May 2012 Newsletter: Brokerizing Financial Advice
Would you believe that in the aftermath of the financial crisis legislation has been proposed that will result in LESS consumer protection in finance? “Brokerizing” Financial Advice Under normal circumstances, we do not burden our clients with the details of the regulatory issues we deal with on a daily basis. Periodically, we send you required notifications such as our privacy policy and updated regulatory forms. Our focus is on communicating about your financial well-being. But recently, legislation has been proposed in Congress that we feel could adversely impact investors in general and...
Read MoreFacebook – Buy, hold or pass?
Soon you might have a chance to buy stock in one of the most impressive growth stories of all time as Facebook is expected to become a publicly traded company on Friday, May 18th. At the range of prices anticipated, founder Mark Zuckerberg becomes the latest uber billionaire. And in a case that should be discussed in business schools for years to come, private equity firm Accel Partners could turn a $12 million investment into a profit of over $7 billion. Who wouldn’t want to get in on this kind of gain? By the way, the seeds of that gain were planted in 2005. Our guess is most...
Read MoreApril 2012 Newsletter: Squeezing Dollars for Income at Tax Time
Imagine you can have one of two dollars. One is taxed at 28%, the other at 15%. One leaves you with 72 cents to spend, the other 85 cents. Which would you choose? When we put it that simply, it seems pretty obvious to choose the lower tax rate and end up with more spending power. Yet this simple fact is widely overlooked by many investors seeking income. And there’s no better time to talk about this than the month in which personal tax returns are due. For those seeking current income from their money, it is common to think of instruments that provide a yield, such as Bonds or Certificates...
Read MoreMarch 2012 Newsletter: Are Bonds Dangerous?
This winter turned out to be milder and dryer than most expected. Similar to the difficulty in predicting weather, should we be concerned about possible surprises on the bond side of your investment portfolios? Some clients have questioned whether now may be a bad time to own bonds. With interest rates at historically low levels and certain European governments seemingly on the edge of default, are bonds no longer an appropriate investment? The short answer is: not the way we invest in bonds. ...
Read MoreFebruary 2012 Newsletter: Overconfidence Bias
Did you predict the outcome of the Superbowl? When you have a strong opinion, how confident are you that you have your facts right? What about the other party in the conversation. Do they feel the same way? Before we introduce the topic of this month’s article, we’d like to ask you to take a one question survey: The question is one asked every year by Terrance Odean of his MBA students at Berkeley’s Haas School of Business. With remarkable consistency, his students generally rank themselves as 80% above average, 20% average and almost no one ranking...
Read MoreJanuary 2012 Newsletter: Tools to help you track
Early January is a time when many people make resolutions for the year. Some of our clients resolve to get a better handle on spending. We have a few suggestions for you to help track income and expenses. Below is a quick summary of three options, one is an online resource and the other two are tools that we created at MFA. A favorite online tool is the free website called Mint.com. It will track checking account income and spending and credit card expenses. You have to be comfortable with logging into your accounts through their secure site and be willing to deal with a few suggestions by...
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