morningstar.com/etfs/xnas/tbil/performance) (US Treasury 3 Month Bill ETF). That fund is yielding 3.73% YTD (total price return through 10/02). TBIL is available via Firstrade commission-free.

__Vanguard__

Vanguard investors have a sweet arrangement when it comes to "going to cash." [VMFXX](https://investor.vanguard.com/investment-products/mutual-funds/profile/vmfxx) (Van guard Federal Money Market Fund) — with a current 7-day yield of 5.30% — is the default "settlement fund" for Vanguard account holders.

Of course, if you prefer to keep your "SMI strategy cash" separate from "uninvested cash," you can employ a different Vanguard money market fund. The company's MMF offerings and current rates are [shown here](https://investor.vanguard.com/investment-products/money-markets#mm-rates).

Note: For non-retirement accounts, Vanguard recently rolled out the FDIC-insured [Vanguard Cash Plus Account](https://investor.vanguard.com/accounts-plans/vanguard-cash-plus-account), currently yielding 4.70%. At this point, the Cash Plus Account is not available to all customers.

*[Images](https://soundmindinvesting.com/assets/articles/fidelity-mmfs-2.png) used with permission. *

Here is an overview of what's available at SMI's recommended brokers.

Where to Invest Your "Cash"

__Apocryphal legend has it that someone once asked Martin Luther what he would do if he knew Jesus Christ was returning the next day. It’s an excellent question for everyone to consider. How we view tomorrow determines how we live today.__

Modern Western evangelicalism has too often espoused what some scholars call a two-chapter gospel. Chapter one: humans sinned and fell into the fall. Chapter two: Jesus died and rose to save us. But this is only part of the story of the scriptures. We are hyper-focused on the past and the present.

However, the Bible actually presents something more akin to a four-chapter gospel, where good creation and new creation bookend sin and redemption. The economy of Eden points to the economy of New Jerusalem. The trajectory of the Christian life moves from God making us in his image toward a day when his name will be inscribed on our foreheads. In other words, we were made to look like God, and he’s making us to look like him again.

The Spirit of God accomplishes this sanctifying work in us in real time and real space. He moves our hearts and our will, our desires and our dollars, away from the economy of Babylon and toward an economy of creativity and integrity.

The Spirit of God ... moves our hearts and our will, our desires and our dollars, away from the economy of Babylon and toward an economy of creativity and integrity.

__The New City__

Wendell Berry, an agrarian poet, essayist, and novelist, has a collection of novels centered in Port William, a fictional town based on his home in rural Kentucky. His characters overlap from book to book. They learn, suffer, work, grow, and belong together. They see their community as a holy membership. So, when in *Hannah Coulter* the narrator muses on the return of Christ, she adds a bit of color to John the Revelator’s words. She imagines “a new heaven and a new earth and a new Port William coming from heaven, adorned as a bride for her husband, and whoever has known her before will know her then.”

Have you ever considered what your city will look like when it’s made new? I grew up believing that the world-ending fire (to borrow another phrase from Berry) in 2 Peter 3 was one of destruction. But the more I read and the longer I live, the more I believe it’s one of refinement. To put it another way, God is making all things new, not all new things.

Have you ever considered what your city will look like when it’s made new?

We must remember that we are moving from a garden to a city. God created us in a garden to work and keep it, and he created us for a city—one with gates, vineyards, jewels, cuisine, and homes. We will be a people, a membership, in a place that’s the very presence of God. And we will be exchanging with one another relationally, spiritually, and spatially. Simply put, the difference between a city and a garden is the complexity of the economy. We should expect our work and our investments to grow in scope, efficacy, and beauty.

__Investing Today in Light of New Creation__

This fundamentally changes the way we invest today. Unlike money itself and our desire to hoard it, our investments will not burn up in the end. Investment is an act of ownership, one of blessing a company’s product or service as desirable and necessary, one of validation and approval of the business’s process and philosophy. This means as investors we should ask: What kinds of businesses can survive the refining fire?

