When Enough is Enough

March 07, 2012

After my stepfather passed away, my mom started working with a local bank to manage her investments.  At the time, I was living in California and it was difficult for me to help her with investment decisions.  Plus, I had always warned my clients that allowing family members to get involved in your investments was a bad idea because you could always fire a stranger but you can never fire a member of the family.  It was with this in mind that I allowed her to continue this relationship despite my occupation as a financial planner. Continue reading “When Enough is Enough”

How to Turn Your Investment Lemons Into Lemonade in the Next Two Days

December 29, 2011

We usually wait until April 15th to worry about taxes, but the time to do something about them is mostly well before that. Some examples include contributing to your employer’s retirement plan and flexible spending accounts. But there is also one thing that you can do right now if you have investment losses outside of your retirement plan.(I know I do and if you have any taxable investments, you probably do too). Here’s how you can turn losses into extra cash on April 15th: Continue reading “How to Turn Your Investment Lemons Into Lemonade in the Next Two Days”

The Truth About Target Date Funds

November 11, 2011

I read this article on Bankrate.com about investors’ belief that target date funds come with a guarantee of a sufficient retirement income. The statistics are a little bit startling (51 percent — of people investing their retirement savings in target-date funds see them as a retirement planning panacea and think that putting their money in them guarantees their retirement income needs will be met), frightening even, from the perspective of a financial planner. The conclusion of the article is: Continue reading “The Truth About Target Date Funds”

A Bear Market is Your Friend

November 07, 2011

A friend of mine posted this comment on Facebook last week “Yeah!  The market is up 345 points! Finally it is going in the right direction.”  Well, I was NOT happy at all to hear this news.  You see, that day (Thursday October 27th) was the day our company made its annual contribution for all of our employees – the employer matching contributions to everyone’s 401(k). I was certainly happy to receive a company contribution but not so happy about the timing. Because mutual funds pick up the end of day pricing, that means everyone in our company received a contribution to their 401(k) AFTER the market went up that day.  If the contribution had been made a day earlier, all of us who invest in stock funds would have been over three percent richer. Continue reading “A Bear Market is Your Friend”

3 Smart (and Not So Smart) Tax Decisions by Retirees

November 04, 2011

In my blog last week, I talked about how looking at the future of tax policy may be an interesting hobby (especially if you’re a geek like me!), but that it really isn’t all that useful in the present.  But, there are things that are important to look at when it comes to today’s income tax situation.  I don’t want to minimize the impact of paying attention to taxes; it’s just a matter of learning which situations are high impact situations. Continue reading “3 Smart (and Not So Smart) Tax Decisions by Retirees”

Make Your Nest Egg Last as Long as You Do

October 20, 2011

Once you’ve saved and invested for financial independence, the final step will be figuring out how to turn that nest egg into an income stream that will last as long as you do. With people living longer and longer, this can be a challenge for all retirees but is especially difficult for anyone looking to retire early. There’s even a good chance you’ll live longer in retirement than you did working.
Continue reading “Make Your Nest Egg Last as Long as You Do”

Searching for the “Holy Grail” of Mutual Funds: Less Risk and Higher Returns

October 13, 2011

In the last few blog posts, we discussed the danger of the “greed, hope, and fear cycle” (in which people tend to earn below average returns by buying high and selling low) and some ways to overcome it by diversifying and rebalancing your portfolio to earn the average return. But what if you were to actually buy low and sell high?  Could you actually earn the “holy grail” of higher returns and lower risk that way? Continue reading “Searching for the “Holy Grail” of Mutual Funds: Less Risk and Higher Returns”

Taking Stock of Options and Awards

October 11, 2011

I recently spoke to a freshly minted MBA graduate who was so thrilled to have had landed her first job in this tough job market, but her icing on the cake was a sign-on bonus equal to ½ of her first year’s salary.  The catch to the bonus was that it was given to her in the form of a restricted stock award, so she had called me to find out the details.  She was very confused, because in addition to the stock award for the bonus, she is also eligible for a restricted stock matching program AND stock grants. Continue reading “Taking Stock of Options and Awards”

The Investment Strategy That Actually Made Money in 2008

October 06, 2011

Last week, I wrote about some common ways to diversify your investments and make sure you don’t get caught up following the herd into the vicious “greed, hope, and fear” cycle that can lead to buying high and selling low. But even if you followed one of those strategies, you still probably haven’t been too happy with your portfolio’s performance lately. Your “early retirement plan” may have started looking like the “never retirement plan.” Is there a way to earn that 8-10% average return without all that risk? Continue reading “The Investment Strategy That Actually Made Money in 2008”

Simple Strategies for Investment Success

September 29, 2011

Last week, I shared some pretty sobering numbers about how little the average investor has actually been earning in the stock market over the last 20 years. This is largely because investors tend to jump in and out of the market at the worst possible times, reacting largely based on emotion.

