The Good, the Bad, and the Ugly: The Best & Worst Investment Decisions I’ve Ever Made

July 10, 2013

With some of the recent stock market volatility, a common question seems to be emerging from the employees I speak to in workshops, webcasts, and consultations: where is the best place to invest these days? Believe it or not, even as a financial professional who has been in the industry for nearly 19 years, I still don’t know the answer to that question. The truth is, like many of you, I’ve had my share of good investment decisions and bad ones.  What I can tell you is that we learn from experience so allow me to share my experiences with you in the hope that you don’t repeat my bad decisions and perhaps follow in my good ones instead. Continue reading “The Good, the Bad, and the Ugly: The Best & Worst Investment Decisions I’ve Ever Made”

Following the Herd to My Worst Investment Ever

July 09, 2013

Back in early 1999, as Internet stocks were all the rage, I invested that year’s Roth IRA into the Putnam New Opportunities Fund, which had double digit returns for their 1 and 3 year historical performance. Now, I know past returns don’t indicate future performance,  and I also had that little voice in the back of my mind that was saying it was too good to be true, BUT the Putnam wholesaler had recently visited my office and was saying how hot the fund was, and as a broker myself, I was able to buy in at NAV, meaning I didn’t have to pay the front end sales charge. I couldn’t resist.  Continue reading “Following the Herd to My Worst Investment Ever”

My Best and Worst Investment Decisions Ever

July 08, 2013

If you are considering working with a financial advisor, you need to ask some important questions when deciding if a professional is qualified to help you reach your financial life goals. Last year, I was asked a simple but powerful question that appeared in an interview for a Forbes.com article.  It was actually a two part question that was framed as things that everyone should ask their financial advisor.   Continue reading “My Best and Worst Investment Decisions Ever”

Will Your Stock Be Gone in 18 Months?

May 31, 2013

I have always enjoyed reading about predictions. It happens a lot at the end of one year and the beginning of another. I usually print a few of them out, put them in a folder, forget about them for a long time and then look at them a year or so later as I’m printing out a new set. One of the articles from last year turned out to be relatively accurate. When I read this article, it took me back to last year’s article and the writers have a methodology that I’m sure will keep me reading their predictions each year. Continue reading “Will Your Stock Be Gone in 18 Months?”

Is the Stock Market Too High to Invest?

May 23, 2013

Usually when I talk about investment mistakes, I refer to what is known as the “greed, hope, and fear” cycle. This is the well-known tendency of investors to invest more aggressively when the stock market is doing well, hope it will come back when the market begins its inevitable downturn, and then eventually sell near the bottom out of sell fear. Investors are then typically reluctant to get back in until things “settle down,” which means when the market has gone up for an extended period of time and is possibly nearing another high point. This causes investors to buy high and sell low, the opposite of what you want to do.   Continue reading “Is the Stock Market Too High to Invest?”

Is Your Investment Portfolio Missing a Key Ingredient?

April 22, 2013

Do you have a written plan in place to guide your investment decisions? If not, how will you know if your investment plan is on track to meet your financial life planning goals? An excellent way to make sure that you follow an investment plan and have a measurement stick in place to track your progress is to setup an investment policy statement. Continue reading “Is Your Investment Portfolio Missing a Key Ingredient?”

The Stock Market’s Going to Go Down…Unless it Goes Up

April 19, 2013

A question I get asked a lot lately is what I think the stock market is going to do. We are near (or at, depending on when you read this) all time highs in the stock market. 401k balances are rising. Stock prices have risen pretty quickly. A client company of ours has seen its stock rise from $40 to $56 per share in the last several months. Things look great and when I turn on the financial networks, many of the “experts” are predicting a strong market for the next several years. And, that scares people…. Continue reading “The Stock Market’s Going to Go Down…Unless it Goes Up”

Should You Jump on the Bitcoin Bandwagon?

April 18, 2013

Last week, I was asked what I thought about investing in the new digital currency  “bitcoin.” This got me thinking about what successful investors do in general when deciding what to invest in and how to make a rational decision as opposed to being caught up in a herd mentality. Here’s a great process to go through before investing your hard earned dollars in the latest investment trend (or fad): Continue reading “Should You Jump on the Bitcoin Bandwagon?”

Where to Invest Short Term Money

April 17, 2013

We recently got this question on our Facebook page: “I am looking for short term investment strategies, 4 to 7 year span for some inheritance money that would then be liquidated to pay for college.” It’s a common question. After all, with interest rates near record lows and the stock market as volatile as ever, it can be tough to figure out what to do with money you need in just a few years.

