Money Minutes for Doctors #12 - Market Updates

The market is up…the market is down…the sky is falling…the best year ever!!

Welcome back to our monthly financial podcast, Money Minutes for Doctors. This month we talk with Ms. Katherine Vessenes, JD, CFP®, RFC, Founder and President of MD Financial Advisors, about the rollercoaster that was the world of finance in 2018 and where the market appears to be headed in the coming months.


About Ms. Vessenes:

Ms. Vessenes works with over 300 physicians and dentists from Hawaii to Cape Cod. Her firm uses a team of experts to provide comprehensive financial planning to help doctors build their wealth and protect their wealth while reducing taxes now and in the future. Katherine is a longtime advocate for ethics in the financial services industry; and has written three books on the subject of investment strategies. She has received many honors and awards including: numerous tributes from Medical Economics as a top advisor for doctors, multiple 5-Star Advisor Awards, honored as a Top Woman in Finance, in addition to being selected to be on the CFP® Board of Ethics. Katherine can be reached at: or 952-388-6317. Her website:

Quick Summary:

By now you’ve probably seen nerve- racking headlines in the news about the stock market.  Not to worry, we wanted to give you a short update to let you know what’s going on and how it might impact your portfolio.

  • Here’s the short version. : In While in 2017, both Emerging markets and International markets were the largest performers in your portfolio, in 2018 they are were the biggest losers. 

  • Bonds are the only positive asset class for 2018, which is a great reminder as to why a balanced portfolio is needed.

Below is a graph of the loss value of $1 in 2018 in the markets for various key benchmarks sectors.  The blue line is the entire US Market, the green is the International markets, and the teal is Emerging markets. You will notice all three were down by the end of December.

2018 Sector Returns


Why are the markets down in 2018?

  • There is never one reason why the market behaves the way it does. Thousands, if not millions of factors, go into changing market prices.

  • Two key things to remember when thinking about stock markets; (1) markets are predictive, meaning they are looking at what’s coming in the future & (2) market prices can be summed up as the present value of all the future cash flows these companies expect to make. Thus, if markets go down, it means the millions of people participating in the market expect the companies being traded on stock exchanges to make less in the future.

Most economists would agree that there are three main reasons as to why the stock market has been down in 2018.

  1. Many economists believe world growth is slowing down.

  2. There is uncertainty as to what central banks will do with interest rates. The largest being the United States Federal Reserve.

  3. Trade uncertainty - There’s a standoff going on b/w China & US.  Multinationals that do business with China are currently evaluating whether they will need to move their manufacturing operations and this uncertainty is causing businesses to wait to spend money.

Avoid Market Timing

  •  We don’t think it benefits you to try and time the market

  • Studies show it is impossible to predict market returns therefore, we highly discourage trying to flee to cash while you wait for a recovery.

What can you do? Control the things you can control.

  1.  Fund a Roth IRA in 1st Quarter - The stock market is currently down, which is perversely good news for savers.

  2.  Switch to a Roth Option at Work in Your 401-k/403-b - Not all doctors have a Roth option through their retirement plan through work, but if you do, we suggest switching to funding a Roth option ASAP. 

  3.  Do a Roth Conversion - If you’ve already maxed out your other tax advantaged savings options and have IRA money that is eligible to do a Roth Conversion, you might convert some funds while the market is lower.

  4.  Review your Risk Tolerance - If the volatility in the stock market is keeping you up at night, it means we should review your risk tolerance again to see if you’re investing with the appropriate amount of risk.

  5. Update Your Retirement Plan - markets should be looked at through the context of your goals and dreams

  6. Save, Save, and Save - When markets are down, perversely this is the best time to save b/c your dollars buy more shares

  7. Have Hope - With proper planning and adjustments you will be fine.

The chart below describes the value of a dollar invested globally from 1970 to 2017 and the impact of world events. Over time the market goes up so don’t let short term set backs derail your long-term goals!