She’s an intelligent woman, seemingly well to do and living in a high rise condo in Florida. Retired, active lifestyle, involved in many activities with her friends, giving of herself to her community, church, and local charities. She did everything right, at least right for her generation, place and time in her life.
She was the loving wife of an auto company executive. She kept a beautiful home, entertained lavishly, and hosted parties for her husband and his business colleagues. She was always there for the children, active in the community, in short, she lived the American dream.
But below the surface was fear, uncertainty, and pain. What’s happening here, how did it happen, and can she save herself? Read the rest of this entry »
Just diversify across asset classes and you’ll be protected from all potential harm. Or so the story goes from Wall Street, and the many Wall Street minions across the brokerage world.
Just buy a smattering of stocks and/or mutual funds, hold for the long term, and all will be right with the world, and your financial security.
Everywhere I turn it seems the same old story continues. Diversification, Buy and Hold, Modern Portfolio Theory, the beat goes on and on. Read the rest of this entry »
People often ask me what I do and of course I explain. Another question, though rarely asked, is why I do what I do?
The answer to that question was driven home recently by a call I received from an elderly retiree. Her husband had died some years earlier, so in many ways she was on her own. Her knowledge of financial matters was limited and she had no relationships with anyone who could provide professional guidance. No one to turn to for answers to the many questions she had, or the many questions she did not know to ask. Read the rest of this entry »
I recently returned from a business meeting in the heartland, Topeka Kansas. I went there expecting the usual, some creative financial planning and investment ideas, as well as the current thinking of people in the business of giving investment advice.
Was I ever wrong! I came away with a totally different perspective of how to provide the service I do, and a deeper understanding of what is truly important about what I do, what we all do, every day.
You know the great philosophical question of the ages. The one that asks, “why am I here?” Or, put another way, “what is the meaning of life?” Read the rest of this entry »
Are we destined to go down that same road, the road traveled by Japan over the last 20 years.
As you probably know the Japanese stock and real estate bubbles preceded ours by a few years, and they’ve been mired in a no growth/slow growth economy ever since.
Could it happen here? Is it already happening? Certainly questions no one can answer with certainty. The real question is are we ready for such a scenario? What steps can we take to handle and even prosper from such an outcome? Read the rest of this entry »
She was a hard working single woman, owned her own business, and seemed headed toward a comfortable retirement just a few years away. Unfortunately she became blinded by the bright lights of the ‘New Economy’ and technology boom. What she didn’t know is those bright lights shielded the horrors of a looming disaster, and she would not be able to extricate herself until it was too late.
I met Jeri at a class I was conducting on retirement planning at the local community college. She asked for a no obligation meeting and so at a later date we sat down to explore her needs and objectives. Read the rest of this entry »
8/30/09
Yes, the bull is back! I believe we are in the early stages of a new bull market. Even with all the bad news still on the table, this bull is showing some sturdy legs.
Supporting my view is the chart at the right. It’s a picture of the S&P 500 over the trailing 10 year period. The choppy green line is the price line of the S&P 500, the solid orange line is the 10 month moving average. (I’ve simply converted the 200 day moving average to 10 months for clarity.)
Note the solid line turning up in late 2003, when the market went from a low of just under 800 to its peak of nearly 1600 in late 2007. Take a look at the same moving average line all the way to the right of the chart. It has finally moved up after a near free fall from late 2007 to it’s current up position. This to me signals a new bull market, and it’s time to buy. Read the rest of this entry »
5/29/09
Even though the stock market has rocketed skyward since the March lows we remain in a ‘Bear’ Market. You may be wondering how I can be so certain. After all, hasn’t the market risen 35% or so since the March lows? The answer is yes it has. But some of the key indicators have not yet turned up enough to signal the resumption of a new ‘Bull’.
One of the important indicators I use to help manage risk is called the 200 day moving average. I’ve analyzed it back to the early 1970′s and it has demonstrated a high degree of reliability in signaling the beginning and end of both Bull and Bear markets. Not infallible, but reliable. Read the rest of this entry »
Many people, professionals and amateurs alike, believe in the old adage, ‘Buy and Hold for the Long Term.’ They believe once your investment program is in place you should not make changes due to market declines, even when those declines are as severe as they’ve been the last 13 months.
Just about all investment markets in the world have cratered 40% or even more over that 13 month period. The Dow Industrials, S&P 500, and NASDAQ stock indices are off 31%, 37%, and 42% respectively from January through late November 2008! I believe these losses, even though temporary, are too great for all but the most aggressive investors to endure. There has to be another way, a way we can reap the returns the markets have to offer without putting ourselves at risk of suffering these unbearable losses. Read the rest of this entry »
9/02/08
Has your portfolio been savaged by this new edition of a ‘Bear Market’? Are you feeling there’s no end in sight and have no hope of recovering what has been lost? Well, there are solutions and I hope to offer a few here.
Make no mistake, we are in a longer term ‘Bear Market’ and there is no way of knowing when it will end. Having said that there are a number of strategies you can use to protect yourself, as outlined below. Read the rest of this entry »
7/03/08
If you ask people who the most successful investors are, you’ll probably get responses like Warren Buffett of Berkshire Hathaway, John Neff, formerly of Vanguard’s Windsor Fund, or George Soros, the famous hedge fund manager.
