Campbell Wealth Management - October 2019

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WEATHERING THE STORM

When a hurricane comes, it’s never a surprise. These storms are tracked for several days before they make landfall, giving residents a chance to prepare. Other types of storms, like tornadoes, can appear with little to no warning. One moment, there’s nothing, and the next, there’s a path of destruction. With Hurricane Dorian passing through recently, bringing with it significant devastation in the Bahamas and the East Coast, I’ve also been thinking about the volatility in the markets. We could be seeing a storm on the horizon. For the most part, the market is reaching new all-time highs. It’s been rising for the past 10 years, and its performance has been impressive. This year, however, we’ve started to see some serious volatility —more than usual. It’s like the volatility you see in weather patterns as a hurricane forms and grows over the Atlantic. Since the market hit its modern low in March 2009, it’s rebounded by 400%. What’s really impressive is that this rebound has lasted 10 years. At the same time, it also means a lot of people have become complacent. I bring this up because I want to tell you a bit about our “downside protection strategy.” Just as hurricanes can be destructive, so can economic downturns. But, just as we can prepare for a hurricane —we can board up our windows and leave town for a few days —we can also prepare for a downturn.

But a lot of people aren’t doing anything about it, despite what economists and analysts are saying. Instead, many investors and portfolio managers are going to wait for the storm to be overhead before they finally decide to take action. We, however, are doing something. Mark Wagner, CFA®, our Portfolio Manager, keeps a very close eye on all our portfolios. He’s also deeply involved in our Progress and Protect Program. All of our clients are either nearing or in retirement and our priority is to protect them. This program is designed to help do just that. It’s about making sure elements of our portfolios are allocated properly. Ordinarily, a portfolio may be 60% stocks and 40% bonds (for example). As the economy shifts toward downturn, we may sell off some of the stocks and replace them with bonds. Then, when the economy recovers, we switch again. We do everything in our power to mitigate the effects of an economic downturn. In an ordinary downturn, people can lose between 30% to 50% of their portfolio’s value. That can significantly alter how you live in retirement. Part of the problem isn’t just a loss in value, but the impulse to sell. During a downturn or recession, it can be very tempting to sell without giving serious consideration to what you are selling. You only want to get out before it gets worse. It’s an emotional decision. But you end up selling low (and buying high). The timing is all wrong.

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The Free Radical 411 How to Minimize Age-Inducing Atoms

If you’ve ever picked up a health magazine while waiting at the doctor’s office, then you’re probably familiar with the term “free radicals” — at least enough to know that they get a bad rap from doctors and beauticians alike. But what are they, exactly? According to Live Science, free radicals are atoms with unpaired electrons that have split off from oxygen molecules in the body and started to “scavenge” for other electrons to pair with. That wouldn’t be problematic, except that these atoms tend to damage cells, lipids, proteins, and even DNA along the way, and that destruction has serious consequences. As Live Science puts it, “Free radicals are associated with human disease, including cancer, atherosclerosis, Alzheimer's disease, Parkinson's disease, and many others. They also may have a link to aging, which has been defined as a gradual accumulation of free-radical damage.” Unfortunately, it’s impossible to entirely avoid free radicals and the havoc they wreak. The process that forms free radicals, called oxidative stress, can be kick-started by a variety of different substances found in food, water, medicine, and even the air we breathe, according to the Huntington’s Outreach Project for Education at Stanford University. Unsurprisingly, these substances are things already considered unhealthy, like alcohol, exposure to X-rays, ozone, fried food, chemical pesticides, air pollutants, and tobacco smoke.

That said, there is one molecule that is stable enough to stand up to and reduce free radicals: the antioxidant. According to a study published by Pharmacognosy Reviews, antioxidants can “donate an electron to a rampaging free radical and neutralize it, thus reducing its ability to damage.” Synthetic antioxidants exist but can sometimes have harmful side effects, so scientists advise protecting yourself by avoiding free radical triggers like alcohol, processed foods, and red meat, and ingesting natural antioxidants in the form of berries, stone fruits, olives, onions, garlic, and green and black teas. Herbs and spices like cinnamon, basil, turmeric, and fenugreek can ratchet up your antioxidant levels too. While it can’t guarantee immortality, the right diet can certainly help you stave off aging and disease, so why not start today?

3 STEPS TO TAKE TO

FINANCIALLY PREPARE FOR A RECESSION otherwise would have. This not only resulted in penalties for people under age 55 but also meant that the money was not there once the economy recovered. Eliminate most, if not all, debt you’re currently carrying. If you’re carrying debt on credit cards or via loans, now it is the time to reduce or eliminate as much of it as possible. This puts significantly less strain on your income during a recession economy, a time when you may want to tighten the purse strings. Holding onto debt makes it much harder to tighten those strings. Take a closer look at your portfolio. As discussed in this month’s cover article, we work hard to minimize risk during downturns in order to protect your assets. However, it’s still important to scrutinize your investments. While no portfolio spread is 100% recession-proof, it’s always important to understand the makeup of your portfolio. Know what you have, and if you have any questions about your portfolio or our investment strategy, don’t hesitate to ask!

