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Top Themes in Financial Services

By Posted on In Economy, Finding Confidence, Investment Strategies, Uncategorized

A recent article outlined investment themes to look for over the next decade and listed some growing trends in financial planning. It’s reassuring to see these trends. We’ve been working hard to innovate within this industry and find ways to help our clients.  These trends are very similar to what we’ve been working on for the past two years:

Retirement Planning: We’ve focused our efforts on building Retirement Income Distribution Strategies that take into account all pots of money (savings & investments) and all sources of income (pensions, Social Security and annuities).  Our planning factors in the slow, ever-present, erosion of purchasing power that occurs each and every year –inflation.  In 20 years, the cost of living may double! Many clients don’t think about that when they retire, unless we illustrate it for them.

Low Cost Asset Management:  Many firms have very high minimum fees, where the firm will only accept new clients with at least $500,000 or more in investable assets.  Due to technology and automation these minimums are decreasing.  We’ve always kept our minimums lower than average and are happy to see the trend finally start to shift in this direction.  Ultimately, it will allow more investors to get more help than if they were to do it on their own. We often waive our minimums for referrals from existing clients.

RIA Advisory Services: The old model of charging upfront commissions on investments is disappearing.  Client don’t like paying high sales charges and we don’t like being in the position of having to “sell” a fund.  The alternative is to pay a small fee for advice and management on an ongoing basis.  It opens up the investor to a much wider pool of investments without having to incur new sales charges, and it allows for greater flexibility.

In the end, these trends are great for the investor: More affordable investment advice, better planning tools, and less in the way of expenses are all going to benefit the investor.

If you’re interested in learning more about any of these themes and how they apply to you, please contact us.

The Mississippi Bubble: One of the First Bubbles

By Posted on In Finding Confidence, Investment Behavior, Investment Strategies, Politics & the Economy, Uncategorized

There’s a lot of talk about if the US market is in a bubble these days. It’s next to impossible to determine if we are, in fact, in a bubble. But the media will do just about anything to produce a story that will get more people to read their publications.

Instead of reading their predictions, consider watching this video about one of the first economic bubbles ever recorded.

John Law and the Mississippi Bubble by Richard Condie, National Film Board of Canada

John Law and the Mississippi Bubble

What Investors Have In Common With Dinos in Jurassic Park

By Posted on In Economy, Finding Confidence, Uncategorized

There’s a great scene in Jurassic Park where Alan, Tim and Lex watch a stampede of dinosaurs suddenly change direction and head right toward them.  What made them change direction?  What made them decide that this new direction was any better?

Turns out investors do the same thing, just with their investments.  As they sense other investors moving into the market, they follow. As investors move from bonds to stocks, others follow. There is a perception that there is safety in numbers. Both dinosaurs and investors tend to act as “herds”.

Problem is that it’s a misperception. Following the herd can cost investors in the end.

Remember to stick to your investment strategy and don’t follow the heard… they could be headed for a cliff and not even know it.

It’s The Issues That Seem to Come Out of Nowhere That May Hurt Us The Most.

By Posted on In Economy, Finding Confidence, Rule of Thumb, Uncategorized

Stock market crashes and big economic recessions can be caused by a variety of factors. The real concern are the factors that seem to come out of nowhere; the ones that catch everyone, even the experts, off guard.

Take all this talk by the media predicting an economic downturn with a grain of salt. It’s next to impossible to predict events such as the Great Depression or the Great Recession of 2008-2009.  Up until 2008, had you ever heard of a Mortgage Backed Security?

Bottom line: Your portfolio should be ready for anything at any point in time.

With Markets at All Time Highs, You Still Need to Be Prepared.

By Posted on In Economy, Finding Confidence, Uncategorized

With the equity markets reaching all-time highs, you would think everyone on Wall Street would be dancing in the streets. Nope!  They’re using this time to talk about all the reasons why we’re in for a big correction, down turn, or crash.

This shouldn’t be a surprise. It’s never clear sailing when it comes to investing. There will always be issues that make investors nervous. And the markets will always experience recessions.

But investors might forget that the markets do this funny thing when everyone is expecting the market to rise (or fall)… it might just do the exact opposite of what we expect.  Despite all of the expert opinions and the number crunching, there will always be the human equation to factor in and that’s hard to capture. Perhaps all this fuss is just noise and the markets will continue to climb.

Bottom line: Your portfolio should be ready for anything at any point in time.

Rising Interest Rates Can Help Your Portfolio

By Posted on In Economy, Finding Confidence, Uncategorized

Much of the attention over the last few months on the effects of interest rates and bond tapering on your portfolio focus on the immediate consequences – a decline in bond values.  But rising interest rates can be good for your portfolio over a longer time period due in part to reinvesting interest income.  Not to mention, it is a strong signal that the US economy can come off of life support.  See the chart for details.

So why did investors leave bonds during this summer? Could it be that investors are afraid another recession is around the corner and don’t have confidence in the markets?  Perhaps they are looking for a reason to sit in cash willing to wait for more clarity to come from the Fed.

That could be a costly mistake… just ask those who are sitting in cash since the Great Recession.

What a missed opportunity.