Independent Wealth Management
Who scrutinizes your investments, designs and tests your retirement and education plan, searches for new investment ideas, patrols insurance agents and mortgage brokers, shows you strategies designed to reduce your investment costs and income taxes, monitors your 401(k), promptly responds to your email, provides one monthly statement, day-to-day net performance across all of your accounts and does all of your paperwork...We do!
Buy Long Term Care Insurance?
As the U.S. population continues to age, the number of individuals requiring extended care for chronic, debilitating conditions increases. Chances are that you, a relative, or someone else you know will be among them. Nursing home costs now average between $30,000 and $90,000 per year depending on your geographic location. As a result of these high costs, an extended nursing home stay could quickly ravage your income and savings. Medicare typically begins to provide benefits at age 65, but only for some skilled care for a short time period -- not for the ongoing assistance that many elderly people ultimately require.
Because of this widespread need and drastic increase in the cost of nursing home care, long-term care insurance (LTC) has become a popular method for transferring the potential financial burden. If you are middle-aged or younger, buying long-term care insurance may not be high on your list of priorities. However, the worst...
Advice for 401(k) Retirement Plans
Remaining inactive in the stock market is one of the keys to investing. There is an increased probability of error when looking at the stock market when prices are setting new lows or highs. A better idea; find something to take your mind off of the “noise” in the financial markets. Warren Buffett of Berkshire Hathaway plays bridge and his partner Charles Munger works on his mental models to fill the time. Challenge yourself to delay decisions at least one day, as this is an effective tool for investors to make sound decisions. Warren Buffett once said, “It is better to do nothing at all than to do something stupid.”
Magazine Cover Indicator
An old adage on Wall Street is - "sell when Business Week's cover says buy."
The most famous example of this is the 1979 Business Week cover "The Death of Equities." Some facts from the article: Baby boomers won't save. Gold is a safe long term bet. In retrospect, equities were as inexpensive as they were during the Great Depression…and were on the verge of a historic bull market lasting until 1999.
How could Business Week have been so wrong? We would suggest that it is because the publication's staff does a wonderful job of merely reflecting the conventional wisdom. The editors and staff cannot...
Rafael Velez
in Behavioral Finance
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The Enemy of Performance - You!
In our practice, we encounter enthusiastic new investors who devour current editions of Money Magazine, Forbes or the Wall Street Journal in an effort to accelerate their personal learning curve and become more educated about the market. In reality, they may be better off combing through back issues of Psychology Today – because there is considerable evidence that investor behavior is the key determinant to long term results.
