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All Posts By Michael Lecours, CFP

Your Pot Of Cash Has A Hole In It.

By Posted on In Cash, Investment Strategies, Rule of Thumb, Saving, Uncategorized

You, like many Americans, may have a sizeable pot of cash just sitting in a bank account earning next to nothing.

The goal in keeping cash in a bank account is safety.

But what if I were to tell you that you that there was a hole in your pot and you are losing 2-3% each year and not even realizing it? You might think twice about keeping high levels of cash in the account.

In a sense, that’s what is happening. Every year, the cost of goods and services increases by 2-3% but the cash stays the same. This cash in your pot has ability to buy a little bit less than it did the year before and the year before that. This is the conception of inflation.

$50,000 today will buy more than $50,000 5-10 years from now.

One option to get around this harsh reality is to invest excess cash in a balanced diversified portfolio.

Why Waiting For The Right Time To Invest May Cost You In The End

By Posted on In Cash, Economy, Investment Behavior, Rule of Thumb, Uncategorized

At least once a week, a client will give me a reason why they don’t want to invest in the US stock market. They mention the headlines (which are designed to scare investors), and talk about the crisis-du-jour, or reference the looming economic dark clouds growing in the distance.

And so they sit in cash, with its perceived safety, waiting for the dust to settle, the clouds to clear, and the right time to invest.

But will it ever come… will it ever be so clear to the investor as to when they should invest?
Perhaps not.

What Cheap Oil Means For The Shale Boom

By Posted on In Investment Behavior, Investment Strategies, Politics & the Economy, Trend Updates, Uncategorized

Shale oil production is more expensive than traditional oil production – It costs more to get shale oil out of the ground. So when the price for oil drops, like it has, it hurts shale oil production a whole lot more than with other production methods. Bloomberg estimates that the price of oil needs to be over $80 a barrel for US drillers to make any profit. Oil is hovering right around that figure now.

For more reading:

Bloomberg’s Quick Take

Oil at $80 a Barrel Muffles Forecast for US Shale Boom

Large Caps Continue Positive Trend

By Posted on In Trend Updates, Uncategorized

Despite a 6 week long correction, large cap stocks continue to gain new ground. The global slow down, threat of Ebola, protests in Hong Kong, potential Ukraine-Russia conflict, weakening of Europe’s economy and many, many other dark clouds, the US market is finding a way to push forward.

Quartz has a nice piece illustrating the improving US economy

The chart below summarizes some of the key headlines from Reuters over the last few weeks. It helps to put the market in perspective and helps us recall the crisis-du-jour.

sp500

Small Caps Continue to Dance Around the Long Term Trend

By Posted on In Economy, Trend Updates, Uncategorized

With all the discussion of the Fed, the referendum vote in Scotland, the S&P 500 hitting new highs and the IPO for Alibaba, some investors may have lost track of the small caps. They haven’t been so fortunate. Here’s a good article that helps to put this trend into perspective and why it hasn’t seen returns like the S&P 500:

SocGen Warns Small Caps Are Headed For a Big Correction

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How to save over $1 million

By Posted on In Saving, Uncategorized

A young client told me that she wanted to have a million dollars by the time she retired. In her mid-twenties, she has time on her side. By socking away $5,000 every year until she retires, she’ll hit her goal (assuming a 7% annual return). See the blue line.

It would be a much different story if she came to me ten years from now (see the green line).

Bottom line: Start saving early.
Saving

A Wake Up Call: How Not to Deal With an Inheritance.

By Posted on In Retirement, Rule of Thumb, Saving, Uncategorized

The following story offers a great example of what can go wrong when a young, financially inexperienced individual becomes wealthy overnight. This author’s advice at the end is exactly what we recommend to clients in this situation:

  1. Get advice from someone on how to use this new found wealth.
  2. Create a plan. Put it in writing. Understand what these funds will be used for it.
  3. Stick to the plan. Without controlling your budget, you can slowly lose track of the wealth.
  4. Don’t be tempted to rely too much on this wealth. It’s very, very easy and tempting to dip into the inheritance when things get tough. But it’s nearly impossible to rebuild a nest egg has been decimated.

How I Blew a $250,000 Inheritance

You Can’t Predict the Next Black Swan Event

By Posted on In Finding Confidence, Investment Strategies, Rule of Thumb, Uncategorized

What’s wrong with this chart?

Give up? The folks that created the chart are trying to predict the next Black Swan – the next significant event that could derail the economy. The problem is, that by definition, black swan events are unpredictable and exceptionally rare. Much of what’s listed here has been dissected and extensively analyzed. They are serious concerns but may already be baked into the current price of the markets. Just look at how the S&P 500 has responded due to the tensions in Russia and Ukraine

Sometimes the biggest risks are the ones that do not appear on anyone’s Black Swan chart!

The Team

H.L. Rives III, CPA
Cliff Jarvis
Michael Lecours, CFP®
Ronald G. Lecours, CFP®

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