As investors we should ask: What kinds of businesses can survive the refining fire?

First, we are wise to consider which product offerings and operational processes will *not* be present in God’s presence. Though Babylon is the economy of imperfect options, some companies unfortunately go above and beyond in harming those they are supposed to serve. Forced labor and unsafe working conditions abound in supply chains, and profits depend on products that prey on the poor and cause addiction. If it’s not a company we would frequent in the next life, why would it be a company we are comfortable owning in this life? Eliminating egregious actors from our investment consideration is a small step we can take to prepare ourselves and our world for Christ’s return.

Second, we ought to examine what values and virtues will certainly reside in the new creation. Reflecting their Maker who is a healer, provider, and innovator, there are companies all across the world committed to solving under-researched medical ailments, paying employees more than enough to thrive, and establishing educational centers for underprivileged youth. If New Jerusalem is a city where, as C.S. Lewis once said, every sad thing will come untrue, we should want to own companies that want to make life here on earth a foretaste of how it will be in heaven.

Still, some may wonder, will any of our labors and investments truly matter in the end?

J.R.R. Tolkien, facing severe writer’s block and anxiety while writing *The Lord of the Rings*, penned a short story entitled “Leaf by Niggle.” Niggle is an artist overtaken by the vision of a resplendent tree, but he finds himself stuck depicting the details of a single leaf. He lives a faithful life, working hard as a painter, but also as a member of his community. Indeed, his artistic labor is often interrupted by neighbors desiring his help. How will he ever complete his painting?  Eventually, death comes for Niggle. Tolkien describes him wandering around heaven on a bicycle. Suddenly, Niggle catches a vision that knocks him off in amazement. There before him, face to face, is his tree. It is fully finished. He can even identify something of an echo of that leaf on which he so long strained.

Christ has died, Christ has risen, and Christ will come again. He could come again tomorrow, so what we do today matters. It matters because our work—including our investments—can signal how we were made in God’s image, how Christ worked his redemption in us and uses us as agents of renewal, and point to how one day we shall be in the life of the world (and economy) to come.

With eyes fixed toward the new creation, Martin Luther could answer his friend’s question with ease. If Christ were returning tomorrow, he said, “I would still plant a tree today.”

__DISCLOSURE__
This communication is provided for informational purposes only. Eventide Center for Faith and Investing is an educational initiative of  Eventide Asset Management, LLC (“Eventide”),  an investment adviser. Information contained herein has been obtained from third-party sources believed to be reliable.An employee of One Ascent has an equity interest in Eventide. This individual does not have an active role with the company; however he does receive profit sharing distributions based on his equity ownership giving him an incentive to support sales of Eventide’s investment products and services.

*[Image](https://www.faithandinvesting.com/journal/the-economy-of-all-things-new/) used with permission. *

What investments would be worthy of the heavenly city?