First, let’s look at what NOT to do. Continue reading “Where to Invest Short Term Money”

When It Comes to Investing, Don’t Just Follow the Money

January 16, 2013

This week, USA Today came out with an article on how more money poured into stock mutual funds in the last week than any other week in the last eleven years.  Now at first glance that may come as good news as investor confidence seems to be returning in the wake of a resolution to the fiscal cliff dilemma, but before you jump on the stock market bandwagon, remember the words of renowned investor Warren Buffett.  When asked about his philosophy on investing, he is known to have said he is greedy when others are fearful, and fearful when others are greedy.  In other words, Warren Buffett, one of the greatest investors of all time, has a tendency to go against the flow when it comes to investment decisions. Continue reading “When It Comes to Investing, Don’t Just Follow the Money”

Investments That Survived the Fiscal Cliff

January 07, 2013

We are still here.  The Mayan calendar ended December 21, 2012 but fortunately we didn’t.  The fiscal cliff hung over into the wee hours on New Year’s Eve but was averted so taxpayers making less than $400k are breathing a sigh of relief that their income taxes aren’t going up — only the payroll taxes are going back to 6.2% (an increase of 2%). This is certainly good news for most Americans but it gets better. Dividends and capital gains tax rates were also saved from the fiscal cliff – they stayed the same for most Americans. Continue reading “Investments That Survived the Fiscal Cliff”

Why You May Be Wrong About Your Retirement Time Horizon

November 15, 2012

I recently received a question from someone who was using our risk tolerance profile and asset allocation worksheet and noticed that the worksheet’s guidelines were to have 0% in stocks since his time horizon was less than 5 years away while his target date retirement fund had 40% in stocks. While there are differences between the asset allocations of various models and target date funds, that gap was pretty stark. So who was right? Continue reading “Why You May Be Wrong About Your Retirement Time Horizon”

What to Do With $100,000 in Today’s Economy

October 29, 2012

I actually get this question quite a bit on our financial helpline and in our worksite financial planning sessions, not so much that someone got an inheritance (though I did get that last week), but many people simply want to know how they should allocate their assets in their own 401(k).  The question doesn’t have a quick and easy answer and answering involves asking a series of questions first because investing starts with you – the investor. Obviously, an aggressive investor is going to have a very different investment mix than a conservative investor.  A fifty year old may have a very different investment mix than a twenty year old no matter what the current economic outlook.  Here are some questions I always start with: Continue reading “What to Do With $100,000 in Today’s Economy”

Should You Invest with a Commissioned Broker? Maybe

September 20, 2012

I recently had dinner with a friend of mine who just got  a job working for an investment brokerage firm. Yes, that means she’s going to be one of those commissioned brokers that I’ve warned so much about. (If they work for a brokerage firm, they’re a broker even if they call themselves something else.) Ironically, she was looking for some advice from me in getting clients and building her business. Did I tell her to forget it and join a fee-only financial planning firm? No. In fact, there are some very good reasons why an investor could be better off with a broker than one of the many fee-only advisers she’s competing against: Continue reading “Should You Invest with a Commissioned Broker? Maybe”

Point One Percent Interest in a Savings Account? How to Do Better!

September 17, 2012

It makes me sick to my stomach to see to see my savings just sitting there earning point one percent interest – not one percent mind you but point one. On the other hand, this is my “safe” money.  These are funds I don’t expect to use but need to have a principal guarantee and want to have some access to in case of a job loss or some major emergency.  The funds can’t be invested in stocks due to the fluctuation of principal, and if there is any chance I might need the funds in a year, it’s the absolute worst time to buy bond funds with interest rates being so low. Continue reading “Point One Percent Interest in a Savings Account? How to Do Better!”

The “Secret Sauce” Behind Successful Investing

August 24, 2012

Much to the chagrin of dentists everywhere, Tootsie Roll has been a staple of the candy business for a very long time.  This article talks about the Tootsie Roll Company being a very secretive organization. (And we thought it was just the CIA that operates in relative secrecy)!  Tootsie Roll doesn’t give tours, they don’t give interviews to analysts and they don’t operate with much transparency. It’s as if they have some magical mystery formulas that they don’t want the rest of us to know. Continue reading “The “Secret Sauce” Behind Successful Investing”

6 Tips for Making the Best 401(k) Investment Choices

July 18, 2012

Investing for retirement can be an intimidating undertaking. Setting aside money in your 401(k) plan is difficult enough, but determining how to invest it presents its own set of challenges. The good news is that you don’t need to be a seasoned, savvy investor in order to make the right choices. In fact, once you determine your risk tolerance and know what to look for in a fund, picking the right one is largely a process of elimination. Continue reading “6 Tips for Making the Best 401(k) Investment Choices”