Monday, October 31, 2011

In Case Anyone Was Wondering...

We are in no way, shape, or form involved or have anything to do with MF Global.  Just to clarify that - I did get asked that by one client so I figured I'd make sure everyone knew this.

Saturday, October 29, 2011

Financial Planning Is at the Heart of What We Do

The only real way to determine how to help a client with their financial goals is by finding out EVERYTHING financially about their situation.  Otherwise, it isn't in your client's best interest and you're shortchanging your client and your practice ultimately.  Plan, plan, plan - do it the RIGHT way...

2 Great Websites to Research Your Mutual Funds and - see how your funds stack up right here!

Friday, October 28, 2011

Thinking of Working With an "Advisor"? Ask This Question FIRST...

If you ask this one question at the beginning, you'll know whether you can continue the discussion or end it right there and start looking elsewhere:  "Are you held to the suitability standard or the fiduciary standard when dealing with your clients"?  Want to know what the difference is?  Read further...

Suitability means that the investments your advisor selected had to be "appropriate" given your risk tolerance and capacity, age, goals, and time horizon.  Notice that it was only "suitable" - meaning the investment could have been more expensive than some other similar choices, or it could have generated the "advisor" (I use that term loosely in this context) a higher commission or payout than other investments with a lower payout (and could have been better for you).

Sounds sketchy at best - how do you know if your "advisor" (notice the quotes again) truly has your best intentions in mind?  And can he offer products without any "handcuffs"?  Is he only able to sell certain products - some of which may not be the best investments possible to choose from?  Possible conflicts of interest - without a doubt (you are possibly the "advisor's" meal ticket - how does that make you feel?)!

Now, let's look at the fiduciary standard - "to always act in the best interest of the client, putting the clients' interests above your own."  Hmmm - that means the best possible investment selections and advice are given taking into account your total costs, fees, expenses, risk tolerance and capacity, age, goals, time horizon WITHOUT having to compromise what you can invest in.  By the very definition you should have a near limitless amount of options to pick from to invest in BUT still your advisor will guide you to the BEST possible investments for your specific situation.

Usually these fiduciaries are working for RIA firms, which by definition must always act in the best interests of their clients.  It is the PREFERRED WAY for you to do business with an advisor - typically no commissions for suggesting certain investments.  They are typically paid a percentage of what assets they manage for you, an hourly fee for planning and/or advice, or a combination of both.  This eliminates many of the conflicts of interest that an "advisor" who works for a big brokerage firm cannot escape in their world.  They are usually selling, NOT advising.

So, at the end of the day, do you just want to deal with an "advisor" who may only recommend what's suitable for you or an advisor who acts in your best interests?  Seems pretty simple to me - perhaps many others will soon understand the difference.  I hope you now know & understand the differences between an "advisor" and a TRUE advisor.  That difference can possibly save you a lot (and make you a lot) of money over time.

Tuesday, October 25, 2011

This is NOT good for our economy...

Check out this link:

Not ideal for the U.S. - and spooky too (the Halloween thing is eerie)!

Ideally we should change the tax codes in the U.S. to help bring jobs back to this great this to see what I think would be an excellent solution:

Friday, October 14, 2011

Patience is Key...

I want to let people know that when they invest they need to take a LONG TERM perspective - anything can happen over the short term (even a rotten decade like the one we just experienced recently can seem painful & dissuade investors and potential investors).

We could also have several years like 2010 (a very good year for most investments) which can help to erase the poor performance many have come to almost expect.  Patience is key - trying to time things up is usually impossible, and emotional decisions in regards to investing almost NEVER work out.  Going against the crowd & buying when investments seem at their bleakest & selling when everyone LOVES the markets is usually a recipe for success (many studies have been done on this & Warren Buffett does it very well).

Please let me know your thoughts on this topic!

First Post on The Financial Equation!

Testing out the functionality of Blogger to see how it responds - looking good so far!