The Economy of All Things New

For more than a quarter century, financial advisors have used the 4% rule for retirement withdrawals. So why change it now? Some advisors are now saying 4% may be too high, while the man who wrote the rule says it’s too low. In today's Faith and Finance Rob West weighs into the debate. This is Faith and Finance -  biblical wisdom for your financial decisions.
- We’ll start by consulting God’s Word about saving and spending, which lays down a basic principle. Proverbs 21:20 tells us, *“Precious treasure and oil are in a wise man's dwelling, but a foolish man devours it.”*
- We certainly don’t want to be foolish, so choosing the right percentage that we can withdraw from our holdings each year in retirement is important, to say the least. Too little and you may not be able to meet your expenses. Too much, and you run the risk of running out of funds during retirement.
- You might be curious about where the 4% rule came from in the first place. Way back in 1994, investment advisor Bill Bengen published an article that detailed how and why he was recommending to his clients that they only withdraw 4% a year from their assets in retirement.
- Bengen said he created his 4% rule based on a hypothetical investor who retired in October, 1968, and was promptly hit with an extended bear market and high inflation. In other words, a “worst case scenario.”
- And even though you might be tempted to think history is repeating itself now, Bengen believes that by tweaking asset allocation, a retiree would actually be safe withdrawing up to 4.7% annually, as he is doing now. To be fair, he’s suggesting that 4.5% would be safer, until we see what inflation will do in the near future.
- So how did Bengen arrive at the new, 4.7% figure? He says it’s due to the greater gains he’s seen by adding small and microcap asset classes to his portfolio. He says that increased volatility, but also gains, which made his 4.7% calculation possible.
- Besides the benefit of increasing the rate of withdrawal in retirement, the new rule also allows the retiree to reduce allocation in stocks over bonds. The old 4% rule was based on a 50 to 70% stock allocation, which could make many retirees jittery.
- The new higher withdrawal rate of 4.7% over the long haul is based on an ideal stock allocation of only 55 to 60%.
- Bengen says having less than that in equities will lower your return enough enough to make 4.7% unworkable, but having more than that will create enough volatility to also threaten your safe withdrawal rate.
- But not all investing experts are as optimistic as Bengen. In fact, Morningstar is now suggesting that the old 4% rule is too high a withdrawal rate for the times. They’re recommending that figure be reduced to just 3.3%.
- Remember that the goal is to have enough built up to last for a 30-year retirement, say from age 65 to 95. Market returns and inflation will no doubt fluctuate a great deal over that time, but in the end, they should balance out.
- And whether you use 3.3, 4, or 4.7% as your safe withdrawal rate in retirement, they all assume that percentage of your portfolio will be enough to live on when Social Security is added to the mix.
- Anyone contemplating an earlier retirement will need a great deal more in assets or a lower withdrawal rate, or both. That certainly won’t be easy.
- Some investment advisors suggest that maximum diversification is one way to overcome the uncertainties of bear markets and inflation. That means not just having a broad spectrum of stocks and bonds, but also having several different “buckets” of retirement holdings.
- Some might be in a 401k or traditional IRA with their tax-deferred benefit. Some could also be in a Roth IRA, that’s funded with after tax money but allows for tax-free withdrawals. Some equity holdings could be income-producing, some dividend-paying.
- Some fixed income securities could be I bonds, which are taxable; others could be municipal bonds which aren’t subject to federal tax. Some “munis” even escape state taxes, as long as you live in the state that issued the bonds.
- This can all get pretty confusing. There's a case for having an experienced financial advisor help you with your retirement investing, whether you’re already retired or you're still working. We believe strongly in the Certified Kingdom Advisor designation. With a CKA, you’ll not only have an experienced advisor, but one who shares your Christian values. You can find a local CKA professional, by going to faithfi.com and click the [Find a CKA](https://www.faithfi.com/find) at the top of the page.
Next, Rob answers these questions at __800-525-7000__ or via email at [askrob@FaithFi.com](mailto:askrob@faithfi.com?subject=Faith%20and%20Finance%20Listener%20Question&%20Finance%20Listener%20Question)
- How can you give up a timeshare that you purchased last year if the sellers are telling you that it can't be sold back to them? (Rob referred the caller to the [Timeshare Users Group](https://tug2.com/Home)).
- What's your best recourse to pay off about $7000 in credit card debt and buy now pay later loans if you are 64, living on a fixed income, and don't want to get further in debt? (Rob referred the caller to [Christian Credit Counselors](https://www.christiancreditcounselors.org/)).
- Would it hurt your credit rating to close a Mastercard you opened last year when you were trying to get out of a timeshare, but never activated the card? (Rob referred the caller to [annualcreditreport.com](https://www.annualcreditreport.com/index.action)).
- What is the purpose of opening a Roth IRA now if you were told by an advisor you should have one waiting to be funded for when you retire in five years?
- How do you report interest paid to you by a home buyer who was initially renting from you?
Remember, you can call in to ask your questions most days at (800) 525-7000. Also, visit our website at [FaithFi.com](https://www.faithfi.com/) where you can join the FaithFi Community, and even download the free FaithFi app.