However, some of the most successful investors from a risk/reward perspective are the large university endowment funds. This group includes universities with endowments larger than $1 Billion such as Yale, Harvard and Vanderbilt. (Source: 2007 NACUBO Endowment Study) Read the rest of this entry »
Retirement for women is different than for men, and unless this fact is recognized and acknowledged, a woman’s retirement may become something less than golden. My intent in this article, based on 28 years of experience in the financial services industry, is to discuss what women can, even must do, to assure their years in retirement are some of the best years of their lives.
There are many reasons for women living in poverty during their ‘Golden Years’. Below are some you may recognize, and suggestions and solutions you may wish to consider. Read the rest of this entry »
Margie was a vibrant and active woman, younger in spirit and vitality than her 76 years would seem to indicate. But problems were mounting, life was closing in, and Margie was just about at her wits end.
You see, Margie’s beloved Bill had died some years ago, and his generous pension died with him, as it did not pay a spousal benefit. To compound Margie’s financial problems, due to Bill’s death her social security income was greatly reduced as well. Read the rest of this entry »
The old saying ‘money can’t buy happiness’ is not necessarily true. My contention is that money can absolutely contribute to a higher quality of life, which in turn can contribute to a higher level of happiness. And at no time in our lives is this more important than retirement, because it’s unlikely most of us will be able to increase our income by going back to work in our 70′s or 80′s.
Whether you’re approaching retirement, or have been retired for many years, income is crucial to your financial security, and even to your very health. Many studies have shown insufficient income during our working years, but particularly during retirement, can cause worry and insecurity in our day to day living, which can lead to ill health over time. Read the rest of this entry »
Be on guard, for the annuity salesman cometh, and he/she is poised to take advantage of you, your lack of knowledge, and yes, even your fears.
This breed of salesperson is most often seen at luncheon and dinner seminars, which are marketed heavily to retirees, for retirees have the money. As the infamous bank robber Willie Sutton, when caught robbing banks for the umpteenth time, was asked why he continued to ply his trade, Willie purportedly replied, “…because that’s where the money is.” Read the rest of this entry »
She retired young, 49 to be exact, and made the big move from the dreary rain soaked Northwest to the land of palm trees and eternal sunshine. But all was not well, and the consequences of misguided judgment would soon come home to roost.
Annie had been in banking for 30 years, most of those years at that same stuffy old bank. So when the retirement party came around, well, Annie was ready. She had already picked the area of Florida that would become her new hometown, and was ready to make the cross country trek and settle into her new community. Read the rest of this entry »
Do not rely on the man in your life, or the future man, to provide your financial security.
With the deck stacked against you in so many ways, you must form your own plan. For the litany of challenges you face, look at what the statistics say.
*On average women earn 25% less than men. *Women have smaller pensions and social security benefits. *Women, on average, live 10 to 15 years longer than men. *Almost 1 in 4 women are broke within two months of her husband’s death. *The average age of widowhood is 56. *Over 75% of women are eventually widowed. *87% of the adults living in poverty are women. ***At some point in their lives 90% of women will be in charge of their own finances. Read the rest of this entry »
4/20/07
I write this letter today struggling with sadness, for we have lost a beloved member of our family. Dear, sweet Ruth, my friend, my client, my mentor, recently left us for another place, after 90 years of gracing us with her presence.
I met Ruth in 1983, all 4 feet ten inches and 95 pounds of her. She came to see me because she was retiring from her long career as a bookkeeper for a successful insurance agency in town.
Over the years we visited each other on a regular basis, on occasion even sharing a wonderful dinner or lunch she prepared at her home. Read the rest of this entry »
1) Underestimating the effects of inflation: If you retire on $4,000 month today, in 15 years @ 3% inflation you will need $6,232 month just to stay even with the cost of living. Moral: Do not invest solely in fixed interest investments; build part of your portfolio with inflation hedges, i.e. mutual funds, exchange traded funds, real estate etc.
2) Not properly allocating your investments: Putting all your assets in fixed interest accounts runs the risk of falling behind the cost of living. (See above) Conversely, all your assets in inflation hedges puts your assets at risk of principal loss, at the time of your life you can least afford it. The Watchword here is Balance! Read the rest of this entry »
3/20/07
Yes, it is true, women live too long. The numbers say the average lifespan of women is 79, whereas for men it is 72. Why do I say women live too long? It is due to the very real risk of a reduced standard of living in her later years.
Consider the following facts. On average women still earn less than men. Women have smaller pensions and social security benefits than men. The average age of widowhood is 56. Approximately 75% of women are eventually widowed. 87% of the adults living in poverty are women. (Statistics from WIFE, the Womens Institute for Financial Education) Read the rest of this entry »
3/13/07
Is the next “Bear Market” just around the corner? Was the recent market correction a harbinger of things to come? No one can know the answer to these questions, but there are a number of steps each of us can take to prepare for the next Bear which, sooner or later, is surely on the way.
The preparation should begin now, whether you are a new investor, or have already amassed a sizeable portfolio. The objective is to protect it from the ravages of the bear as it emerges from its four year slumber. Read the rest of this entry »
