- If you’re lucky enough to have a financial advisor as a friend or family member, you probably have asked them a financial question or two.
- These are the top questions advisors say they were asked this Thanksgiving holiday, and how they answered them.
When it comes to gathering with friends and family over the holidays, etiquette experts usually say that money and politics should be off the table.
That is, of course, unless you’re sitting with a professional financial advisor.
Advisors shared with CNBC the top questions they were asked this Thanksgiving, and how they answered them.
Check out their responses, which may help you, too.
Is it still a good time to buy real estate?
The new higher interest rate environment has made the cost of financing a new mortgage more expensive, which has scared off some would-be buyers and sellers. Those who are sitting on the sidelines are wondering when to find the best opportunity.
“I’m a big fan of marrying the house and dating the rate. Given that there is only 3.6 months of inventory across the country, we are in a bit of a logjam for existing home sales because people can’t justify trading up to a more expensive home given that mortgage rates are at 7.5%. But just remember if you love the home, the odds are you won’t be in the higher rate forever as rates should come down to that 5% to 6% over the next 24 months.”
—Ted Jenkin, certified financial planner and the CEO and founder of oXYGen Financial, a financial advisory and wealth management firm based in Atlanta. Jenkin is a member of CNBC’s FA Council.
“Timing the real estate market, or any market for that matter, is very difficult. And there’s also a difference between buying a home versus buying an investment property. If we’re talking about a roof over your own head, I don’t view it as an investment. Then it comes down to what you can afford to do. Homes might be ‘overpriced,’ but if you can afford to comfortably live in one, who is to say it was a bad decision? … Affording a home is a matter of mapping out what you can afford to save for a down payment and your monthly payment.”
—Douglas Boneparth, CFP and president, Bone Fide Wealth in New York. Boneparth is a member of CNBC’s FA Council.
How will the 2024 election affect the economy?
As the 2024 presidential election approaches, some investors are getting jitters. A recent survey found nearly half of investors — 45% — believe those political contests will have a bigger impact on their portfolios than market performance.
“The election results are unknowable, so my thoughts are to do all the financial fundamentals well and control what you can (debt levels, spending, savings rate, taxes). Regarding the government debt and spending, I am counseling that economic growth will be hindered, taxes will be increased (income, payroll-related taxes and Medicare premiums.) Get spending under control and increase savings where possible.”
—Donald M. Roy, CFP and founder, New England Wealth Advisors in Bedford, New Hampshire.
Are we headed for a recession?
The question as to whether or not an economic downturn is on the horizon has dominated headlines over the past year. That may be a formal recession, defined as two consecutive quarters of falling GDP, or a soft landing.
“It is important to look at the expected severity; not all recessions are severe. This recession upcoming looks to be mild as employment is solid and corporate profits are decent. Recession will be due to Fed making money expensive, not corporate center being week.”
—Donald M. Roy
Is bitcoin a scam?
As headlines show high profile cryptocurrency executives taking the fall for regulatory violations, that has left many investors wondering whether crypto assets, namely bitcoin, are still a good investments.
“Like any new type of technology, bitcoin reminds me of the volatility you take on when you buy an early technology stock. I don’t think bitcoin is a scam, but I do think there are scammers as evidenced with Sam Bankman-Fried when it comes to cryptocurrency. Nobody should have more than a 1% to 3% allocation in crypto, in my view, and it is a seven- to 10-year hold time if you put money in this asset category.”
—Ted Jenkin
Why invest now, with so many geopolitical issues around the world?
As conflict in between Israel and Palestine, as well as Ukraine and Russia, continues, some investors are tempted to stick to the sidelines. Experts say fears about what may happen should not influence your investment strategy.
“Although geopolitical events may introduce uncertainty and market volatility, diversification remains a key strategy for mitigating these risks. We have been through these types of issues many times before. Geopolitical challenges can create investment opportunities, and historical market resilience underscores its adaptability to geopolitical changes. While short-term fluctuations may occur due to specific events, markets generally adjust over time, often experiencing upward trends, particularly for long-term investors.”
—Ashley Folkes, a certified financial planner and managing director at Inspired Wealth Solutions in Birmingham, Alabama.
Is Social Security going bankrupt?
The trust funds that Social Security relies on to pay benefits are running low on funding. In the next decade, benefits may be reduced if nothing is done to fix the situation. But that does not necessarily mean the program is going broke entirely.
“The issue related to the solvency of [Social Security] will need to be addressed as the current path isn’t sustainable. It could be a combination of raising the maximum the maximum limit on earnings for withholding of Social Security (it is $160,200 for 2023 and $168,600 for 2024), increasing the rate of Social Security taxes (currently 6.2% for employees & employers) or delaying the age. I explained to my mom (who is currently retired, and her friends and relatives are, too) that her benefits would not just disappear.”
— Marguerita Cheng, CFP and CEO of Blue Ocean Global Wealth in Gaithersburg, Maryland. Cheng is also a member of the CNBC’s FA Council.
Is there still hope for student loan forgiveness?
The Supreme Court struck down President Joe Biden’s plans to forgive up to $20,000 in debt for federal student loan borrowers. Since then, the White House has worked to identify other ways to provide debtors with flexibility, though those plans may look different this time around. Now that federal student loan repayment has started, some have received inaccurate bills.
“Even if you disagree with the billing, pay as requested then seek an adjustment. It isn’t worth damaging credit and then working to get it fixed. Keep records of all phone calls and chat transcripts.”
—Rob Schultz, CFP and senior partner at NWF Advisory Group in Encino, California.
Are extended warranties worth it?
Consumers making big ticket purchases this holiday season face many choices, including whether they want to opt for an extended warranty. But is the extra protection worth it? Not always.
“In general, I’m not a big fan of extended warranties and not a big fan of trip insurance. In the law of large numbers, less than 1 out of 10 people ever ‘cash in’ or ‘use’ the extended warranty, so you would just be better off skipping it on the whole.”
—Ted Jenkin