FaithFi

Faith & Finance is a daily radio ministry hosted by Rob West. The program offers a practical, biblical and good-natured approach to managing your time, talents and resources.

Faith & Finance with Rob West

For more than a quarter century, financial advisors have used the 4% rule for retirement withdrawals. So why change it n

4%: A Rule To Be Broken?

There are also no secrets to successful investing. In the long run, several key factors will determine your results. Mark Biller lays those out for us today on Faith and Finance.
Mark Biller is the executive editor at <a href="https://soundmindinvesting.com/">Sound Mind Investing</a>.
<ul><li>Today we want to look at <a href="https://soundmindinvesting.com/articles">an article</a> you have up at SoundMindInvesting.org titled, “Eight Key Factors That Determine Your Long-Term Investing Results.” We’ll dive into those in a moment. But first, let’s talk about the big-picture message we hope you’ll take away today.</li><li>In a nutshell, it’s to focus on what you can control rather than worry about what you can’t. That’s good advice for all aspects of life, including money management. </li><li>For investors, it’s a timely reminder as well, given the ever-present uncertainty about the stock market’s future direction. But regardless of which way the market moves this year, there are still several factors you have direct control over. So those are the things to focus our attention on.</li><li>KEY FACTORS</li><li>1. The rate of return you earn: This is what investors focus most of their attention on, which causes them to spend their time trying to pick winning stocks, the best funds, or the most astute market guru to follow. </li><li>And it’s not that your rate of return doesn’t matter. It obviously does. It’s just that, unfortunately, this is the one factor we’ll discuss today that’s largely out of your control, unless you’re willing to settle for guaranteed CD-like returns. No matter how hard you study or how much you know, you can’t predetermine exactly what your rate of return will be. So instead, it makes sense to turn your attention to the factors where you do have a lot of control.</li><li>2. Building on a strong foundation: This is the first factor that you DO have control over. You don’t have as much to fear from economic storms and bear markets if you’re debt-free, have an emergency reserve, and use a cash flow plan that produces a monthly surplus. </li><li>Your ability to put such a foundation in place is affected by how big a house you buy, how new a car you drive, how responsibly you handle credit, and a host of other decisions—most of which are under your direct control.</li><li>3. How much you save and invest: Invest $200 a month for 20 years at 10.0% and it will grow to $152,000. You could improve that to $198,000 by either (1) increasing your annual rate of return from 10% to 12%, or (2) by increasing your deposit by $60 per month. </li><li>A lot of investors will try to move heaven and earth to boost that return, while boosting the monthly deposit is much more certain and under their direct control.</li><li>3. How much you lose to taxes: The example I just gave assumes you’re investing in a tax-deferred retirement account. If you made your $200 monthly investments into a regular taxable account, you’d need to earn 12.6% per year rather than 10%, just to reach even the lower $152,000 target. (That’s assuming a 29% combined federal/state rate.) </li><li>So you want to make full use of tax-advantaged accounts like IRAs and 401(k)s.</li><li>4. How long you save: Examples of compound interest and investment growth show us that amazing things happen when you leave money invested for long periods of time. That means you should start contributing to your investment accounts as early as possible and plan to leave the money working tax-deferred for as long as possible.</li><li>5. Whether you’re playing the short game or the long game: With the long-term investing game, you win by plotting your strategy very carefully at the outset, and then letting that strategy play out over time. Short-term news, current market fads, and so-called expert opinions are largely irrelevant to long-term investors.</li><li>So turn off the financial shows on TV and stop looking at your daily returns.</li><li>6. Whose advice you listen to: Is your strategy in sync with biblically based financial principles, or more reflective of the conventional thinking offered by the secular investing world? It’s your choice.</li><li>And there we can recommend two sources for biblical financial advice: Obviously at Sound Mind Investing. Also, you can connect with a Certified Kingdom Advisor. You can do that at <a href="https://www.faithfi.com/">FaithFi.com</a>.</li></ul>On this program, Rob also answers listener questions: 
<ul><li>What is the best approach to saving for and purchasing a car? </li><li>How can you get the best possible return on your money with minimal risk? </li></ul>Remember, you can call in to ask your questions most days at (800) 525-7000. Also, visit our website at <a href="https://www.faithfi.com/">FaithFi.com </a>where you can join the FaithFi Community, and even download the free FaithFi app.

