November 2012: Top 10 Money Excuses
Everyone talks of changing the world. Few talk of changing themselves. ~Leo Tolstoi Fortunately the U.S. Presidential election only happens once every four years. Rather than focus on this once every four years event, we thought we’d draw attention to some costly attitudes that are in effect every day. Jim Parker, an Australian based vice president with Dimensional Funds Advisors makes the observation of investor behavior in Australia that we recognize as universal. He writes: Human beings have an astounding facility for self-deception when it comes to our own money. We tend to...
Read MoreOctober 2012: Does Financial Advice pay for itself?
1.8% per year. That is the annual added benefit delivered by financial advisors to their clients according to Chicago based Morningstar, Inc. in a recently released study*. You may recognize the name Morningstar, a firm that is best known for its analysis of mutual funds, stocks and ETFs. In this role they have built longstanding relationships with financial advisors and have developed a deep understanding of our business. Meet Gamma – no, this is not a new character in an X-men movie. This is a new measurement Morningstar has created to describe “the additional expected retirement income...
Read MoreSeptember 2012: Do Track Records Lie?
Every decade or so, it seems there is a new investment theme that is promoted as the greatest, “must have” idea in one’s portfolio. Research will have “shown” that had you invested this way over some prior period, your results would have vastly outpaced a simple patient buy and hold strategy that captures the returns of the capital markets. It’s all about one of two opposing emotions, Fear and Greed, and the new offer will either bestow superior returns or “would have” avoided whatever nasty downturn recently occurred. We have been around long enough to see some trends appear and we now...
Read MoreAugust 2012 Newsletter: Is Long Term Care Insurance Worth It?
What is Long Term Care Insurance? Does it make sense for my situation? What are the alternatives? Long Term Care Insurance reimburses for expenses associated with at‐home or facility treatments for patients who are impaired and can’t perform at least two of the daily activities of living; such as bathing, dressing and eating. We normally recommend that all clients consider the purchase of long‐term care insurance when they reach the age of 50. Like medical coverage, insurers can deny coverage based on pre‐existing conditions so it makes sense to consider it while one is relatively young and...
Read MoreJuly 2012 Newsletter: Are You Worried About Europe and the Impending Fiscal Cliff?
“I increasingly think Europe and the impending fiscal cliff are likely to lead to a new recession and a further decline in the market.” -Comment from an MFA client- Some wonder if a “buy-and-hold” philosophy is appropriate given all the predictions that stocks are going to decline sometime this year due to bloated government debt in Europe [and the US], the fiscal cliff [expiration of the Bush-era income tax cuts] and every other issue that causes economic concern. With the continual repositioning of stocks within the funds we buy on your behalf, as well as our monitoring and rebalancing,...
Read MoreJune 2012 Newsletter: Have we lost faith in the Future? Nobody “believes” in stocks anymore.
We heard the same basic lament at the FPA (Financial Planning Association) NorCal Conference we attended recently that we have been hearing from some clients for a few months now. Investors everywhere, it might seem are suffering from what might be called a loss of hope. We are grateful to Bob Veres, a financial writer we read and respect, for his thoughts in framing this message. A growing number of investors seem to believe that the world is coming apart, and therefore have no enthusiasm in investing in anything that depends on an optimistic view of the future. The specifics vary. It may...
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