Archive for the ‘Wealth Management’ Category
Recently a client asked me why we bother with investing in international markets. After all, the S&P 500 has done quite well in the last year. Indeed, it has outperformed foreign markets three years in a row, and by a huge margin to boot. Take 2014 for example-the S&P 500 was up 13%, while the international markets on aggregate were down 5%.
So why then? Well, let’s look at this table …
Share this:
Share this:
Quarterly Market Review
Posted on: November 18, 2015
As a recap of interesting developments in 2015-Q3 we offer the downloadable link below.
- Equities – US, International, Emerging and REIT Markets were down
- Fixed Income – US and Global Markets were up
- The ‘Best’ Stock Market was Ireland at -1.12%
- The ‘Worst’ Stock Market was Brazil at -33.06%
- Commodities were universally weak with Crude Oil turning in the worst performance at -27.39%
Share this:
[by Russ Thornton] When sharing the initial results of my survey last week, there was a high level of interest in the topic of Social Security.
And here we are, just a week later, with a couple of significant Social Security changes included in Section 831 of the recent budget approved by the House and expected to be approved by the Senate.
These are changes that could cost some of you tens of thousands of dollars in lifetime Social Security benefits.
First, a little history . . .
Back in 2000, a law was passed that included a provision allowing you to apply for Social Security benefits and then voluntarily suspend those same benefits. While adding to the already complex choices involved with Social Security benefit elections, this law unintentionally allowed some couples to “double dip” from their Social Security benefits. Read the rest of this entry »
Share this:
For those who are hard core about learning personal finance, I have this to share with you – Jim Ludwick’s Tweets for the Month. Jim is a hourly fee-only financial planner I respect a lot. His tweets cover a wide range of issues
- Is Wall Street Eating Your 401k Nest Egg?: PBS story: https://t.co/bpRIQVm8Um@asergunina #GarrettMember @SemperFrugalis8:34AM
- Is this a better way to manage your cash? Give a look to this new strategy:https://t.co/kh0t33E0RG @sergunina #GarrettMember4:11AM
- RT @SquaredAwayBC: Gulp. Average costs for dementia care $287,038- far exceeding cancer, study finds https://t.co/B0hmvCbN733:59AM
- Why you should file the college aid FAFSA no matter how rich you are:https://t.co/DVECFK2ceh @asergunina #GarrettMember3:58AM
- 7 scams that might affect you: https://t.co/biOGBqLSzK3:51AM
- RT @ASergunina: RT @Forbes: If your employer offers a Roth 401(k), consider it, especially if you’re on the younger side: https://t.co/pxTt…3:48AM
- Advantages of working with a remote financial advisor. My latest blog:http://t.co/v6GHi7od4i #GarrettMember @ASergunina @SemperFrugalis6:51AM
- @united typical: canx; 14 hrs later delayed; arrive early sit on tarmac; now late; connect Read the rest of this entry »
Share this:
When Accident Happens …
Posted on: October 13, 2015
A few months ago, a senior client of mine slipped and fell in his basement. He broke his hip and couldn’t get up to call help. He was only found lying in the basement by his tenant two days later.
His life was saved, but he is permanently wheelchair bound and he will need nursing care that costs over $150k per year. This expense alone will run down his personal wealth in a matter of a few years.
As his financial advisor, what could I have done for him?
Three years ago when he was just retired from work, he approached me for retirement planning. Upon hearing that he was living by himself and his children were far way, I was adamantthat he bought long-term care insurance. It was costly, over $500 per month in premium. He was very reluctant to “waste” money on insurance, but I was adamant.
For seniors, a major cause for the need of long-term care is slip and fall at home. I was even trying to talk him into selling his townhouse that has two flights of stairs. That was a long shot, but about buying long-term care insurance, I just would not relent. Read the rest of this entry »
Share this:
For those who are hard core about learning personal finance, I have this to share with you – Jim Ludwick’s Tweets for the Month. Jim is a hourly fee-only financial planner I respect a lot. His tweets cover a wide range of issues…
- Calculate your life insurance needs (capital analysis) on this website:http://t.co/FepufsO9wf #GarrettM
ember @ASergunina @TheEdsonMiller8:09AM - Rating the rater: @Ritholtz writes about Morningstar’s 401k company options and how they could do better: http://t.co/ZrKxZBSZDY @ASergunina3:39PM
- NFL player makes millions, lives on $60,000 a year RT @MarketWatchPF:http://t.co/X6ld4FF7fr @ASergunina @TheEdsonMiller @LauraScharr4:47PM
- Most popular tweet this year? Tennant screening guide for landlords fromhttp://t.co/R0e8aiZGoH: http://t.co/jmq4ELCJiK @YuriSergunin4:35PM
- Equity Indexed Annuities or Fixed Index Annuities earn regulator alert:https://t.co/rT3GviYndA @ASergunina @TheEdsonMiller5:04AM Read the rest of this entry »
Share this:
Two days ago, Greek voters said “No” to the term of EU bailout in a national referendum. Yesterday, the Shanghai Stock Index fell another 5.9%. Cumulatively, the index has fallen 30+% since reaching its peak in June 12. Which of these two events will likely be the black swan that rocks the US market.
I don’t think it will be Greece. The Greek economy is a mere 1.7% of the total EU. It’s basically a rounding error. When the first act of this Greek drama was played in 2011, the US market promptly dropped 19%. That was a wealth destruction ten times the size of the entire Greek economy. This just shows the fear of a disaster can be much worse than than disaster itself. Now that we are in the third act of this Greek drama, global markets are more or less immune to it.
