AdviceIQ Articles

  • The War on Investors

    Submitted by Lewis J. Walker on Thu, 04/26/2012 - 9:00am

    Higher taxes and inflation loom. This, you could say, represents a war on the average investor. We can prepare for it, but we first have to understand it. This isn’t about politics. It’s about preparation.
     
    We hear a lot about war these days. There’s the shooting war in Afghanistan, a war on women, a war on religious freedom and war on coal. There’s the ongoing war on poverty, drugs, terror and crime.
     

  • Money Lessons for Kids

    Submitted by Lee Baker on Wed, 04/25/2012 - 3:00pm

    Of all the knowledge you bestow upon your children, an understanding of finance might be the most important. From saving for college to planning for retirement, your children need to be prepared to take on the world.
     
    Helping them get off to the right start can improve their odds for success. Here are some tips in teaching your offspring what makes the world go around.
     

  • Stay-At-Home Mom Costs

    Submitted by Eve Kaplan on Wed, 04/25/2012 - 12:00pm

    How do you decide if it makes sense to leave a job and become a stay-at-home parent? As a financial advisor, I approach this topic strictly from the financial standpoint. I’m not saying it’s better to be a stay-at-home mom, and I'm not saying it's better to use childcare and go to work.
     
    You need to do the cost-savings equation, including many more elements than just a flat comparison of childcare costs versus take-home salary.
     

  • 3 Good Emerging Stocks

    Submitted by Mark J. Foley a... on Wed, 04/25/2012 - 9:00am

    What are the best ways to ride the most promising emerging market nations? Pick individual stocks from China, Brazil and South Africa as an entry point. We have a trio of them.
     
    The first two, Chow Sang Sang and Tiger Brands, are ways of accessing the consumer base as it grows, both in number and affluence. The third, CEMIG, is an infrastructure “necessary business” theme: As their nations’ economies grow, these companies will, too. They are necessary for the economic growth to take place.
     

  • How to Combat Volatility

    Submitted by David Gratke on Tue, 04/24/2012 - 3:00pm

    Volatility wreaks havoc on investors’ psyches—and their portfolios. One answer is to invest in alternative assets, such as managed futures. These don’t correlate with the stock market and are far less volatile.
     
    Investors repeatedly sell at market bottoms caused by too much risk in the portfolios and then buy at market tops. Reducing portfolio volatility reduces portfolio declines and thus hopefully the urge to sell at market bottoms, and hopefully reduces the need to chase performance by buying toward market tops.
     

  • ABCs of Retirement Plans

    Submitted by Lee Baker on Tue, 04/24/2012 - 12:00pm

    As an advisor, I ask my clients to paint a picture of their future. Then I work with them to design a plan that provides the financial freedom to live their dreams. The key lesson: start early, save often.  
     
    Retirement should be a time of great freedom, when a lifetime of hard work finally pays off. For some it is sailing around the world, visiting grandchildren, playing golf or perhaps giving time to your favorite charity. With proper planning and discipline, you can make your dream into a reality.
     
    Let’s look what you need to do at different life stages:

  • Base Hits Beat Home Runs

    Submitted by Tom Orecchio on Tue, 04/24/2012 - 9:00am

    When explaining the impact of volatility and portfolio risk, I often tell clients that that it’s better to aim for singles and doubles rather than swing for home runs.

    Prior to the economic downturn of 2008, clients were eager to take investment risks.  They wanted double-digit returns and appeared relatively unfazed by short-term fluctuations in their portfolio. 

  • Why Retirees Spend 30% Less

    Submitted by Michael Kitces on Mon, 04/23/2012 - 3:00pm

    How much will you spend in retirement? The standard rule of thumb is between 70% and 80% of your pre-retirement spending. But some question this, saying your outlay will be higher. Rest easy: The rule of thumb is right.
     
    As a prospective retiree, you must figure out how much money you need to retire. The more spending you support, the more assets you have to accumulate. Or maybe you will have to work to support your lifestyle in old age.
     

  • Escaping Higher Bond Rates

    Submitted by David Gratke on Mon, 04/23/2012 - 12:00pm

    Bondholders are dreading the inevitable rise in interest rates. When rates rise, bonds generally lose value. But there are alternatives for fixed-income investors that won’t suffer, or at least not as much: real estate investment trusts (REITs) and convertible bonds.
     
    With interest rates at historic multi-decade lows, investors can no longer turn to bonds to reduce risk. After a three-decade decline, rates will rise sooner or later. Now, $9 trillion dollars is in the global economy from central bank “printing” that was not there five years ago.
     

  • Avoiding a Scam

    Submitted by Lee Baker on Mon, 04/23/2012 - 9:00am

    Scams can happen anywhere to anyone. My recent brush with checking fraud can help you avoid becoming a victim.
     
    Things started innocently enough. Initially, my firm received two puzzling phone calls from people who had received checks. They believed we had sent the checks out and had questions. We brushed the calls off as wrong numbers. Perhaps the callers were looking for another company with a similar sounding name, we thought. But the calls kept coming and then we started to get e-mails.
     

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SMART ADVICE

 

A Tragic Mistake: ‘I Don’t Need Help Handling my Money’

 

By Larry Light, Editor-in-Chief

May 1, 2013

 

We all like to think we’re smart and self-sufficient. A lot of folks believe they can manage their financial lives by themselves. These do-it-yourselfers are woefully wrong.

 

AdviceIQ is about giving the world the wisdom of smart, honest (none can have any regulatory infractions) advisors. Are we blindly pro-advisor? No, we are clear-eyed about being pro-good advisor. Everyone, even the financial cognoscenti, should have such a helper to sort out life’s perplexities.

 

Lamentably, the financial crisis and the Bernard Madoff scandal convinced many to steer clear of advisors. According to a Deloitte consulting firm study, 57% of those polled say they’re more comfortable handling their retirement planning on their own. Plus, 38% contend they need no professional advice to plan.

 

Really? A story from Paul Sullivan shows how wrong-headed they are. Sullivan is enormously well-versed in personal finance, which he writes about for the New York Times. But it turns out that even he could use some help with his portfolio. One day he went before Tiger 21, an investment club of very wealthy (with at least $10 million in net worth) types who assessed his financial situation. To Sullivan’s surprise and dismay, the group found major holes: He and his wife didn’t have enough insurance, they carried an unneeded vacation home and spent too much.

 

The blasé DIY attitude vexes Edmond Walters, founder and chief executive of eMoney Advisor, which provides support services to advisors. He watches discount broker TV ads that promise you can direct your investments by yourself, without paying an advisor. “It’s dangerous,” he says. “The ads say you can come home after work and spend a couple of hours trading a month. But the professionals have a lot more information than you.” Result: You get slammed.

 

As the Times’ Sullivan attests, it’s good to have a more knowledgeable someone guiding you, an expert who keeps up with all the arcane changes in the financial arena. Do you know how much disability coverage you need? Are you saving adequately for your kids’ education? How much money are you wasting for no good reason? Will your investments support you through your retirement?

 

Walters spent almost two decades as an advisor before he started his current company. “But,” he says, “even I have an advisor.”

 

 

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