INSIGHTS

February 05, 2015Remember The Lost Decade? It wasn’t that long ago that investing money in an S&P 500 index fund would have yielded a negative rate of return. Specifically, between January 2000 and December 2009 the S&P 500 had a total return of (9.1%), hence The Lost Decade label for that 10-year period.As financial advisors, we don’t think in 10-year increments. We don’t even think in 20-year increments. We think long term, big picture so what happens in any rolling 10-year period doesn’t shake or change our fundamental beliefs.We remind you of The Lost Decade because over the last few years, the S&P 500 has done well. Really well. And when that’s the primary index reported in the U.S. financial media, and you are repeatedly bombarded with its outperformance, it’s hard to ignore. So we’d like to go back to basics and remind you of a few key things:1. Different asset classes are in favor at different times and it’s impossible to predict when a specific asset class ...

November 25, 2014Recently, I overheard a friend of mine having a phone conversation. He said, “I heard Schwab is rolling out their version of a Robo-Advisor….yeah and it’s gonna be free if you have $50 thousand with them.”Once I got over my feelings about the prospect that my career was going to be taken over by robots, I got to thinking. “How will advisors like myself compete with the proliferation of online robo advisors? How can I add enough value for my clients over online services to justify them keeping me around?” Thankfully, noted financial planning author/speaker Michael Kitces has already written a thorough explanation of how financial advisors must change to coexist with “robo advisors." Kitces notes that robo-advisors like Wealthfront, Betterment and FutureAdvisor can effectively replace “commoditized” functions of investment management such as: utilizing low-cost, tax efficient investment vehicles, setting up an “optimal” asset allocation, auto-rebalancing and t...

November 04, 2014The headline jumped from the TV screen, “After Record Highs, the Fall is Here.” Being the good investment advisor that I am, I of course stopped to see what had triggered the latest round of market selling only to learn that it was a weather report! What if this had been a stock market report instead? Just how should we react upon hearing of volatile stock market moves? Think carefully now, because your answer likely will determine not only your portfolio returns but your very ability to enjoy your retirement years.European banks underwent a Stress Test in October to determine the soundness of their financial system. Perhaps we as investors could look upon the Stock Market Pullback of September as a Stress Test of sorts to assess the soundness of our own personal financial system. After crossing 2,000 for the first time in history, the S&P500 Index reached a closing high of 2,011.36 on September 18, 2014. Less than one month later, we had dropped almost 7.50% to ...

October 06, 2014As financial advisors it is our goal that all of our clients have the most successful investing experience possible, but for many investors, their experience has been more confusing and overwhelming than anything else. More information is available now than ever before, yet that has only served to make the investment process even more complicated. We wanted to take this opportunity to remind you of the different types of investment management approaches and which philosophy guides our investment decisions, so that you can feel as confident in this process as we do. CONVENTIONAL MANAGEMENT: Conventional management can also be called “active management” and you have heard us discuss this philosophy and its shortcomings on multiple occasions. Conventional management believes that it is possible to time the market, identify winning stocks, and predict the future. Conventional managers promise investors that they have superior research and insight that will enable them to ...

September 09, 2014My first year playing fantasy football, I started the season 0-8. I seemed to consistently make the wrong line-up choices, I was always leaving points on the bench, and even when I had the best team possible, something unpredictable would happen (like Baltimore’s defense scoring 28 fantasy points), once again leaving me winless. The frustration was maddening. Last year I was champion of our fantasy football league.So what changed over 3 years? I started to treat fantasy football like my job. Literally. As a financial advisor one of my responsibilities is to strip emotion out of the equation – and let me tell you, it’s not easy because human beings tend to fall prey to a number of behavioral biases and pitfalls that keep them from having a successful investment experience. I realized that if I wanted to be successful at fantasy football, I needed to take the same disciplined approach I take when it comes to investing. Lesson #1: Don’t Draft with Your Heart In 2011 ...

