New England Capital Financial Advisors, LLC

"I don't trust the stock market". I've heard that a lot over my 33 year career. It may even be the way you're feeling right now. Did the negative double-digit returns of the S&P 500 at the beginning of the year (which was the worst January in the history of the stock market), only to be followed by a positive double-digit return since mid-February, leave you feeling the same queasiness as riding the Wildcat roller coaster, the oldest continuously operating wooden coaster, at Lake Compounce in Bristol, Connecticut?    As the chart below shows the S&P 500 has a positive return in 27 of the last 36 years. Of course that means we've had nine years of negative returns during that time. The average annual return for the 36 years has been over 11%. But in order to enjoy that 11% return you must have been able to endure an average, temporary, intra- year decline of 14.2%.

With the current low interest rates for mortgages and the present status of the stock market, should you be putting extra payments onto your mortgage and pay it off faster, or should you rather invest that money?  Thanks to a suggestion from a client, we will try to give you some solutions in this article.

First, let’s first start with this case study.  Teddy and Donald Smith recently re-financed their house for $200,000 for a 30 year mortgage at 3.75%.  Their monthly payment for principal and interest and is $926, which does not include taxes or homeowners insurance.   Let’s assume that they make 1 extra payment per year.  By making that one extra payment, they chop 4 years off their mortgage, finishing in roughly 26 years.  Meanwhile, Hillary and Bernie Jones took out the same mortgage, but rather then make an extra payment on the mortgage; they invested that annually for the same 30 years at a 6% rate of return.  For this same example, let’s assume that after the mortgage is paid off, Teddy and Donald save their $926/monthly for 4 year years at 6%, which the results are shown below:

All of us at New England Capital Financial Advisors would like to take this opportunity to wish you and your family a happy holiday season and a very healthy safe and prosperous New Year. It is one of our greatest pleasures to exchange season’s greetings and thank those whose friendship and goodwill are so highly valued.

I’d like to share with you one of the most serious threats to your financial accounts, not only the accounts you’ve entrusted with us at New England Capital, but all your accounts including bank, credit union, and credit card accounts. This threat has nothing to do with the price of oil and gas, potential increases in interest rates or the 2016 elections. Cybersecurity including but not limited to wire fraud, identity theft, email scams, phishing, and social engineering, is increasingly threatening the security of every financial institution worldwide.

For our part at New England Capital Financial Advisors, compliance costs this year is over $100,000 with about half of that figure dedicated to cyber security prevention programs. As part of our fiduciary responsibility to you, we want to educate you on what you can do to help us protect you from this threat. The threats are real but embracing these simple actions can help you protect your identity and mitigate your potential security risks: