photos courtesy of Gary Morrison

October is Retirement Readiness Month

by Steve on October 6, 2015

The third week of October is officially National Save for Retirement Week so we un-officially expand this month to Retirement Readiness month. Thus, to start out the month, here are some not so fun facts about workers’ readiness to retire. Did you know that among working Americans:

  • 2/3 report they have saved for retirement, but 57% have saved less than $25,000; in fact, 28% have saved less than $1,000 for retirement.
  • Less than half have tried to figure out how much money they need to save for retirement.
  • No wonder that 2/3 plan to work for pay in retirement and 63% believe Social Security will be a major source of income in retirement.
  • Finally, more than half expect to be able to manage in retirement with no more than 70% of their pre-retirement income.

We’ll have more information on retirement in the coming weeks. In the meantime, rate yourself in these these four areas.

Are You More Like the Ant or the Grasshopper

by Steve on September 29, 2015

In Aesop’s fable of the ant and the grasshopper, the grasshopper spends the summer enjoying the sun and being idle. The ant spends the summer getting ready for winter by storing food. We seem to have some of this story taking place in U.S. right now.

The Conference Board’s  Consumer Confidence Index reached its second highest reading of the year in September. On the other hand, the University of Michigan Consumer Sentiment Index fell to its lowest point since October 2014. So what’s going on?

I think these two surveys show exactly the sentiment among Americans.  Many of our clients are fearful of a sharp stock market drop and have seen their portfolios lose money over the last year. No matter that most clients are far better off today than they were a couple of years ago. They have jobs, their investments have grown over the last 9 years, and their home has increased in value significantly in the last few years. But they are still worried about the future. Why is that? I’m not sure other than to say that what we have experienced most recently tends to overly influence our state of mind. Behavioral experts call this the “recency” effect.

On the other hand, many Americans do not worry about retirement, have saved little for retirement, spend as much as they make (or more!) and pile up credit card debt. These folks don’t hire a financial adviser because they don’t want to know the state of their finances. They prefer the “ignorance is bliss” approach.

This bi-polar approach to personal finance is one possible explanation of why one consumer sentiment index is registering a high mark and the other index is showing low numbers. Some people are like the grasshopper in the fable of the grasshopper and the ant; not worrying because the sun is shining today and they are ignoring the upcoming winter. Others know the winter will come and want to be prepared, like the ant in the story. Are you more like the ant or the grasshopper?

Are You A Long-Term Investor?

September 22, 2015

Most people would say “Yes” to this question, but are you really a long-term investor or just when it’s convenient? Here’s what I mean. Right now, commodities and natural resources are asset classes that have lost a quite a bit in the last year (-42% for commodities and -34% for natural resources), yet we continue […]

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Fall Is Time to Take Stock

September 15, 2015

Summer is past and the kids are back in school. That makes the Fall a good time to review your personal financial plans and make some decisions about what’s next for you, your family and your money. Here is what we suggest to our clients now: Check your money mindset. Are you positive and feeling […]

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Portfolio Ups and Down

September 1, 2015

If you want less volatility in your investment portfolio, check your accounts less often. — Anonymous

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Now What?

August 25, 2015

We’re getting this question from clients and other people often these days. They’re referring to the investment markets that have taken a sharp swoon recently. The short answer we always give is, “I don’t know and neither does anyone else.” This is the nature of investing: the future is un-knowable. Any attempt to predict future […]

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Yale Beats Harvard

August 18, 2015

No, I’m not talking about the latest installment of the 100-year old football rivalry between these two universities; I’m talking about which investment approach used by their endowments performed better over the last year. Yale’s approach, applied by the renowned David Swensen, returned 3.6% according to Motif Investing. This is the best return among the […]

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What is Money?

July 28, 2015

Have you ever thought about this question? The dictionary definition of “money” would be something like this: money: (muhn ee), noun: a circulating medium of exchange. But what is money really? Wars have been fought over it, lives have been ruined over it, industries have been started and failed over it. So what is money? […]

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How To Live a Life Without Regret

July 21, 2015

This is not a typical “money matters” blog post; rather, this blog title was suggested by an article I saw about living a life without regret. Bronnie Ware is a palliative care nurse and recorded the thoughts of her dying patients. From their thoughts she wrote a book titled, “The Top Five Regrets of the […]

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Why Can’t Investing Be Simple?

July 16, 2015

I had a client ask me that recently. After all, he reasoned, there are multiple features on his cell phone and the manufacturers have made all cell phones easy to use with just a few buttons and menus. I’m not sure I agree with him about the cell phone, but I get his point. So […]

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