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Archives for 2011

Ringing The Old Year Out and Bringing The New Year In—-

12/22/2011 by

As we look at the 2011 year in review, remember that “this too shall pass”. New Year’s Resolutions are about to begin and as we look forward to 2012, make a New Year’s resolution as it relates to your finances. Take the 30 day challenge, look at income needs vs wants and get a “real” budget in place.

Last week, the Wall Street Journal ran interviews with four financial advisors soliciting their outlooks for 2012. Specifically, the Journal asked these sages to forecast which sectors had the most promise and which ones investors should avoid next year.

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ABC…1 2 3 the Rules!

12/16/2011 by

Check out this video of Mark Matson’s appearance on Fox Business last Friday. Mark is the CEO and President of Matson Money, the portfolio management firm we use, as well as my personal coach.

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Bet it all on Black not Red

12/12/2011 by

Last Friday marked the 10 year anniversary of Enron Corporation going bust.

On December 2, 2001, Enron filed for bankruptcy. In the late 1990’s and the very early 2000’s, you could hardly find a growth or a high tech mutual fund that did not list Enron as one of its top 5 holdings. Yes, it was sad when the company tanked, but it was devastating to the thousands of Enron employees who’s 401(k) Retirement Plans were brimming with shares of Enron Stock.

At the time, a little over 60% of Enron employees’ 401(k) accounts held the company stock. About 11% of that was the “company match” portion, but the rest was selected by the employees as a retirement plan holding. And essentially overnight, their plans for a peaceful retirement were shattered.

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Knowing When to Fold’em

12/07/2011 by

An “irrational quest for safety drove all kinds of nutty economic and investment behavior in 2011.” So said the Chairman and Chief Investment Officer of the brokerage firm, T. Rowe Price, a couple of weeks ago at a media conference in New York, as reported by Advisor One, an on-line investment newsletter for financial professionals.

He went on to say that “irrational thinking explains … why people are terrified of risk and volatility.” I can understand the frustration. When the markets take a downturn, many advisors and their investor clients sell their investments and park their money in cash. In other words, they sell when the market is low, and want to wait until prices rise before they get back in.

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The Gift That Keeps on Giving

11/23/2011 by

The holiday season is upon us, which means gift shopping, visiting family members and planning for end of the year events. It’s easy to get caught up in the holiday mayhem year after year, and before you know it too many years could pass while you put off planning for your financial future.

We live in a fast-paced, high-energy society that is constantly on the move and always looking for shortcuts. As a result, certain aspects of our lives are often put on hold until a more convenient time when life isn’t so hectic. The fact of the matter is that life is always busy and sometimes we have to force ourselves to pay attention and take care of the important things now, so that we won’t pay the price down the road.

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Get That Monkey off Your Back

11/04/2011 by

“A blindfolded monkey throwing darts at a newspaper could select a portfolio that would do just as well as one carefully selected by experts.” – Burton Maikiel, from A Random Walk Down Wall Street.

This observation from Maikiel prompted the WSJ to run a Dartboard Contest to test this theory. Over a ten year period, starting in 1988 and ending in Oct 1998, there were 100 such contests in which the results of monkeys throwing darts at a stock page were compared with the results of the best and brightest of Wall Street. Slam dunk for the “pros”, right?

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Risk: Just the Facts Ma’am!

10/27/2011 by

How much risk is in your portfolio? Seems like a pretty straight forward question. Well…do you know how much risk you’re taking on or are you just taking a ride on the “Trust Express”

You’d think this is something most investors would be demanding to know. Yes, there is a mathematical formula that measures how much risk is in your portfolio. It’s called standard deviation and it measures how volatile your particular portfolio is. It absolutely blows my mind that there is so little talked about this vital measurement in the investment world. Most people have never even heard about it.

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Rational…Lies! Shell of Truth Stuffed With Emotion

10/14/2011 by

Global broad based diversification. Investors make big mistakes when markets are volatile.

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Innovation Will Prevail

10/07/2011 by

Innovation will prevail you know we lost a very important figure in American culture and in world history yesterday with Steve Jobs passing, someone who has had a tremendous impact on the world. If you were asked to think of an innovator, my guess is Steve Jobs name would come up often. I wonder what he and his company, vendors, and suppliers contribution to innovation have equated to in tax revenue, 49000 people work for Apple which is worth 37 billion. Steve stimulated our economy in part, when an innovation becomes in demand, revenue ensues. I believe that Steve Jobs was an example of compassionate capitalism.

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Trading Treadmill

09/21/2011 by

Trading Treadmill….avoid the hype
I ran across a recent press release this morning from Business Wire that announced some activity for Charles Schwab Corporation in August. I found it interesting that there was a large in-flow of new assets that came into Schwab about $62B and what I really found curious was the amount of trades that were taking place. Trades are up substantially in August about 57% in and 35% in July. Now what reasonable explanation can justify this amount of activity? Why is this happening? FEAR, FEAR, FEAR!

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Trading Treadmill

09/21/2011 by

Trading Treadmill….avoid the hype I ran across a recent press release this morning from Business Wire that announced some activity for Charles Schwab Corporation in August. I found it interesting […]

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Portfolio Construction: Navigating the Fog of Investing

09/18/2011 by

Excerpts from Navigating the Fog of Investing. The world finance is lauded with manufactured perceptions and techniques designed to create transactions. The revenue created from transactions, that is stocks and […]

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“For the Record” interview with Paul Nichols

09/18/2011 by

Jed Donahue host of “For the Record” interviews Paul concerning financial literacy and the lack of education we see in America.

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Everyone Loves Market Volatility ​!!! When it’s up?

09/13/2011 by

A friend and fellow Investor Coach from NJ shared a story of a recent trip.

While in Europe with his wife a earthquake and then hurricane hit the East Coast and they couldn’t get home. All flights from anywhere in Ireland to anywhere in the United States were canceled, So, he bought a newspaper, The Irish Times to be specific, and a cup of coffee, to settle down for a long wait.

While browsing through the paper, an article jumped out at him entitled “Investor ‘prediction addiction’ now most relevant.” He shared that he was pleasantly surprised at the positive portrayal of our Investment Philosophy that he found in the article.

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Gold…Irr​ational Exuberance​!!!

08/24/2011 by

The television or radio nowadays is being bombarded with advertisements to “buy gold.” Firms selling gold now have a huge cash influx and are using it to attract more buying creative marketing. You will hear that it’s the “new gold rush” and get in now because “prices will continue to go to through the roof.”

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