The late Colin Powell said, “There are no secrets to success. It is the result of preparation, hard work, and learning from failure.”  ﻿There are also no secrets to successful investing. In the long run, several key factors will determine your results.

Factors for Successful Investing With Mark Biller

The late Colin Powell once said, “There are no secrets to success. It is the result of preparation, hard work, and learning from failure.” There are also no secrets to successful investing. In the long run, several key factors will determine your results. Mark Biller lays those out for us.
Then it’s your calls at 800-525-7000.

Listen to MoneyWise Live each weekday at 4pm EST on Moody Radio.

MoneyWise Live

When it comes to investing, it helps to think inside-out. Rob West encourages us not to get distracted by “Five Hot Investments You Should Be Looking at Right Now!” Instead focus on what God has called you to and invest accordingly.

The Faith & Finance Minute is a great way to be reminded of God's financial principles with actionable items you can easily apply to your daily life.

Faith & Finance Minute

When it comes to investing, it helps to think inside-out. Rob West encourages us not to get distracted by “Five Hot Investments You Should Be Looking at Right Now!” Instead focus on what God has called you to and invest accordingly.

Investing From the Inside-Out

__How do you decide if a stock will be a good investment?__

Investors' answers to this question usually fall into one of three categories:

1. Indexing – No one can answer this question
2. Quantitative Data Crunching – Looking at objective metrics and tangible assets
3. Fundamental Qualitative Investing – Looking at both objective metrics AND intangible qualities

__Director of Education @ShaunMorgan walks through how Eventide seeks to identify early indicators of a company’s long-term success.__

You can also find the whole story here ⇒

Apple Podcasts: [https://podcasts.apple.com/us/podcast...](https://www.youtube.com/redirect?event=video_description&redir_token=QUFFLUhqbmVqeGtZWFJYOEs3aWhtR2Q4ZGVRTXk5LVQ5QXxBQ3Jtc0tscWVNZzBGaEhvekx0d1I4UVpiRE9CdDFjN25RdGFkclZ2RzJXMEpETVZBLUVBbnVBUThITlhpQUwzMW9qbTJwTHdxV09JMk1mM3gwUUdyUzFmeVlUT1l1cnpZbDdQVlZYRnRtQTZLenNIT0dpQlNwMA&q=https%3A%2F%2Fpodcasts.apple.com%2Fus%2Fpodcast%2Fthe-company-behind-the-stock-price-ft-dolores-bamford%2Fid1691896688%3Fi%3D1000618463660&v=dTqEu32GAFo)
Spotify: [https://open.spotify.com/episode/7ldX...](https://www.youtube.com/redirect?event=video_description&redir_token=QUFFLUhqa1NCVXl0UEVuMXVOQ1VvR3NWY1BrOGtLS09XZ3xBQ3Jtc0tuSTVzX3NoQUlzQ29MZmxVM0dSMnZLUUVsQVJqZTNwckoxOUNCUFd3djdzblY3UXlTNUxxWm50MnBxaTY1UnZQM0Z6NWJVZG16ZVU3OS1nNW9EUlU1ZkVsNUdra0NYV25JQ0VqQ0p3WG9RN1JaSzN6OA&q=https%3A%2F%2Fopen.spotify.com%2Fepisode%2F7ldXyo99v9WalDvie8g6Sb%3Fsi%3D42f3260f7ccb42a2&v=dTqEu32GAFo)
Youtube:   [The Company Behind the Stock Price ft...  ](https://www.youtube.com/watch?v=8slQxSY-qX8&t=0s)
Google: [https://podcasts.google.com/feed/aHR0...](https://www.youtube.com/redirect?event=video_description&redir_token=QUFFLUhqbE1VSENRc1R5TGx0R2pLeGNLOWtUNVFQOE44QXxBQ3Jtc0tuNnBGQWJWU2tGVHZkSHFPY0dxS1otN2RGcDJDM3lKNnhpSk5EVERqazdTNnByYVpNM0MtWUtyUEl5UE1Pa3RlRnoycENXQmNnd2JMTjZzQjdheXREVjk5Y1VTbEw2QnFzTFJaaXJPamxORU1BRl9rRQ&q=https%3A%2F%2Fpodcasts.google.com%2Ffeed%2FaHR0cHM6Ly9mZWVkcy5idXp6c3Byb3V0LmNvbS8yMTcyNTgwLnJzcw%2Fepisode%2FQnV6enNwcm91dC0xMzA5Njk5MA%3Fsa%3DX%26ved%3D0CAUQkfYCahcKEwjg08LI2YSAAxUAAAAAHQAAAAAQBA&v=dTqEu32GAFo)

