Which History Matters?

June 05, 2015

Risk is something most people want to avoid.For that reason, and with 2008’s stock market crash and a lot of talk about today’s market being at or near all-time highs, I am seeing people re-evaluating the level of investment risk in their 401k’s. One trend that is a bit troubling is going on with young employees in their 20’s and 30’s who entered the workforce or were relatively new hires when the 2008 collapse happened. Many of these employees are shunning investment risk at perhaps the expense of their future financial security. Continue reading “Which History Matters?”

Three Investment Terms You Should Know

April 22, 2015

Have you ever noticed how different words mean different things to different people? The other day I was talking with a helpline caller who was looking for a way to invest their retirement funds such that they couldn’t lose money and could draw an income from it in the future. When I mentioned the word “annuity,” they immediately had a negative reaction as they were lead to believe all annuities were bad, which seemed ironic considering that’s exactly what they just described they were looking for. When it comes to investment terminology, not understanding the meaning of a word can be a financial mistake. Here are three investment terms that are frequently used but often misunderstood: Continue reading “Three Investment Terms You Should Know”

Do You Understand Your Advisor’s Recommendations?

April 21, 2015

I recently spoke to a friend who wanted to ask my opinion about her current financial advisor. Knowing that I have a slight addiction to chocolate, she offered me her homemade Godiva Hot Chocolate with a chocolate coated bottom for my trouble. Of course I would have offered my opinion at no cost, but who am I to turn down her homemade hot cocoa? As I listened, she started to describe how she was referred to him though a family friend so she did not feel the need to do a background check or ask him questions about how he gets paid. She took it on faith that if her family member recommended him then she would be fine. Continue reading “Do You Understand Your Advisor’s Recommendations?”

All You Need To Know About Investing In 3 Simple Steps

April 16, 2015

Whenever I talk to people about investing, I find that most people fall into one of two groups. One group feels that investing is too complicated for them so they want to hire a professional to manage their money for them. The other group is make up of active investors who try to time the market with statements like “I think the market is too high to get in right now” or “I’m going to wait for prices to come down before I buy” and/or pick stocks or actively managed funds that they think will outperform the market. The problem is that there’s no evidence that market timing or even actively picking stocks really works (unless monkeys or cats are doing the picking). If the vast majority of professional money managers continue to underperform the market with these methods, do you really think you can in your spare time? Continue reading “All You Need To Know About Investing In 3 Simple Steps”

What A Lost Cell Phone Can Teach Us About Investing

February 25, 2015

Earlier this year, my boss shared with us her story of how she dropped her phone behind her bed. Her first thought since the bed was basically against the wall was to move the bed…in her words “bad idea.” After some time (and a little pain medicine), she took a second approach: use a hanger from the side to pull it out….again, “No dice.” (She thinks she actually made it worse by pushing it further out of reach.) Continue reading “What A Lost Cell Phone Can Teach Us About Investing”

The Gym Rat’s Guide to Investment Terms

February 12, 2015

Investing and the financial world in general can be pretty confusing. There are a lot of terms you may not know and concepts you may not be familiar with. It can even start sounding like another language! Continue reading “The Gym Rat’s Guide to Investment Terms”

Should You Buy Life Insurance as an Investment?

January 08, 2015

Should you purchase a whole or universal life insurance policy as an investment? We recently received several questions on our Facebook page on this topic so there seems to be a lot of confusion about it. On the one hand, many agents over-sell these policies as a way to earn big commissions. On the other, they can make sense for certain people. Let’s take a look at some guidelines to use to see if it makes sense for you: Continue reading “Should You Buy Life Insurance as an Investment?”

What’s Your Real Risk Tolerance?

October 23, 2014

With panic sweeping the stock market, it’s time to check your risk tolerance score. (You did take a risk tolerance quiz like this before investing your money, right?) The whole purpose of determining your risk tolerance is to use it as a guideline to create a mix of investments that you can “tolerate”…in other words, that you won’t bail out of during times like these. After all, if you do bail out and fail to get back in the market in time (and if you figure out a way to time the bottom, please let me know), you’ll miss the eventual recovery and turn a temporary loss into a permanent one. Continue reading “What’s Your Real Risk Tolerance?”