China is an entirely different matter, and it has a potential to become a black swan … Read the rest of this entry »
Share this:
Teaching My Kids About Money
Posted on: July 3, 2015
If you are a client of mine, you would have received a snail mail newsletter from me about two weeks ago that does not look quite right: The letter may look like it was folded clumsily, there might even be some water stains on the letter, the stamp may not be placed squarely on the upper left corner of the envelop. I let these unprofessional newsletters go out, because they were stuffed by my two sons: one six year old, the other mere three.
I want to teach them a lesson about money, so I promised I would pay them once they get the job done. The two boys were super excited since this was the first time they made money. The older one listened very intently as I instructed him what do. What impressed me is that he then created a work process and splited the tasks between himself and his younger brother. He also made himself a little manager by making sure the younger brother follow his process.
After the job was done, I gave the older one a $5 bill and younger one a $1 bill. The older one immediately tried to figure how long it would take for him to afford his own iPad. The younger one apparently did not know the difference between $5 and $1 and he was just happy he was getting as much as his older brother.
Share this:
What If the Market Falls 30%?
Posted on: June 19, 2015
Ever since it touched bottom on March 9th, 2009, the market has been going up and up and up with barely any hiccup. That’s dangerous! Because our minds could get complacent. That’s why I want to do a mental exercise with all of you: What would you do if the market fall 30%?
First of all, recognize these two important facts:
- Market fall of 30% and above happened every ten years or so. If we use history as a guide, we should expect a 10% odds of that happening over the next 12 months. (So don’t be surprised.)
- All market tumbles of that magnitude were recovered within 18 months in the US. (So don’t despair.) Read the rest of this entry »
Share this:
Jim Ludwick’s Tweets for the Month
Posted on: May 1, 2015
For those who are hard core about learning personal finance, I have this to share with you – Jim Ludwick’s Tweets for the Month. Jim is a hourly fee-only financial planner I respect a lot. His tweets cover a wide range of issues …
- Things people in the Finance business don’t want you to know from @awealthofcs: http://t.co/xptc6UzSs011:40AM
- Tax season is over but we’re still working for Uncle Sam say Dan Caplinger via @TheMotleyFool: http://t.co/FyttD7jHhy6:45AM
- @Dull_Investing compiles list of 10 financial tips for kids from top experts and himself via @AARP: http://t.co/WQiZFMY4gQ11:40AM
- @RickFerri argues that ETFs are not the total solution to passive investing in his latest blog: http://t.co/x9R91M5kcr8:34AM
Share this:
Why I do what I do …
Posted on: April 22, 2015
Recently I have a new client. As part of the onboarding process, I examined her old portfolio and found something I don’t recognize:
| Cusip | Symbol | Description | Return |
| 25190A104 | N/A | Deutsche Bk AG London BRH Ret Opt Secs Lkd Ishare MSCI Mexico Capped | -21.15% |
| 25190A203 | N/A | Deutsche Bk AG London BRH Ret Opt Secs Lkd Ishare Euro STOXX 50 Idx | -26.60% |
| 90273L815 | N/A | USB AG London BRH Notes Five 15 | -22.30% |
What they have in common is they don’t have a symbol, meaning they are not publicly traded securities, they have weird descriptions and they all lost a lot of money.
Share this:
Six years after the collapse of the stock market, I must say I begin to see signs that people are forgetting the lesson:
- Some of my clients are pressuring me to increase allocation to stocks.
- The US stock market has done better than others, and some of my clients are questioning why bother with global diversification.
- I have seen portfolios (not managed by me of course) where 90% of money is allocated to US growth stocks.
Recently, Independence Advisor, LLC produces a fabulous video explaining the behavior of investment returns. It’s only five minutes long. Whether you are my clients or not, please watch it in its entirety, then you will understand why I always act as a dampener of emotions. Whether it’s fear or enthusiasm, I would always counsel not to get carried away.
If you want to find out how I can help you, schedule a Discovery review with me. If you are not ready, you can still get my white paper for free: The Informed Investor: 5 Key Concepts for Financial Success.
Get informed about wealth building, sign up for The Investment Scientist newsletter
Share this:
When Tragedy Strikes
Posted on: January 3, 2015
A few weeks ago, I got a call from a client of mine. She told me with great sadness in her voice that her husband just passed away unexpectedly.
Without much thought to my schedule, I told her I would visit her on Friday, a mere three days away. During the next two days, I moved my appointments around to clear up a whole day, and then I booked a round trip ticket and a rental car.
On Friday, I set out early on the trip and got to her place by noon. When I met her, I saw a middle-aged woman in deep grief and distress. I couldn’t help but give her a big hug, and she wept on my shoulder for a while.
Share this:
I met a couple today (who could become my clients.) The husband is a medical specialist who has been making close to $1mm a year, the wife is a psychologist who was making peanuts. They are both retired now and planning to claim social security incomes.
To maximize their incomes, there is a little-know “File and Suspend” strategy they can use. Here is the gist of it according to Kipinger.
Say you are the higher earner and want to delay until 70. If your wife is 62 or older, she could collect her own benefit — but perhaps she’d get more money with a spousal benefit. One catch: She can’t collect a spousal benefit until you file for your own.
As long as you’re full retirement age, you file for your benefit and your wife applies for a spousal benefit. You ask Social Security to suspend your benefits. Your wife will still receive a spousal benefit, and you can continue to accrue delayed retirement credits until you reapply for benefits, presumably at age 70. Because you’re increasing the value of the survivor benefit, this “file and suspend” maneuver supercharges the survivor benefit for your wife if you die first.
Get informed about wealth building, sign up for The Investment Scientist newsletter
The Investment Scientist 