The good news is that there are some pretty simple ways to avoid this fate. Continue reading “Simple Strategies for Investment Success”

You Have HOW MUCH of Your 401(k) in Company Stock?

August 23, 2011

With the recent roller coaster ride of the stock market, many employees have taken a closer look at their asset allocation within their retirement plans, and to the surprise of many, they find their investment strategy is way off base. Continue reading “You Have HOW MUCH of Your 401(k) in Company Stock?”

You’re Fired: The (Financial Advisor) Apprentice

June 22, 2011

I’m not a big fan of reality TV shows, but I have to admit that I enjoy watching The Apprentice.  What I think I enjoy most about the show is the no-nonsense way Donald Trump approaches the decision of who to fire.  He doesn’t look at how hard they try, how smart they are, how they dress, or what school they went to.  In the end, it simply boils down to getting the job done. Continue reading “You’re Fired: The (Financial Advisor) Apprentice”

What Should I Consider for My Bond Funds if Interest Rates Rise?

May 19, 2011

A question I seem to be getting lately is how I can hedge my bond investments against a rise in interest rates.  For most investors, a diversified portfolio will hold either individual bonds or more often than not, bond mutual funds.  Where the dilemma exists is that in general when interest rates rise the current value of bonds goes down.  Now for those investors who hold individual bonds, as long as the bonds are held to their respective maturities the loss of value will be on paper only.  But what happens in a bond fund where there are many different bonds with different maturities?  Let’s take a look at what often happens: Continue reading “What Should I Consider for My Bond Funds if Interest Rates Rise?”

Should I Consider ETFs in My Portfolio?

April 28, 2011

Lately in my live workshops I have been getting these two questions, “What are ETFs?” and “Should I consider them for added diversification?”  These are good questions and tell me more people are educating themselves about different financial instruments and that they want to know whether something makes sense for “them” and not blindly investing because everyone else at the office is what I affectionately call “lemming investing.”  So let’s see if I can shed a bit of light on the two aforementioned queries. Continue reading “Should I Consider ETFs in My Portfolio?”

Dividends Aren’t Enough

April 18, 2011

Dividends are a beautiful thing.  Last week I wrote about my mother-in-law’s bond fund that paid her a steady stream of dividends over the years – twenty five years to be exact.  Every month, the dividend came like clockwork and she spent it.  Now she is using the funds to pay for her care – she is 97.  This strategy worked for her because she has other funds invested in other types of vehicles.  Here is the problem with using the dividend strategy as the only strategy—even if the dividend doesn’t increase, the cost of goods and services do.  So the dollar buys less and less each year. Continue reading “Dividends Aren’t Enough”

I Just Bought My First Investment Property, What Should I Watch Out For?

February 24, 2011

Well this blog closes out my “series” on investment property and I find it fitting that I share some of the frustrations, missteps as well as some of the successes we have encountered in our first investment deal.  Now I have to let you know that this is only our experience and what my wife and I went through is certainly not always the case, but if I can pass on some things we have learned so that you can be aware then this blog will serve its purpose.  If not, well at least it gave me an opportunity to hone my writing skills! Continue reading “I Just Bought My First Investment Property, What Should I Watch Out For?”

Social Security as Your Bond Portfolio?

October 29, 2010

As someone who has a moderately aggressive investment approach, I had a conversation with a friend who has a very aggressive investment approach (in my opinion) and he has made me rethink a piece of my own investment philosophy.  I thought I’d share the conversation and see if anyone wants to add their opinion into the debate.  My friend is just about 50 years old and has always been an aggressive investor. Continue reading “Social Security as Your Bond Portfolio?”

Be Careful of Mistakes! Don’t Let it Be an Option

October 07, 2010

One of the investments I occasionally employ is options.  If I believe a stock is going to go up or down in the short term I will purchase the “option” to buy or sell the stock at a certain price.  Now I never actually hold this option until it expires, I will sell it – hopefully at a gain.  So why am I telling all of you about what I do?  Because I want to highlight the importance of sticking to investment fundamentals and what can happen if you forget, even one time.

In the midst of the banking crisis I saw a company that I felt would benefit in the very short term as far as its stock price.  Continue reading “Be Careful of Mistakes! Don’t Let it Be an Option”