*This communication is provided for informational purposes only and expresses views of Eventide Asset Management, LLC (“Eventide”), an investment adviser. There is no guarantee that any investment strategy will achieve its objectives, generate profits, or avoid losses. Eventide’s values-based approach to investing may not produce desired results and could result in underperformance compared with other investments. Any reference to Eventide’s Business 360® approach is provided for illustrative purposes only and indicates a general framework of guiding principles that inform Eventide’s overall research process. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results.*

*Eventide’s ethical values screening criteria could cause it to underperform similar investments that do not have such screening criteria. This could be due to ethically acceptable companies falling out of favor with investors or failing to perform as well as companies that do not meet Eventide’s ethical screening guidelines. The Adviser’s judgment about the quality of a particular company may prove to be incorrect.*

*Eventide uses its trademark (“Investing that makes the world rejoice®”) in a figurative manner to help explain its focus on serving investors by helping them improve the world.*

Eventide

Insights

How do you decide if a stock will be a good investment?

Three Ways Investors Evaluate Stocks

In a recent interview on the Invest by Design podcast, Eventide CEO Robin John shares his view that investors are inevitably rooting for a company’s success when investing. This should ultimately shape how we approach investing.

Hear the full episode on [Apple](https://podcasts.apple.com/us/podcast/invest-by-design/id1691896688), [Spotify](https://open.spotify.com/show/5oX2cLjSqqOWe55D92E7WF), [YouTube](https://youtube.com/playlist?list=PLl7ow5b65N2HgPLmmgf1PwkeWxZ5ILMGr), or [Google](https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5idXp6c3Byb3V0LmNvbS8yMTcyNTgwLnJzcw/episode/QnV6enNwcm91dC0xMzAwNjI5Mg?sa=X&ved=0CAUQkfYCahcKEwjAqcSrzMD_AhUAAAAAHQAAAAAQAQ).

__Transcript:__

*So what were the problems that you saw with investing and how did you think they needed to be fixed?*

*Shaun, when I was starting Eventide with Finny one of the biggest issues I saw in the investment world is that people didn’t even understand what investing is. I think that the number is that 150 million investment accounts exist in this country but I don’t think most of those people have really thought through the purpose of business or of investing. I was actually recently speaking to a professional money manager and that person couldn’t explain to me what the purpose of investing is, but a couple of weeks ago I was at…speaking to a class of undergraduate students and I asked them “what is the purpose of investing?” and they said “to allocate capital” and I said to them “where would you want to allocate capital?” And they started giving me examples of the types of things that they would…where they would want to allocate capital, and so one of the things I often remind people is that we also root for the success of the companies we’re investing in. So it’s not just about avoiding ill-gotten gain, but really like what do you want to see in the world? Those are the areas we should be putting our capital? So if you if you are investing in tobacco, an investor is happiest if everybody in the world smoked tobacco, you want more and more people to be customers in tobacco companies. Vice versa, if you are investing in a cancer drug, you want everybody with cancer to have access to that drug, right? So what are we rooting for in the world? Most investors haven’t really thought through the purpose of investing or the power of investing to change the world.*

