Independent Wealth Management
Who scrutinizes your investments and portfolio managers, designs and tests your retirement and education plan, searches for new investment ideas, patrols insurance agents and mortgage brokers, shows you how to reduce your investment costs and income taxes, monitors your 401(k), promptly responds to your email, provides one monthly statement, day-to-day net performance across all of your accounts and does all of your paperwork so you can retire and enjoy that trip to Italy? We do! (Please contact us for a no cost, confidential consultation.)
Magazine Cover Indicator
An old adage on Wall Street is - "sell when Business Week's cover says buy."
The most famous example of this is the 1979 Business Week cover "The Death of Equities." Some facts from the article: Baby boomers won't save. Gold is a safe long term bet. In retrospect, equities were as inexpensive as they were during the Great Depression…and were on the verge of a historic bull market lasting until 1999.
How could Business Week have been so wrong? We would suggest that it is because the publication's staff does a wonderful job of merely reflecting the conventional wisdom. The editors and staff cannot...
Rafael Velez
in Behavioral Finance
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6 Traits of Successful Investors
What distinguishes the best performing investment managers from the rest? It begins with a strict adherence to deeply held principles and an unwillingness to stray in the midst of all the daily investment noise. We have been able to identify six traits that are common among these managers. Interestingly, these characteristics have proven...
The Enemy of Performance - You!
In our practice, we encounter enthusiastic new investors who devour current editions of Money Magazine, Forbes or the Wall Street Journal in an effort to accelerate their personal learning curve and become more educated about the market. In reality, they may be better off combing through back issues of Psychology Today – because there is considerable evidence that investor behavior is the key determinant to long term results.
5 Tips for the Credit Crisis
Between 2002 and 2007, implied risk faded as central banks flooded the markets with cheap money; allowing capital flows to mask losses while boosting asset values to record levels. Billions of dollars of central bank credit translated into trillions of dollars of leveraged bets elevating all asset classes—real estate, stocks, commodities, and bonds. (Excessive lending against over-optimistic asset valuations is a time-honored recipe for asset price bubbles.) But global market risks, temporarily hidden by cheap credit, have now reasserted themselves with a vengeance.
The Original Dow
“The market was down 50 points today.” When you hear this, people are generally not talking about the broad market, but instead about the Dow Jones Industrial Average (DJIA). Since its creation over 111 years ago, the Dow Jones industrial average has become a widely followed barometer of the stock market, despite its obvious shortcomings such as tracking only 30 stocks.
The industrial average has contained 30 stocks since 1928, when it was expandeded to represent the major industries of the U.S. stock market. But when the Dow Jones industrial average began on May 26, 1896, it contained just 12 stocks. Due to radical changes in the economy since 1896...
Buried Treasure in your 401(k)
More than one client has asked us; "Why am I stuck in my employer’s 401(k) plan? The plan only has only a few or poor investment choices!" In most cases, plan participants are stuck. But check the fine print of your plan, there may be a way out. To learn more, look at the "Summary Plan Description". This is a document you receive when you enroll in the plan and provides all of the details about how your plan works. If you do not have this document, you can request a copy from your human resources department or the plan administrator. It is likely to be available as a PDF file for immediate access.
The provision you are looking for contains the language about "in-service, non-hardship withdrawals." In other words, you want to access your money while you are still working for the company and not because of a hardship such as disability. The ability to make this kind of rollover...
Hint: Build a Solid Core
Constructing portfolios around a core/satellite model is not as new a concept as you might think; large institutional investors have been doing it for years. At the core, you have the diversification, tax-efficiency and low costs of exchange-traded funds. And to potentially boost your returns, a handpicked selection of mutual funds, individual securities and/or separately managed accounts. The “core” index component seeks benchmark performance (a useful strategy to minimize the risk of lagging the market) while actively managed “satellites” seek outperformance.
The Importance of Dividends
Did you know that from 1965 through 1981, the DOW fell by 10%? That’s 16 years – half a working lifetime or an entire retirement for many of us. Remember the lessons of history. Stocks can and do go down for long periods of time. That is why you must include a fixed-income as a counterbalance. It is also why you want to own dividend-paying stocks in your portfolio and want to concentrate on companies that tend to increase dividends year after year.
Identity Theft
Do you use email? Online bill payment? Look at your brokerage account online? Utilize a wireless network at home, work or while traveling? In an effort to protect your personal and financial information, consider the following items...
Retirement Income Studies
You could spend as much time in retirement – 30 or even 40 years – as you have spent saving for it. That is why planning for your retirement savings to generate income is critical. Developing a solid plan and appropriate investments for years of income is well worth your efforts.
