Financial Planning

3 Reasons Why Robo Advisors are Hazardous to Your Wealth

“Robo advisors will manage over $5 trillion in 10-years.” Have you seen headlines like this? According to the reports, robo advisors are so wonderful, they’re going to overtake the world and make it a better place to invest. Imagine, if you can, flowers and cute Bambis everywhere! In reality, robo advisors are not really “advisors” but rather online …

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(Podcast) The Gold Monster Awakens

How difficult of a trading environment has 2016 been? It’s been so bad that BlackRock’s $1.9 billion global credit hedge fund is off to its worst yearly start in almost two decades. According to reports, the fund was hurt by crashing junk bonds (NYSEARCA:HYG) and spiraling crude oil (NYSEARCA:USO) prices. Who saw that coming? And …

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4 Moments When “Stay the Course” is the Wrong Investment Advice

The worst January start for U.S. stocks since 2009 should get your attention. If you’ve been hiding underneath a rock or hibernating in a cave-like dwelling, it’s time to come out. “A little sunlight is the best disinfectant,” as Judge Brandeis might say. Most global stock yardsticks from China (NYSEARCA:ASHS) to Japan (NYSEARCA:EWJ) and even the United …

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If You’re Not Preventing Stock Market Losses, You Better Start Now

What’s more important? Making gains in the stock market or preventing losses? Before answering that question, let’s list a few common fallacies about risk: • The full spectrum of market risk can be accurately defined in a single magic formula or statistic • Long-term investing always guarantees success, so go ahead and take all the …

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DON’T Invest a Single Dime Without this Crucial Document

Imagine hiring a builder to construct you a home. You tell the builder how you want the home to look and you tell them about all your desired features. Instead of showing you a blueprint, the builder starts construction and a short-time later, your house is completed.  But there’s a very big problem: The home’s final design is nothing like what …

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The Cost of Investment Advice is Still Too High

There are 118 million U.S. households and 108 million have under $500,000 of investable assets while 100 million have less than $100,000 to invest. What does it mean? It means the vast majority of the investing public still doesn’t meet the dollar minimums required to work with a licensed financial advisor. And for those who …

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Improving Bogle’s 50/50 Portfolio

Jack Bogle has made changes inside his personal investment portfolio. In a news interview last week, the legendary indexer revealed that his 60% allocation to U.S. stocks and 40% to bonds via index funds (Nasdaq:VBINX) has shifted to a more conservative asset split of 50/50 in each group. Bogle is the 86-year old founder of Vanguard Group, the …

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Does Your Portfolio Have a Margin of Safety?

Building an architecturally sound investment portfolio doesn’t happen by chance. A structurally strong and healthy portfolio is organized into three basic parts: 1) the portfolio’s core, 2) the portfolio’s non-core, and 3) the portfolio’s “margin of safety.” All portfolio parts complement each other by deliberating holding non-overlapping assets. (Audio) $1,000 Gold? + a $1.8 Million Portfolio …

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How to Increase Your Odds of Investment Success

Investing and gambling share at least one common thread; it’s all about odds. And depending on how you build your portfolio of investments, you will either increase or decrease your odds of investment success. (Audio) The Stock Market’s Last 10% Correction + How to Judge Performance Properly The latest data from Morningstar’s Active/Passive Barometer illustrates …

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3 Symptoms of a Poorly Diversified Portfolio

What is diversification? How is it obtained? Why does it matter? In his book Capital Ideas Evolving, the great Peter L. Bernstein put it this way: “The future is always uncertain. Consequently, risk management is fundamental to the whole process. Indeed, risk management is the only part of the process under the control of the investor. …

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Binocular Man Searching

Long-Term Investing: A Cautionary True Life Tale

The financial services industry’s bias toward long-term investing as the magic formula to the problems that face the individual investor is wrong and misleading. For example, illustrating unrealistic long-term time horizons of 100 or 200 years of equity returns (NYSEARCA:VTI) to prove that we should all be long-term investors is a common practice among both academicians and …

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Portfolio Management 3

Portfolio Report Card: A Misaligned $182,000 Retirement Plan

What does the optimal investment portfolio look like? Is it the portfolio with the hottest stocks and ETFs? Is it the portfolio managed by famous money managers? Actually, the optimal portfolio is perfectly compatible with you. Furthermore, optimal portfolios deliberately minimize investment cost and taxes, diversify across a variety of asset classes, and deliver investment …

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Millenials

A Financial Roadmap for Millennials

Being a millennial means you’re young. And while it’s great to have youth, it’s vanity unless you put it to good use. It’s been said that a good plan today is better than a perfect plan tomorrow. This is particularly true when it comes to saving and investing. The sooner you get started, the better. …

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One Trick Pony

Is Your Investment Portfolio a One-Trick Pony?

One-trick investment portfolios are everywhere.  Do you have one? What is a one-trick pony portfolio? It’s the kind of investment mix that is over-weighted or concentrated in one stock, one asset, or just one asset class.  This is a common condition with company founders who have the bulk of their net worth tied up in …

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Married Holding Hands

Can a Marriage of Investing Opposites Produce a Good Outcome?

Most of the almost $20 million in investment portfolios that I’ve analyzed and graded this year have been on individual accounts. But a few, like my latest Portfolio Report Card on a $823,000 portfolio for a couple from Oregon,  are joint accounts. Joint accounts involve multiple people with varying personalities which can be challenging. Ideally, the joint …

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Portfolio Report Card: A $569,742 Retirement Plan with Sluggish Performance

Why do we take unnecessary risk with our investments? Is it because we’re gluttons for punishment or is it because we’re incredibly brave? Often, it’s because we’re simply distracted or unaware. Although the S&P 500 is still hanging on to its year-to-date gain, stock market volatility or “VIX” has advanced more than 30% over the …

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6 Really Bad and Sad Portfolio Types

We live in a Golden Era of misaligned investment portfolios. These are rogue, poorly designed portfolios (401k, IRA, Roth IRA, UGMA, 529 plans, etc.) that are architecturally unsound. And for whatever reason, the people who own them are intent on self-destruction. The Portfolio Report Card method I invented for analyzing and grading portfolios uncovers most …

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