__This communication is provided for informational purposes only and expresses views of Eventide Asset Management, LLC (“Eventide”), an investment adviser. There is no guarantee that any investment strategy will achieve its objectives, generate profits, or avoid losses. Eventide’s values-based approach to investing may not produce desired results and could result in underperformance compared with other investments. Any reference to Eventide’s Business 360® approach is provided for illustrative purposes only and indicates a general framework of guiding principles that inform Eventide’s overall research process. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results.__

A New Framework for Business

When we invest in a company, we root for its success

What Are We Rooting for in the World?

__Gain insight into the mind of a scientist-turned-investor. Eventide Managing Director and Senior Research Analyst Kyle Rasbach, MD, PhD, shares his unique perspective on the healthcare industry and why he made the career shift from developing therapies to investing in them.__

*This communication is provided for informational purposes only and expresses views of Eventide Asset Management, LLC (“Eventide”), an investment adviser. There is no guarantee that any investment strategy will achieve its objectives, generate profits, or avoid losses. Eventide’s values-based approach to investing may not produce desired results and could result in underperformance compared with other investments. Any reference to Eventide’s Business 360® approach is provided for illustrative purposes only and indicates a general framework of guiding principles that inform Eventide’s overall research process. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results.*

Personal Stories

Why did I make the career shift from developing healthcare therapies to investing in them?

The Transformative Possibilities of Investing

There are only three places that we can choose to leave our estate? Ron Blue helps you determine which option is best for you.

The Ron Blue Institute seeks to be a thought leader with great influence committed to changing the way Christians think, act, and communicate about financial stewardship, empowering the church, and changing the world.

Ron Blue Institute

Videos

There are only three places that we can choose to leave our estate. Which one is best?

Annual Seasonality Buy Signal Triggered – Fall 2023

Nov 24, 2023

For those of you who do know about annual seasonality, the fall signal to buy has been triggered.

Mark Biller

Hate What is Evil; Cling to What is Good

Nov 22, 2023

Is our investing genuine? Here are four ways we can love without hypocrisy as we invest.

Matt Rusten

Where to Invest Your "Cash"

Nov 21, 2023

Here is an overview of what's available at SMI's recommended brokers.

Joseph Slife

The Economy of All Things New

Nov 16, 2023

What investments would be worthy of the heavenly city?

Will Sorrell

4%: A Rule To Be Broken?

Feb 20, 2023

For more than a quarter century, financial advisors have used the 4% rule for retirement withdrawals. So why change it n

Factors for Successful Investing With Mark Biller

Jan 24, 2023

The late Colin Powell said, “There are no secrets to success. It is the result of preparation, hard work, and learning f...

FaithFi

Factors for Successful Investing With Mark Biller

Jan 24, 2023

The late Colin Powell said, “There are no secrets to success. It is the result of preparation, hard work, and learning f...

MoneyWise Live

Investing From the Inside-Out

Jan 20, 2023

When it comes to investing, it helps to think inside-out. Rob West encourages us not to get distracted by “Five Hot Inve...

FaithFi

Three Ways Investors Evaluate Stocks

Nov 30, 2023

How do you decide if a stock will be a good investment?

Shaun Morgan

What Are We Rooting for in the World?

Aug 24, 2023

When we invest in a company, we root for its success

Robin John & Shaun Morgan

The Transformative Possibilities of Investing

Aug 31, 2023

Why did I make the career shift from developing healthcare therapies to investing in them?

Kyle Rasbach, PhD, PharmD

Ways I Can Plan to Leave My Estate

Jul 3, 2023

There are only three places that we can choose to leave our estate. Which one is best?

Ron Blue