How to Minimize Your Investment Costs

October 09, 2014

In my last 2 blog posts, I discussed the various ways financial advisors can be paid and how they can present conflicts of interest to an advisor. But how would your actual investment returns be affected? Let’s take a look at some scenarios: Continue reading “How to Minimize Your Investment Costs”

Should You Use a Commission Based Advisor?

September 25, 2014

When it comes to getting advice with your money, are you suspicious of financial advisors? How can you find one that you trust? We received another question from our Ask a Planner campaign on Facebook last week asking “Is Edward Jones looking out for the best interest of clients? Is it best to rather use a fee based CFP®?”   Continue reading “Should You Use a Commission Based Advisor?”

When Should You Sell Your Mutual Fund?

September 18, 2014

As the stock market reaches new highs, have you been wondering if you should sell and take profits before the next eventual dip? If the stock market does take a dip, should you sell and cut your losses? With the launch of our “Ask a Planner Week” on Monday, here was the first question we received: “I have absolute percentage rules for taking profits and losses on individual stocks. When should one consider taking profits or losses on index funds?” Continue reading “When Should You Sell Your Mutual Fund?”

What Baseball Can Teach Us About Investing

July 09, 2014

This weekend, I watched my nephew play in a baseball tournament.  They played very well in their first game, outscoring their opponent by more than ten runs.  They played well in their second game too but an unfortunate mix up in fielding assignments when there were two outs cost them two runs late in the game that proved to be the difference. It was a hard loss and for the next few days, all I could think about was that one play. If only they had made that play they would have gotten out of the inning with the lead and quite possibly won the game. Continue reading “What Baseball Can Teach Us About Investing”

Online Investment Platforms: Wave of the Future or a Passing Fad?

July 07, 2014

Last week, we looked at how the asset allocation process doesn’t have to be an overwhelming task and that a variety of options exist to create a diversified portfolio.  As we continue to examine different ways to create an investment plan that matches your life goals, it is important to understand where you can turn to for asset allocation guidance.  After all, financial literacy research studies demonstrate that most people do not have the financial knowledge and confidence to manage their own investments. Continue reading “Online Investment Platforms: Wave of the Future or a Passing Fad?”

Is Robo Advising Right For Me?

July 02, 2014

There’s been a lot of buzz recently on the idea of investors using robo-advisors to manage their investment portfolios rather than human advisors.  If you are not familiar with the term, a “robo-advisor” is an online financial advisory service that uses a basic investment philosophy to create software programs that can manage a person’s investment portfolio automatically.  The argument for using this type of approach rather than a human advisor goes something like this: if an investment portfolio using fundamental investment strategies can be implemented automatically with a computer, then why pay for human involvement? Continue reading “Is Robo Advising Right For Me?”

Are You Choosing the Right Investments in Your 401(k) Plan?

June 30, 2014

It can be hard to figure out if the investment selections within your retirement plan investments are a good fit for your personal goals. The concept of diversification is usually represented by the phrase “don’t put all your eggs in one basket.” It makes perfect sense but how do you know which baskets are the best fit and how much do you put in each basket?  Continue reading “Are You Choosing the Right Investments in Your 401(k) Plan?”

Lessons from the World Cup About Diversification

June 16, 2014

The 2014 World Cup started with a bang on Thursday with the host nation Brazil beating Croatia in a somewhat less than convincing fashion.  National pride and hope is growing in the host nation of Brazil and across the globe with 32 nations vying for the World Cup trophy.  Like many American soccer fans, I’ve enjoyed watching other countries play the past few days… but now the real fun, stress, and patriotism begins.  The United States takes on Ghana today.  Continue reading “Lessons from the World Cup About Diversification”