August 21, 2014Even if I was not in the profession, I would have to be living under a rock to be unaware of the fears associated with the looming retirement years for baby boomers. This is a concern across the board. Those who have been fortunate and those who have been less than fortunate have the same worry: "will I have enough???" This begs the question, “What is enough?” As one would surmise, the answer is different for everyone. The starting point begins with reviewing what you have, where you want to be, what are your expectations, and what, if anything, do you want to have left (for heirs, charity, etc.)? With longevity on the rise, the length of retirement is quickly approaching 20 years. Less than half of the adult population has no pension benefit, 35 percent have no money set aside for retirement, and Social Security – well – who can count on that?? Those facts equate to a nervous bunch of future retirees. Conventional retirement planning has long advised clients to hold...

August 04, 2014This past Christmas, my two oldest sons got an 8 foot foam surfboard. Last fall, my wife found an amazing deal at Sam’s Club and bought it for them. I don’t know who was more excited on Christmas morning, them or me. We all have been looking forward to catching some waves on this bright yellow 8 foot surfboard for the past 6 months. In mid-July, we went on a family vacation to Atlantic Beach for a week and were able to use the surfboard. Prior to entering the ocean to attempt to catch some waves, my sons and I talked about the fundamentals of surfing. We practiced the right form. We practiced popping up. We focused on the right footwork. We had a game plan before we entered the water. Finally, we went out in the ocean with the 8 foot surfboard we call “Bright Banana”, and we positioned ourselves to catch waves. Both of my sons were able to ride a number of waves during the week, and they had an absolute blast. They experienced all the emotions – fear, euphoria, conf...

June 26, 2014The San Antonio Spurs just dispensed of LeBron James and the defending champion Miami Heat in five games in the 2014 NBA Finals. They did so in impressive fashion with another lopsided victory en route to their 5th championship.As a financial advisor and avid sports fan, I couldn’t help but reflect on the past decade and a half of excellence by the Spurs and how we can apply their model to investing. I believe that the following five strategies employed by the Spurs should also be remembered when investing.1. Boring can be beautiful.Even the casual NBA fan can tell you they’ve heard this a hundred times. “The Spurs are boring.” Today’s SportsCenter culture loves the “Lob City” LA Clippers with highlight reel dunks and above the rim hijinks. There’s no doubt that’s it’s a lot more exciting to watch a lob being slammed down by the likes of All-Star forward Blake Griffin or DeAndre Jordan than a perfectly executed back door pass.However, basketball purists appreciat...

June 02, 2014As a Chartered Retirement Planning Counselor designee, I spend a lot of time working with clients to carefully chart out the financial side of their retirement. During our meetings I will often mention the need to do the other type of retirement planning also – the personal side – the side that involves deciding how they will spend each and every day when they no longer have to punch the ol’ time clock. I ask them to carefully envision that side of retirement and make plans accordingly. Rather than me try to address that concept, I asked my good friend and wise life coach, Kelly Walsh to pass along some guidance. How to Create Your Retirement Life Preparedness KitBy Kelly Walsh, President of 1 Smart Life, LLCWe spend our lives planning for retirement often with a focus on money. We carefully imagine stepping into the world of receiving paychecks from our investments rather than an employer and wonder how that will feel. But what else can we be preparing? We can Google i...

May 22, 2014On May 13th, 2014 the S&P 500 grazed the 1,900 mark for the first time ever. In the past two years we have seen this index cross new thresholds repeatedly, reaching 1,600, 1,700 and 1,800 in the last year alone. With each new high investors are asking the question, “How long can this continue?” Many are bracing themselves for the inevitable pullbacks that are inherent in capital markets, pullbacks which unnerve us but are often healthy after experiencing extended periods of market growth. I am a planner by nature. I often try to assume the worst case scenario that could occur in a particular situation and make plans for what I would do should that scenario arise. Not to mention driving me crazy, this planning has added about five pounds to my purse, since who knows when you might need an extra pair of shoes, pepper spray, a sewing kit, band aids, or batteries? Investors are the same way. They try to predict the future by anticipating all possible financial or economic...