If you’ve been paying attention to the news, you know economists

are talking. There is concern that a

recession is on the horizon. After a decade of market prosperity, we’re overdue for a downturn, but the question is are you financially prepared to weather one? Even if a recession doesn’t take hold in the next year, it’s always good to be prepared and have a strategy in place. Here are three things to keep in mind as we navigate end-of-year volatility. Maintain a “rainy day fund.” Regardless of economic conditions, you should always have extra savings set aside for “just in case” scenarios. Having a fund like this means you’re less likely to rely on other sources of money that you’re not ready to touch. During the Great Recession, many people dipped into their retirement accounts earlier than they

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DON’T LETMONEY GET IN THEWAY Of Your Grandchild’s Education

There are people who also say they can weather the downturn. I’ve heard people say they were just fine in 2008/2009. But that was 11 years ago. At that point, the people who said the recession didn’t really impact them were in the workforce. They had a reliable (or mostly reliable) income and were on top of their investments. Plus, 11 years ago, many people were able to cash in on the downturn. In a downturn, you can essentially buy stock “on sale.” That’s when people were buying low. And if they weren’t selling low too, then there is a good chance they prospered over the last decade as prices recovered and soared. That isn’t necessarily the case today. These folks might be retired now. Their income is coming from their investments or retirement accounts — and that’s it. If a recession hits, those accounts may very well take a hit, too. There’s no steady employment income to fall back on. You want your retirement assets to last you through your retirement. You want to know you’ll be taken care of. This is why you need an asset preservation strategy. While we can't predict the future, we can still prepare for the future, and our goal is to protect our clients from whatever storm may be brewing on the horizon. Kelly Campbell 529 savings plan are considered student income and could hurt your student’s eligibility for financial aid. If you choose to fund through a parent’s 529 savings plan, which doesn’t count as student income, you lose control over the funds you contribute. Pay their tuition. Not everybody has $20,000 just lying around, but if you do, using it to pay for your grandchild’s tuition isn’t a bad way to spend it. Normally, annual financial gifts that are exempt from the federal gift tax can’t exceed $15,000, but payments toward someone’s tuition, for any amount, are not taxed. Keep inmind, however, that the money can only go toward tuition, not toward other college expenses like room and board or textbooks. Help themfind opportunities to save. Even if you don’t have thousands of dollars to give, you can still help your grandkids look for other opportunities to save. There are thousands of available scholarships, grants, and programs to help students pay for college, and helping them look online and in your community can go a long way. College could be your grandchild's first stop on the path to achieving their dreams. You can be a part of that journey by making sure money doesn’t get in the way of that. ... continued from Cover

College expenses aren’t what they used to be. What used to be affordable to any student with a part-time summer job now can take years to pay off. If your grandkids want to go to college, the cost of education should not be a barrier to their future. Luckily there are ways that you can help ease that financial burden. Invest in a 529 savings plan. There are no limits on age, income, or monetary contributions attached to this college savings account, and contributions are tax-deductible in some states. Just like a Roth IRA, the earnings grow over time and can be used tax-free for qualifying expenses, like tuition and room and board. There are a few downsides, however. Funds from a grandparent’s Would you like to be a Campbell Wealth Management Ambassador? Would you like access to exclusive CWMAmbassador events?

All you have to do is refer a friend. Do you know someone who: • Wants to be better prepared for retirement? • Is looking for a second opinion regarding their portfolio? • Has gone through a major life event (death of a spouse, retirement, etc.)? Call us at ( 703) 535-5300 and let’s set up an introduction! If they are important to you, they are important to us.

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CampbellWealth.com (703) 535-5300 330 John Carlyle St., Suite 400 Alexandria, Virginia 22314

Inside

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Weathering the Storm Tips for Fighting Free Radicals

Preparing Your Finances for Recession 3 Strategies for Helping Grandkids Pay for College Become a Campbell Wealth Management Ambassador! Learn About Your Gut-Brain Axis

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Securities offered only by duly registered individuals through Madison Avenue Securities, LLC (MAS), member FINRA/SIPC. Advisory services offered only by duly registered individuals through Campbell Wealth Management, LLC (CWM), a Registered Investment Advisor. MAS and CWM are not affiliated entities.

THINKINGWITH YOUR GUT THE AMAZING CONNECTION BETWEEN YOUR STOMACH AND YOUR BRAIN

While it may seem strange to think about, the human stomach is truly a thing of wonder. Most humans only acknowledge its digestive processes, but

information to your gut about excitement and anxiety, your gut can have a direct impact on the way you feel. According to a recent study published by the National Library of Medicine, when a person’s microbiome — the diverse population of good and bad bacteria living in the GI tract — becomes significantly altered or imbalanced, psychological or neurological issues can arise. In response to these emerging findings, dietary approaches and probiotics are being explored to see how well they can modulate a person’s microbiome and address symptoms. While research is still being conducted to determine the extent of the stomach’s influence over emotional and mental states, plenty of evidence proves the connection is real. Your stomach “talks” to you all the time, and, if you didn’t have enough reasons to pay attention to the food you eat, now you have one more thing to keep in mind. If you start thinking a bit more with your gut, your health will thank you for it!

the gut plays a much more influential role in our day-to-day lives than simply breaking down food for nutrient production; it is closely connected to our emotional states, as well. Think about it. Have you ever felt butterflies before a date, intestinal pain during moments of stress, or nausea before an important presentation? Have you ever told someone to “follow their gut” before making a big decision? These physical symptoms are not a coincidence; they are known in the scientific world as the gut-brain axis . Your gut is connected to the limbic system, the part of the brain that processes emotions. The brain sends messages to all other organs in your body, so it’s not surprising it communicates with your stomach, too. What is surprising, however, is that the connection goes both ways. Just as your brain can relay

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